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First time buyer with small deposit

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  • First time buyer with small deposit

    I am 18 yrs old and currently earn 20K per annum.
    I only have a 10% deposit to put down on a 150K house. Would i be able to get a loan to value mortgage of 90% taking into account my age, income and the fact I have only been employed for 3 months.

  • #2
    It's difficult to take but I don't think there's much chance of getting anywhere near the finance - earning multiples alone would mean you're really miles away. Likewise as you suggest 3months job isn't probably going to cut it and sorry to make matters worse but I guess at 18 you've not had chance to build a strong credit histroy? Even if you could get the money I do think 90% LTv is going to be difficult for anyone, given the predictions for the market - valuers are likely to be taking a very conservative view and down valueing, of course it does depend on how cheap you buy your property. Might be a time to rent for now
    Mark Donald
    providing more effective reports.......


    • #3
      As stated, the income multiples will be the biggest problem as you will be borrowing nearly 7 times your income. Assusming you are not in a probationary period, 3 months in your job would reduce your options a little but there are lenders who would ignore this.

      If you have a partner who you could purchase with you may be able to do it, but other than that, the only other option I can see for you is to look into affordable housing. There may be some government schemes out there that you could use to purchase via a shared equity scheme or something similar.


      • #4
        Nationwide might be able to offer something as they are now doing 95% mortgages agin - but it does carry extra payment charges.

        With property prices falling, it may be better for you to hold off a while, save a larger deposit, and then buy at a lower price as well - leaving you with a smaller loan to value ratio.


        • #5
          Another consideration you could make is whether you can get a good property for under £100k.

          That way your deposit would then be 15% or so which would open more mortgage deals and probably some better ones plus you would have a better chance of being approved based on your salary.

          If you havent already then get your credit report and rating and check that is all in order and speak to an independent mortgage advisor (preferably one recommended by a friend that doesnt work for a bank or estate agent). You can get some good mortgage advisors that do not charge a fee but instead take their commission from the lender.
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