If we had received £1 for every time we’ve been asked that question over the last few months, then we’d have amassed a small fortune.
Questions relating to how to apply for a 95% mortgage have certainly increased in volume since the Chancellor announced new measures in the budget. However, the good news is that so too has the availability of competitive 95% mortgage deals.
In fact, just as the world begins to open up after what has been a gruelling year, the mortgage market is following suit. So, let’s start with the basics: what is a 95% mortgage?
A 95% mortgage allows you to borrow up to 95% of the value of the property you’d like to buy. The outstanding 5% would need to come from you in the form of a deposit. For first time buyers struggling to get on the property ladder – and watching with horror as their deposit value effectively erodes as property values continue to increase – 95% mortgages make purchasing a property more accessible.
Given the uncertainty around a global pandemic, 95% mortgages all but disappeared for a while. However, during the recent budget, Rishi Sunak announced a government-backed scheme that gives UK lenders the green light to lend up to 95% of a property’s value on properties worth no more than £600,000.
This means that buyers will now be able to purchase a property worth £600,000 – with a deposit of £30,000.
The mortgage guarantee scheme launched on 1st April and will run until 31st December 2022, providing a window of just under two years for prospective homeowners to make their deposit work as hard for them as possible.
If any of this relates to you and you’re considering applying for a 95% mortgage, then our advice would not only be to take advantage of the scheme while you can, but also find a good mortgage broker and make them work as hard as possible for you, too.
As an award-winning Guildford mortgage broker – and first time buyer mortgage specialist – we not only know what we’re talking about when it comes to getting a first time buyer mortgage, but we also have access to some of the best mortgage deals available right now.
Get in touch to find out how you can leverage the mortgage guarantee scheme and turn your deposit into bricks and mortar by calling us on 01483 238280 or by emailing email@example.com.