chewystickypeanut

As above...

It sounds too good to be true but after struggling to save a decent deposit (and now buying a scoob to cheer me up) this seems a great way to get on the property ladder...

anyone know the pros and cons that the news may be missing out?

SPEN555

I expect u will need a squeeky clean credit history. Plus the interest rate will be higher than say 10, 15, or 20 plus % deposit. So u end up paying big time.

boxst

And it is only on new builds I think?

mervil

iTrader: (5)

Yes, I heard that too

chocolate_o_brian

iTrader: (22)

In the boom back in 2005 when I bought my house, I got a 97% mortgage at 5 times my (then) annual salary. Seemed the norm back then but now... ouch

john banks

Although I bought a house last year and don't regret it (was scared of losing capital or its value being eroded/scammed so it was defensive, least of all evils), I wouldn't dream of buying one with a 95% mortgage.

I had a 90% from 1998 when the rate was about 9% but dropping fast and there was a booming economy with full employment and house prices were good value compared to long term trend. It was twice joint new graduate income (and mine then tripled in 4 years) and that bought a 3 bed det bungalow in a nice area with garden, off street parking etc.

95% now... ouch.

mamoon2

At 95% you will have no equity and possibly fall into negative equity and end up stuck with a bad mortgage deal without the possibility of being able to remortgage.

If you can't afford a least a 10% deposit, you can't afford the house.

Harsh but fact. You need to be realistic

RobsyUK

iTrader: (2)

I have a 95% morgage through skiptons and mines not a new build. I don't know if Skiptons are still doing them but when I got mine (Back in Dec) I posted on here that they were doing them to help others out and felt like all I got was negativity....

having a 95% morgage is not good as if you can't afford the deposit then how can you afford the house - blah blah rubbish. - Someone said!

My £250,000 morgage will be gone in 20yrs so ha and that's with a 5% deposit.

RobsyUK

iTrader: (2)

Oh I'm only 29 too so have some more you know who you are !

RobsyUK

iTrader: (2)

Absolute B0ll0X !!! I purchased a house £250,000 but didn't have £30k deposit laying around.. Who does? We had £17k from the sale of our house and didn't want to put the £13k on credit cards / loan - See how I didn't say get into debt ! We don't have debt as we earn enough money for 2 people under 30 with ONLY GCSE's and have some of these lol

chewystickypeanut

For me the rent i pay is a lot more than the mortgage would be but 15k is a huge amount of cash in anyones books. We both earn good money but the saving is always the hardest part. once that part is over with i would be financially better in the pocket to own rather than rent...its just that first step to be honest. Alot of it is my fault especially seeing the car I drive but i'm 32 this year and the longer i leave it, the harder it will be down the line.

davegtt

Thats the eye, might cost a little more now but its a small price to pay later in life.

Agreed also that its bollox if you cant afford a 10% deposit you cant afford a house, ignore these people. If there is a chance to get on the ladder, if you think you have a solid and safe future in your line of work then just go for it because the longer you leave it the more money you will blow on immaterial objects.

Boro

iTrader: (1)

Not sure what all the fuss is about. 95% mortgages were the norm when I was buying my first house. Infact, a few years after you could get 100% mortgages, all fees paid and cashback!

That's when it all started to go belly up.

mamoon2

You won't be laughing come re-mortgage time when your house has lost some value and is technically un-mortgageable and your stuck with a terrible rate.

I've only got GCSE's and i'm under 30 (27) but i've got 4 houses all on 75% mortgages.

So have some of these

mamoon2

That was when people thought the market would go up.

With values going down and lenders being more careful with valuations you WILL get stuck on a poor rate and have no chance of remortgaging unless you add value to you property or are lucky enough to live in one of the few areas that are rising

mamoon2

Oh and 10% of £250,000 is £25k not £30k

Guess Maths wasn't one of those GCSE's

Spoon

I know a 95% mortgage isn't quite the full thing.

Jamescsti

I bought my house on a 100% mortgage 4 years ago just.as the market was dipping but banks were still giving, bought a house that needed work at a good chunk below the original asking price, we put the money we had saved for a deposit into the renovations and added value into the house.

The house is now worth a good 10k more than I paid for it, Even in a falling market plus with 4 years worth of payments we have a reasonable equity, granted the interest for the first 2 years stung a bit but I have no regrets and a certainly can afford the payments comfortably now. So I can afford the house.

All circumstances are different.

RobsyUK

iTrader: (2)

We have already considered this... We purchased the house £25k under street value as the seller needed to move and we could of had a morgage upto £365,000 but thats stupid. We have looked at all future increases etc. Thanks for the heads up though

RobsyUK

iTrader: (2)

True it's not £30k but £4.5k was solicitor fees and £500 for extras

chocolate_o_brian

iTrader: (22)

I disagree. My mortgage even at his highest interest rate was £483 p/m which for what I have wouldn't rent me the same. It's currently £357ish and again if renting I would not get the same. I have a family so haven't the option of living with mummy until the utopian scenario (say uour golden 10%+ deposit) becomes reality.

hodgy0_2

on one hand people say youngsters can't afford a mortgage deposit, on the other they seem to be spunking 2k and upwards on car insurance every year (and presumably living with their parents, with a £25 month phone contract)

mamoon2

Well that explains things a little better. As long as you got a good discount you will be fine

mamoon2

Holy **** £4.5k solicitors fees?

Mine charges £350 + VAT fixed fee and she is excellent. How have you paid this much?

davegtt

Agreed, £500 should be about max expense on solicitors, I hope she sucked you off for each signature at that price

ScoobLou

iTrader: (21)

My ***** is bigger than yours though.

mamoon2

Ah but Choc, he has a mortgage of £250k, interest rate rises would have a significant effect on payments.

Judging by your payments, i'd say you paid about £60k for your house?

Anyhow, he states he got the property under value so will have equity above the 95% mortgage.

mamoon2

£4k would get you a lot of sucks in the institutions around here.... 200 in fact

Account deleted by request

I thought SN was about logical debate not p1ssing competitions of what we have.

For me what % of mortgage to have depends on the type of property, how much and where it is. For example I would run faster than Usain Bolt away from a 95% mortgage 1 bedroom city centre flat at 55sqm and below without parking and balcony in Brum, Liverpool, Manchester, Leeds, Newcastle.

However I would come more than Ron Jeramy with a 95% mortgage on a 2 bedroom mews with parking in Chelsea as properties in the south east are so driven by foreign money.

Surely the decision depends on more issues than just mortgage rate, its about the long term investment and sustainability of house prices.

Chop

chocolate_o_brian

iTrader: (22)

Nope

Paid £75k for it and mortgage is currently about £83k. I used up done equity in the boom to pay off other stuff so I'm probsbly in negative equity now and doomed as you say

Still a home for my family and mine for as long as I keep up the payments.