95% LTV Mortgages

95% LTV Mortgages UK

Obtaining a 95% ltv Mortgage offers first time buyers the opportunity to secure a property, with the lowest deposit option available, to get onto the property ladder for the first time. This is because you only need to deposit 5% of the properties purchase price in order to secure your home. But what does that mean ?

Example: If you were looking to buy a property for £200,000, the deposit you would be required to put down, would be £10,000. This is 5% of the overall purchase price. You would need to provide proof of the deposit for the mortgage, meaning providing statements, evidencing where the deposit has come from.

95% Mortgage Rates

Mortgage lenders tend to dip their toes in and out of different schemes and update their products regularly, meaning the deals you see available today, may not be available tomorrow. So our advice is always to secure a rate as quickly as you can, once you have found a property.

95 ltv mortgages for first time buyers

As a first time buyer, you can have specialist access to mortgage products that provide fantastic incentives, such as free valuations, lower rates, cash back and discounted fees. At Mortgage Chain our experts know which current 95% ltv mortgages will be best for first time buyers. Our system and process will be able to tap into over 100 lenders to narrow down the 95% ltv mortgages and establish which deal is best for you.

How do I get a 95% Mortgage ?

To get a 95% mortgage you need to have a good credit score. Any recent defaults, CCJ’s or missed payments will likely result in a declined mortgage. If you are not sure what your credit score is, it might be a good idea to check your credit file, for free. We recommend using checkmyfile credit score for mortgages as they provide three credit files on one report, which is vital to see what is going on with all three reports, as mortgage lenders may use any of these agencies to check your report. If the report differs on any three, you may not see an issue that could cause problems in a mortgage application. Check your credit report free > Click Here

95% mortgage with bad credit

Mortgage Chain have been successful in obtaining mortgages for some first time buyers, where they have had minor bad credit. If you have one missed payment or default under the value of £500, one or two lenders may be able to help. Even better if this is for a telecommunications or utility bill, as some lenders may ignore this. If you have bad credit that is worst than this, a 95% help to buy equity loan mortgage or a 95% shared ownership mortgage could be the answer. See below for more options.

Help to buy 95% mortgage

Obtaining a help to buy equity loan is a great way to tap into mortgage lender rates on the market with just a 5% deposit. This is because the help to buy equity loan will provide either a 20% or 40% equity loan, meaning you have access to lower mortgage rates. There is also many more options available with adverse credit lenders, if you have had CCJ’s, defaults and / or missed payments. Here is our latest YouTube video on the help to buy equity loan 2021.

95% Shared Ownership 

Shared Ownership Mortgages is a great way to get onto the ladder as an alternative option if all other avenues prove to be unsuccessful. Used as a stepping stone by many, shared ownership ownership can be obtained with the lowest of deposit, with just a quarter of the usual 5% deposit required. So how does that work ? If you are buying a 25% share, this means the required 5% deposit (of the 25% share), is much lower than if you were buying a property outright.

Example: Purchasing a property for £200,000 with a 5% deposit, would result in a deposit of £10,000. However purchasing a 25% share (of a property valued at £200,000) via the shared ownership scheme, would result in a deposit of just £2,500, which is 5% of the share you are buying. 95% Mortgages are available for new build houses and new build flats as well as second hand houses and flats. Adverse credit options are also available.

*Update, Jan 2021 – Please note that even during the pandemic, we are still able to obtain mortgages for our first time buyer clients, with just a 5% deposit. This includes government mortgage schemes AND buying second hand properties outright, without the use of a scheme. 95% mortgages have all but disappeared, however, we have a very special product available. Please get in touch for more details, below.

Your journey broken down

This is where you will receive a phone call from myself or one of my experienced team members. We will go through some basic information such as income, credit history and debts. This call will take around 10 minutes and we will see if you are mortgage ready now and if not what you need to do. Assuming you are, we can move onto the second step, Fact Find and Documents.

