95% Mortgages in Nottingham
Can you still get a 95% mortgage?
Whilst mortgages have changed considerably in the last few years, we outline how you can still get a mortgage with a low deposit.
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A number of years ago 100% mortgages were widely available, meaning you could buy a property without having a deposit. Whilst there are a few lenders still lending without needing a deposit, they generally come with a requirement to use equity in a family member's property to be able to borrow the full purchase price. If you are buying a property at below its value or under the Right to Buy or Shared Ownership scheme then there are also deals where no deposit is required.
So what does 95% actually mean? Well this refers to the LTV or loan to value. You will likely be paying 5% deposit and the bank will be lending the money for the further 95% of the property value.
How much deposit do I need?
The good news is that although deals aren't as widely available, you can still get a 95% mortgage with some lenders. In terms of monetary value, if you were looking at purchasing a property for £150,000, you would need a minimum deposit of £7,500.
Can I get a 100% mortgage?
Whilst there is an avenue for a 100% mortgage, you would need to meet the criteria that the lender sets. As an alternative, there is a route to get a 99% mortgage, meaning you could buy with only a 1% deposit (minimum £5000). Other than these, in most instances, a deposit of at least 5% is needed. This deposit does not need to be money saved by yourself, most lenders are happy for the deposit to be gifted by a parent or guardian, with a few lenders accepting it from more distant family members, and a small number being happy whoever the gift is from
What will my monthly payments look like?
The last few years have seen a rise in interest rates from historic lows. This means that your monthly payments are likely to be more than they used to be. Rates are changing almost every day, however be prepared that the higher the LTV, the more you're likely to have to pay every month.
Generally the greater deposit you have, the more options will be available with your mortgage and therefore the lower the interest rate charged.
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95% mortgages aren't widely available, so talk to us to discover your best options.
Ready to get personalised advice? One of our qualified mortgage brokers will be happy to help.
We can identify the right lender for your situation and help you obtain the necessary documents for your application to be processed and offered. Please contact us here or call us on 0115 9499988.
What fees are associated with buying a property?
Valuation fee
When buying a property you want to know that the property is worth what you are paying for it, and if any repairs are needed, you can then make a decision on whether you want to proceed with the purchase and whether you want to reassess your offer to take into account any repairs needed.
Traditionally, lenders have instructed a surveyor to undertake a basic valuation, but this is now often replaced by a desktop valuation where information is gathered online on the likely value of the property. Whilst this may be acceptable to the lender, it does mean that nobody has been into the property to see and assess any particular issues. Both of these scenarios could leave you owning a property, which you may wish you had never bought, for example, structural issues or damp problems would not have been brought to your attention and you will have little chance of recovering any costs from anyone.
With some mortgages this valuation may cost you £200-£300, however in some instances it is provided free of charge. A more in depth survey is a Homebuyer or Level 2 Survey, this will cost from around £450 and will go into far more detail. This type of survey is suitable for most conventional or standard properties. For larger, more unusual properties or those in a state of disrepair there is a Full Structural or Level 3 Survey.
We would always recommend that first time buyers go for more than the basic valuation, it will help identify problems and can aid you in negotiating a lower price for the property.
Lender Arrangement fee
Some mortgages have arrangement fees and others don't. In many instances, these fees can be added to the advance, but it will mean that you are paying interest on a larger debt.
Whether it is worth paying a fee for a mortgage depends on the interest rates, the size of the mortgage and the size of the fee. Your mortgage advisor will be able to compare the deals and calculate which is the most economic route for you.
Broker fee
Your mortgage advisor may charge you a fee to undertake the research, make a recommendation and submit an application. Make sure you know what this figure is before committing to proceed.
Legal fees
You will need a solicitor or conveyancer to deal with the legal work involved in your purchase. If you would like a quote for this then please ask, as we have arrangements with a number of solicitors.
Stamp Duty
This is a tax paid when you purchase a property. Eligible first time buyers won't pay Stamp Duty on residential property purchases up to the value of £425,000. On purchases over this and up to £625,000 the tax is 5% of the amount over£425,000. Over £625,000 then normal Stamp Duty rates apply.
FAQs
How much deposit do I need?
Mortgages are generally available with only a 5% deposit, although increasing this to 10% or more will bring greater choices and generally lower rates of interest.
How much can I borrow?
All lenders have complex affordability calculators which take into account not just your income, but also among other things the number of people living in the property, the cost of any credit commitments and the length of time the mortgage is over.
There are many different calculators, meaning the amount a lender will consider lending will vary from one lender to another. Often these tend to work out around 4.5 to 4.75 times income, although there are some that will consider up to 6 times income.
Can I get a first time buyer mortgage if I have bad credit?
This is far more complicated to answer, but it is still possible that there will be a mortgage available to you. Which lenders will consider lending will depend on what is registered and when it was registered. There are lenders that will ignore adverse information if it is registered a while ago.
This is where the value of an expert mortgage advisor will really come to the fore. We would always recommend, if you have any adverse information registered, that you obtain a copy of your credit report. We've teamed up with Checkmyfile to give you 30 days access to your multi-agency report. Click here to get started.
How much Stamp Duty (SDLT) will I pay?
As long as one of the purchasors has not bought a property previously, then you will be eligible for a lower Stamp Duty Land Tax, this is calculated on the following basis:
- Stamp Duty is exempt up to £425,000
- 5% Stamp Duty payable on the portion between £425,001 and £625,000
- If the purchase price is greater than £625,000, then you will be subject to the standard SDLT rates. The calculation is zero on the first £250,000, the next £650,000 is charged at 5%, 10% on the next £575,000, and 12% on any portion above that.
Can I get a buy to let mortgage as a first time buyer?
There are schemes and lenders that will consider lending to allow someone to buy a property and rent it out even if you are living with family or renting a property.
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