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90% ltv mortgages.... ftb? Help!

(32 Posts)
Sorryusernamealreadyexists Sun 11-Oct-20 16:47:27

So spoke with our mortgage advisors just before the weekend and he basically told us (possibly without even looking into it??) that there are no lenders willing to lend us a 90% right now and to basically sit tight and carry on saving. House is worth 210k at last valuation and we have 10% of that saved.

I just checked on two building societies websites directly and both “allow” me to see mortgages with these terms although reasonably high interest rates. These two building sites were ones who would loan to us before covid (hence checking them) and will allow us to print a AIP with both too

So where do we go from here? We are saving 1.5 time’s our rent currently and are able to significantly overpay if needed. We want to buy the house we are renting, landlord would be happy to sell to us.

Where do we go from here? I understand prices may drop but the area we’re in is significantly in demand and most houses end up in bidding wars and go for over the amount, this house is probably the worst on a decent estate. We aren’t planning to move at all for the next 5 years at least and are worried about being priced out of the market if prices continue to rise.

Can anyone help with some constructive suggestions? I understand nobody knows what the market will do with regards to rising or falling but right now I feel as though we’d take negative equity over renting and being priced out forever? confused

OP’s posts: |
YellowishZebra Sun 11-Oct-20 17:20:53

I think either your broker isn't a whole of market broker, so isn't able to access those building societies.
Or your salaries once fixed out goings have been taken into account aren't high enough to get the offers you have seen.
If I was you and I had done a direct AIP that had been accepted I would probably just apply direct, a mortgage broker isn't actually required it is just easier to have one if you are on the borders of meeting eligibility criteria and sometimes they can access better deals.

Sorryusernamealreadyexists Sun 11-Oct-20 17:27:02

Thanks @YellowishZebra we don’t really have any huge fixed outgoings, no childcare bill, £200 on credit card both earning an ok wage. Our last AIP was for 230k before covid, but I understand that things can/will change due to circumstances.

OP’s posts: |
daisyphase Sun 11-Oct-20 17:33:00

I think you should go for it! You are in a good position. Your landlord isn’t marketing the property to anyone else, they couldn’t get rid of you for the next six months anyway, so you have time on your side. Approach a second mortgage broker and also pursue your direct mortgage options. You don’t even really need an AIP, there is no estate agent to impress. See how you get on. If you are borderline, live as cheaply as you can for the next 3 months so that your spending looks even more controlled. (Cancel any non-essential direct debits, etc.) The thought of buying a house with no moving costs is lovely - and very attractive to the landlord too. I hope you make it work. Good luck!

JoJoSM2 Sun 11-Oct-20 17:49:28

I’d just apply for a mortgage and hope for the best. You have nothing to lose. If it doesn’t work out, you can just carry on saving for a bigger deposit.

Madvixen Sun 11-Oct-20 17:58:21

We had a 90% LTV agreed in March but sadly our purchase fell through. We found another house last month but the broker is now only able to secure us an 85% LTV despite us having a larger deposit. Even the same provider from March will only give us 85% and if we want a decent interest rate, we can only get 82%. We've had three different brokers look and they are all finding the same situation.

ChinChilly Sun 11-Oct-20 18:03:35

Go for it, our mortgage broker was hopeless, said he couldn’t get us the mortgage for the house we wanted even though we had an AIP, so we pulled out of the sale, went directly to Halifax only to find out they would of borrowed us more than enough to purchase the original house we wanted.

We had a high interest mortgage as we had a 95% LTV obviously pre covid, it was tight for the first 2 years but once we re did the fix term it came down by around £300 a month.

killerofmen Sun 11-Oct-20 18:09:56

Have you got money on top of the £21k for solicitors fees and survey etc?

If you have and can afford the payments - roughly 1k a month - then go ahead and try buying.

RedToothBrush Sun 11-Oct-20 18:22:17

I saw something about this the other day. I forget where. It might have been a Martin Lewis thing but im not 100%.

The problem is that the number of high LTV mortgages on the market has disappeared to almost non existant and those that do remain tend to be only available to people who currently have an account with that lender.

To put it into context, mortgage lenders have to have a certain amount in reverse for each £1 they lend. This amount is higher for every £1 lent over a higher level of LTV.

Its amount protecting the lender from bad debt. They are assessing the amount they have already lent and are deciding that their exposure to bad debt is considerably higher that at the start of the pandemic so they dont have enough put aside to do as much high LTV lending.

This tells you all you need to know about where they see the market going and how they are planning for a wave of none payment of mortgages or even repossessions.

That probably means that there is a stagnation in the market if not a depression in the market coming as these lenders know how many people are already unable to pay.

I do sympathise because we were in a strange position a couple of years ago where there was a shortage of mortgages lending on 10% deposit available (slightly unusual property). Its deeply frustrating.

Ultimately you are in a good position now and can save so its a question of time rather than being priced out forever.

But my suspicion is you might find that there simply isnt the mortgage you want available right now as theyve all been pulled.

RedToothBrush Sun 11-Oct-20 18:39:49

Incidentally just because you can see a mortgage doesn't mean its available to you as we discovered...

gingerbreadfox Sun 11-Oct-20 18:49:25

We are in the process of moving and our mortgage broker (who is whole of market) told us most banks had removed the 90% loan to value products so I would think what your mortgage adviser has told u is correct. Banks are being very risk averse at the minute

RedToothBrush Sun 11-Oct-20 18:56:03

www.manchestereveningnews.co.uk/news/uk-news/martin-lewis-mortgage-warning-cost-19050002

Our sister site the ECHO reports how Martin has warned that this combined with tightening criteria due to the pandemic means mortgages for those with high loan-to-values - for example, small deposits or little equity - have disappeared.

