95% lending
More and more lenders are creeping into the 5% deposit market. The Governments’ Mortgage Guarantee has increased confidence in this high loan to value lending you can expect rates to start from about 3.70%
Most lenders will max out at 4.5 x income for any lending with less than a 25% deposit
You do not have to be a first time buyer to qualify for all of these deals but typically the new purchase has to be your only property (on completion)
Be careful on researching high loan to value deals as you may end up looking at parental guarantor mortgages which are very different
Best rates
There are some astonishingly low rates around at the moment. As usual 40% equity in the property will secure the best deals. Not just for purchases, but if you are coming to an end of your current deal or floating on the Standard Variable Rate you should look at your options.
There are fixed rates as low as 0.99% for 2 years and 1.19% for 5 years.
However, if your loan to value is higher, you can expect to pay artificially high rates. Here are some very general examples-
90% = 3%
85% = 2.4%
80% = 1.90%
75% = 1.30%
So, you should think about what rate will suit your situation. Should you tie into a longer fixed rate for security or a shorter term to allow a quicker review to benefit from a lower loan to value?
Affordability
Yes, lenders are being fussier at underwriting income with more questions are being asked. But, these are strange times. Slowly, slowly, they are loosening up and lenders are offering 5 x or even 5.5 x income. Clearly this is not right for everyone and tends to benefit professionals or high earners.
If you are self-employed there are still more hoops to jump through. You might find affordability is restricted but this should ease off over the coming months
House prices
Still rising. Depending on where you live will affect this differently. Nationwide BS has the annual rise as 7.1%. The end of the Stamp Duty relief 30th June (tapered relief ending on 30th September) might help slow this down
Call Ideal MA to discuss these areas in more detail. We are there to help. 01174 446753
You may have to pay an early repayment charge to your existing lender if you remortgage
Your home may be repossessed if you do not keep up to date with repayments on your mortgage