To provide a proper assessment of your situation and to make sure all the information taken in your Strategy call is reflective of the information you provided, we will send you an email requesting you fill in a Fact Find and provide copies of the following documentation.

  • ID (passport of driving license)
  • Address verification (Within the last 3 months, not a mobile bill)
  • Employed: Proof of income (3 months payslips of 12 weekly payslips, Last 2 years P60’s)
  • Sole Trader: Proof of income (Latest 2 years Tax Calculations with accompanying Tax Year Overviews)
  • Limited Company: Proof of income (2 years Company accounts plus latest 2 years Tax Calculations with accompanying Tax Year Overviews)
  • Last 3 months bank statements (Salary credited)
  • Proof of deposit
  • Full credit report (Via CheckMyFile)
  • All existing Life Insurance, Critical Illness Cover, Income Protection and House Insurance policies

We will then book in a follow up call two days later to go through the information you have provided and see if you need any further assistance or more time.

We will discuss our terms and condition and compliance documents.

We will book in a “Follow up” call two days later to see how you are getting on with the documents and answer any quesions and go through the mortgage products and valuation types in the next stage.

To provide a proper assessment of your situation and to make sure all the information taken in your Strategy call is reflective of the information you provided, we will send you an email requesting you fill in a Fact Find and provide copies of the following documentation.

  • ID (passport of driving license)
  • Address verification (Within the last 3 months, not a mobile bill)
  • Employed: Proof of income (3 months payslips of 12 weekly payslips, Last 2 years P60’s)
  • Sole Trader: Proof of income (Latest 2 years Tax Calculations with accompanying Tax Year Overviews)
  • Limited Company: Proof of income (2 years Company accounts plus latest 2 years Tax Calculations with accompanying Tax Year Overviews)
  • Last 3 months bank statements (Salary credited)
  • Proof of deposit
  • Full credit report (Via CheckMyFile)
  • All existing Life Insurance, Critical Illness Cover, Income Protection and House Insurance policies

We will then book in a follow up call two days later to go through the information you have provided and see if you need any further assistance or more time.

We will discuss our terms and condition and compliance documents.

We will book in a “Follow up” call two days later to see how you are getting on with the documents and answer any quesions and go through the mortgage products and valuation types in the next stage.

We will book in a “Follow up” call two days later to see how you are getting on with the documents and answer any quesions and go through the mortgage products and valuation types in the next stage.

Mortgage Products

We will disucss the different mortgage products and repayment methods with you and make a recommendation on which products to consider, based on your circumstances and attitiude towards risk.

Mortgage products:

  • Fixed rate mortgage (A rate that stays the same – low risk attitude)
  • Variable rate mortgages (There are various products under this category; Tracker, discount, flexible, offset and all rates can go up or down. High risk attitude)
  • You can choose to have these products for 2, 3 5 years or sometimes 10+ years

Repayment Methods

  • Repayment Mortgage – Also know as a capital and interest mortgage – This is because your monthly payments will contribute towards the capital of the mortgage and the interest, meaning your balance will reduce and your mortgage will be repaid in full at the end of the mortgage term.
  • Interest Only Mortgage – Your monthly payment only contributes towards the interest and your debt does not reduce. We do not recommend this type of mortgage to first time buyers.

Best Mortgage Products for First Time Buyers

Once you are happy that you can satisfy the documents and information requested, and you are happy to proceed, we would discuss mortgage products and valuations to understand your preferences. The next steps will be to press on with the quotes which will reflect your mortgage requirements. On the basis you are happy with the mortgage quote, we would need your written authoity to proceed to an agreement in principle and confirmation you are aware that a credit score would be conducted. If you have found a property, we would provide you with:

  • Mortgage quote
  • Mortgage protection quote
  • House insurance quote
  • Solicitor quote

If you have not yet found a property we would provide you with a mortgage quote, and the quotes mentioned above would come once a property is found.