And

The government's plans have temporarily increased the stamp duty threshold to £500,000 for property sales in England and Northern Ireland until March 31, 2021.

With the introduction of the tax holiday, demand for property has sky rocketed, meaning mortgage lenders have struggled to cope.

Writing in his weekly newsletter, the finance journalist explained how at the start of the pandemic there were 386 mortgages with a 5% deposit but now there's just one standard mortgage at 5%, while any others available have stringent conditions attached, such as parents as guarantors.

There were 751 at 10% but now there are just 57. So for many people, 15% is the new floor for deposits, and even above that, rates are creeping up as the cheapest two year fix was 1.09% in July - with a 40% deposit - but now, it's 1.24%.

gingerbreadfox Sun 11-Oct-20 18:57:58

Also worth noting. Our mortgage broker said things are changing soooo very quickly. Banks are removing/changing products and lending criteria almost on a daily basis.

It was hard for us as we had to get a bigger mortgage while my husband was on furlough and the banks criteria around furlough was changing almost daily.

Perhaps get the advice or another mortgage broker. Remember an AIP does not look into detail, when it comes to the application that is when they really look at the finances.

RedToothBrush Sun 11-Oct-20 18:58:55

My understanding is that those 10% deposits that remain are only lending on a very strict criteria (usually existing customers or those who have proven history paying a mortgage rather than FTB)

Lightscribe Sun 11-Oct-20 21:37:36

The reduction in mortgage products is not because they are struggling to cope.
I said at the beginning of the year on this site that mortgages would start to be withdrawn. 10 year fixed products have also disappeared as well which tells you what the banks think may happen in the future. Pension funds have suspended their property funds (commercial/residential) too.
This is all to de-risk of whats to come. House prices do not go up in recessions and even Boris most recent bluster about supporting the risk from banks for 90-95% mortgages, isn’t changing their mind.
The Bank of England predicted a 16% drop, I expect it will be more than that next year, with millions unemployed and FTBers and those with low equity missing from the chain as they simply will not be eligible for stricter mortgage criteria.

whattodooooooo Sun 11-Oct-20 22:37:21

I noticed the bank who we have our mortgage with has stopped 10% LTV but are honouring those who had already begun the mortgage process. If you find one I'd secure it ASAP as things seem to be changing quite quickly.

Sorryusernamealreadyexists Mon 12-Oct-20 07:24:39

Thank you all, I think we might try another mortgage advisor this week and see what the score is smile

flowers

OP’s posts: |
gingerbreadfox Mon 12-Oct-20 07:53:08

Sorryusernamealreadyexists

Thank you all, I think we might try another mortgage advisor this week and see what the score is smile

flowers


Let us know how it goes.

Don't lose hope yet OP thanks keep getting advice/seeing what's out there.

Heyahun Sun 01-Nov-20 21:43:21

Just wondered how you got on OP??

We got offer accepted on a house a few weeks back - then all the 90% mortgages were pulled so we thought we’d have to bail!

Broker came back to us Friday with a mortgage coming available Monday - it’s 3.79% interest, 5 years fixed terms - we are going to apply

But also over the weekend have started to wonder if it’s a terrible deal and maybe we should just bail on this house and wait

So hard to know if it will get better or worse though 😩

If we wait we are still paying 1300£ rent a month for who knows how much longer while waiting to see if things pick up - then we have to start the house search again etc

JeVoudrais Sun 01-Nov-20 21:48:31

@Heyahun it's so hard to know what to do. We took out a mortgage at 90% LTV in Sept 2015 and got a rate of 3.73%. We are remortgaging on another five year fix with our current lender at 1.64% now we are 75% LTV. Since we locked into that deal a few weeks ago rates have gone up across the board though, and some have pulled 75%LTV products. I gather they have quotas and once so many people sign up to a deal they often pull it, regardless anything else. They are talking about negative rates, but the economy is going to be so shaky for so long I wouldn't know what way to go.

Ukholidaysaregreat Sun 01-Nov-20 21:55:59

I would go to HSBC direct just to check what they would give you. They have great rates but not sure of deposits needed.

Heyahun Sun 01-Nov-20 22:16:39

Thanks for the input @JeVoudrais

It’s hard to know isn’t it! we can afford the repayments no problem £45 more a month than what we pay on our rent at the moment. So it’s totally doable for us

It’s being tied in for the 5 years that’s bugging me a bit - there’s a few to get out of it that’s quite high as well

We plan on staying there at least 5 years though so not like we’d be looking to move before then

We have a baby due in feb too - so we were hoping to have moved before our new arrival joins us.

@Ukholidaysaregreat HSBC have withdrawn their 90% mortgages - so we’d need to come up with another 5% deposit unfortunately

We are in London so the prices are high - that extra 5% is 18k - so it won’t be happening anytime soon that we’d have the bigger deposit

Tomatoandbasil Mon 02-Nov-20 20:47:49

Check this: www.moneysavingexpert.com/mortgages/best-buys/

10% on 210000 home FTB came up with Barclays fixed 5 years at 3.05%
Then look at intermediaries.uk.barclays/home/ to check out their lending criteria etc.

Have you tried London and County as an advisor?

Heyahun Mon 02-Nov-20 21:47:06

Have tried 4 different brokers (London country was one of them)

We need to borrow 343k 😩 literally nothing showing up for me on Martin Lewis - except Buckinghamshire - it’s a family assist mortgage!

I can’t get the Barclays one either as we need to borrow too much Moneys.

A broker back back today and has one for us with accord at 3.68% interest fixed for 5 years - seems the best / all we can get

I’ve spent weeks searching online now and getting nowhere unfortunately

pshek86 Tue 03-Nov-20 18:38:19

Have you tried metro bank we have our application in for 90%

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