Can you buy a house with a small deposit?
Absolutely. Many lenders are now offering low deposit mortgages, where you can borrow 90%-95% of the property’s value. This is part of the mortgage guarantee scheme that’s designed to help first-time buyers obtain a mortgage with only a 5%-9% deposit.How much does a first time buyer need for a mortgage?
You’ll need to save at least 5% of the purchase price, which will be a small but healthy deposit in today’s market. So if the property you’re interested in is £250,000, you’d need to put down £12,500 and take out a 95% mortgage for the remaining £237,500. The mortgage guarantee scheme will run until December 2022, and you’ll need to pass the lender’s usual affordability checks to be eligible.Is it possible to buy a house with no deposit and bad credit?
Getting a zero deposit mortgage, otherwise known as a 100% mortgage, is now very rare. The majority of 100% mortgages disappeared from the market following the financial crisis of 2007-2008, making it really difficult to buy a house without a deposit in the UK. Your best option is to apply for a guarantor mortgage, which is where a family member or friend agrees to meet any repayments you miss. However, it’s worth remembering you’re more likely to get approved for this type of zero deposit mortgage if you have a good credit score. Even with the help of your guarantor, lenders still require evidence such as a regular income and low levels of debt before deciding whether you’ll be able to afford the monthly repayments.How to raise a deposit for a house near Manchester
As expert mortgage brokers that help first-time buyers across the North West, we’ve gathered the best tips on saving for a Manchester house deposit:- Consider moving back home to cut the cost of renting - while it might feel like a step backwards, moving in with your parents for 6 to 12 months should give you the chance to quickly boost your savings for a house deposit.
- Live in a shared house - if heading back to your parents isn’t an option, ask around to see if any of your friends have a spare room going. Or you could always try websites such as SpareRoom or rightmove. You’ll just have to keep an eye on the costs of socialising!
- Open a savings account - decide how much you’d like to set aside a month and open a separate account for your small deposit to avoid the temptation of dipping into your savings.
- Cancel any unused subscriptions - if you prefer to exercise at home now, make sure you’ve remembered to cancel your gym membership. It might also be worth asking your parents or a friend if you can have their Netflix login to help you save even more.
- Reduce your bills - use a comparison website to see if you can get cheaper deals for your broadband, phone, car insurance, or energy bills. And if you live alone or are a student, you can get a 25% discount on your council tax.