Once you have found a property we will request, via email:

  • Full property address
  • Your instructed Solicitors
  • Direct debit details and preferred monthly payment date

 

This is where you would provide us with written authority to obtain the mortgage agreement in principle with the mortgage lender. This would carry out a credit search with the lender, where the lender will “credit score” your application and let us know if we have been successful. If the proper research and preparation has gone into this, which is what our process will provide, a successful outcome should always be the result. We would never carry out credit searches without your authority and would let you know beforehand if it is going to be a “soft search” or a “hard search”.

We would send yourself an agreement in principle certificate and your Estate Agents if applicable. An agreement in principle means the lender is happy to lend the money in principle, on the basis we can provide evidence that reflects the information we have provided. This will also show to the Estate Agents you are serious buyers.

The next step is to submit the full mortgage application to the mortgage lender. This involves providing the lender with all of the details that we have collected from you and the relevant documents, backing up the information already provided.

Once the mortgage application is into the lender, normally within 24 hours we would receive confirmation of the application and your application number. Once that has been received, we would send you a Welcome email confirming the next steps between this point and completion.

Once we have sent you a Welcome email, a Personal Assistant will be allocated to your case, who will also be in touch to introduce themselves to you and will act as a point of contact throughout the application, making sure the lender is progressing your case and providing any assistance with your Solicitor paperwork.

Your Solicitor will also be in touch and will require, usually around £250 – £300 to get the ball rolling and commence your “Searches” as explained in the Solicitor stage.

Once your mortgage is submitted, the goal is to try and get the valuation instructed as soon as possible. This means that the mortgage lender has arranged for a surveyor or valuer to phone the Estate Agents or seller to arrange a date to visit the property and value the property.

Some lenders will do this immediately at application, and others prefer to assess the documents first before the instruct the survey. You will be informed at application stage in regards to how the lender works.

Once the valuation has been completed and is successful, meaning the lender agrees that the property is worth the price you are paying for it and that no problems have been found, the next step is to receive a mortgage offer.

A mortgage offer is the legal documentation which confirms the lender is willing to lend the money to you. This is the main objective from our point of view and is a big step towards a successful transaction. We will check the mortgage offer is correct and will send you confirmation along with a copy of the mortgage offer.

A copy of the mortgage offer will be sent to you, Mortgage Chain and your solicitors. All of the offers vary, so each party needs to have received their version before the next steps can be completed.

Once your Solicitor has received their copy, usually within a week, you should receive an update form your solicitor with confirmation of any outstanding requirements along with an estimate it will take to “exchange contracts” and “complete”.

Once your Solicitor has carried out all of their legal duties on behalf of yourself and the mortgage lender, all parties within the transaction will look to agree a date in where you “exchange contracts”. You would have received a copy of the contract via the post and will be required to sign and send that back to your Solicitor. Your Solicitor will also ask you for your deposit and will provide you an invoice to pay any outstanding fees.

Once all parties have completed this step you will have a date set for “exchange”. Once this date comes, you are legally bound to the terms of the contract and the next step will be to “complete” and receive your keys. There is normally a gap of around 1 week between exchange and completion. This is so the lender can send the money to the solicitor and have everything prepared. Sometimes this can be longer depending on circumstances and other times exchange and completion can happen on the same day.

So this is the exciting part! On the day of completion, you will need to wait to hear from your Solicitor to confirm once all of the monies have changed hands and that you can collect your keys. This is usually in the afternoon, but as a side note this can sometimes go later into the day, so be prepared!

Once you have collected your keys, you will officailly be a home owner and can take your first steps into your heavenly home!

So what are you waiting for ? Let’s do this. Book a Strategy call below. We look forward to connecting you to your heavenly home!

Our latest YouTube video in regards to 95% ltv value mortgages.

0:25 – What is a 5% deposit mortgage

0:38 – Pros and cons

0:58 – Help to buy & shared ownership

1:31 – 95% government mortgage – Ministers are drawing up plans to remove stress tests and provide banks with some type of guarantee so they can lend. Turn generation rent into generation buy.

1:51 – My advice now is to keep saving