Small Deposit, Is it a Problem?


Gary Oxborough is Practice Principal here at Barlow Irvin Financial Services.  This month, Gary explains that lenders are coming back into the market for borrowers with 10% deposit and what that can mean for you.

The availability of mortgages for applicants with smaller deposits has been a very high-profile subject over the last year. Lenders have pulled away from offering anything with less than a 15% deposit since the restrictions due to COVID-19 came into place. This has mainly been due to their logistical problems, with staff working from home, which has caused a real backlog in processing applications. By removing the higher loan to value mortgages from their offering, this has allowed them to focus on getting the applications they can process through.

The good news is that this has started to ease over the last few weeks and now most of the major lenders are back in the market for borrowers with 10% deposit. This is obviously great news for first time buyers, but not all borrowers looking for higher loan to values are buying their first home. Unfortunately, the rates on these deals are still quite expensive when compared to other deals, but there are signs that this is also improving as lenders get back to more normal working patterns. The lenders have also been very strict on credit scoring on these cases as well. This is still quite an issue for many borrowers, but hopefully over the next few weeks and months this will improve as the number of mortgage deals available continues to increase.

We cannot stress enough that you should be getting some good professional advice if you are looking for a mortgage with a smaller deposit as the criteria and costs vary considerably between lenders. We have had a few cases that were not acceptable to some lenders, but we have had accepted elsewhere. Do not assume because one lender says no that they all will.

Time to Talk?

Even if you have only just started to think about getting on the property ladder, why not get in touch for a chat. Call Gary on 01204 304 814.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

About the author 

The Barlow Irvin Team

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}