For many people, buying a property seems like a distant dream – however, with the help of 95% LTV mortgages from lenders, home ownership is becoming an exciting reality for more first time buyers.
How does a 95% LTV mortgage work?
Getting a 95% Loan to Value (LTV) mortgage means only having to pay a deposit of 5%, so your mortgage loan will cover the remaining 95% of the property value. This can be a real helping hand, in particular for first time buyers.
For example:
You want to buy a property with a purchase price of £120,000. With a 95% LTV mortgage, you would only need to find a deposit of £6,000:
| You: 5% | Mortgage loan: 95% | Total | |
| Value | £6,000 | £114,000 | £120,000 |
This comparatively low deposit suddenly makes the possibility of buying your first home much more achievable. In addition, it’s also useful to know that the deposit can come from your own savings, a gift from a family member, a personal loan from a bank, or from a combination of all three.
What are 95% LTV mortgages product rates like for first time buyers?
Product rates can sometimes differentiate between first time buyers and other buyers.
Over the last couple of years, we’ve seen 95% LTV mortgages product rates reduce significantly. The average rate as at 28th March 2019 was 3.3%*, although there are many different product terms available. If you’re looking at 95% LTV mortgages, we strongly recommend that you seek advice from a qualified mortgage adviser who is not tied to one bank or building society. You can then be sure that you’re fully aware of all the options available to you and can choose the deal that’s right for you.
We’ll look next at the factors which determine how much you can borrow.
How much can I borrow on a 95% LTV mortgage?
The loan amount you can borrow will depend on a number of factors, including:
- Your income – lenders can usually consider the following income sources: basic salary, overtime, commission, bonuses received, self-employed income and some state benefits.
- Any dependants you have
- The amount of unsecured debt such as credit cards; catalogues; hire purchase for cars, furniture and electronics; and any unsecured loans that you have.
Do I need expert advice?
As the number of lenders offering 95% LTV mortgages increases, and the number of different mortgage products rise, it’s increasingly important that you look for advice from a mortgage adviser. Whether you’re a first time buyer or considering moving on up the property ladder, an adviser will be able to ensure that you get a mortgage product that’s right for you.
Stisi Group – Trusted Mortgage Experts..
At Stisi Group, we are Trusted Mortgage Experts.. Our unique Client Obsession programme means that you are our priority, so we’re with you right through the process, from start to finish. You can take a look at our reviews on VouchedFor and Google to see how we’ve been able to help other first time buyers. We know our business inside and out, and we listen to you to make sure that we give you the advice you need.
Please give us a call to find out more about 95% LTV mortgages and see how much you could borrow. Our advisors will be happy to answer any questions and to go through the whole mortgage process with you.
Call us on 0131 510 1240 or email us at [email protected] – then you’re already one step closer to buying your first home!
* Which?: 95% mortgage rates plummet: is now the time to apply? – Brean Horne
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
