Can a low deposit mortgage help you?

Considering their risky nature to lenders, it's no surprise that low deposit mortgages are becoming harder and harder to find. Banks have been stung by the sub-prime mortgage crisis, and are largely unwilling to take such risky loans into their loan books.

That being said, there are still plenty of financial institutions willing to take a punt on a low deposit, or even no deposit mortgage. The main thing to realise though, is that you'll have to make it worth their while.

To secure a low deposit mortgage, you'll have to prove a number of things to the bank to offset the higher risk. You will have to show them you have a good, stable income (it will often have to be higher than for borrowers who pay a deposit). You will have to demonstrate at least some genuine savings. And finally, you'll likely have to pay a higher rate of interest on the loan than your average lender.

Low Deposit mortgages are perfect for first-time buyers, but the big question now is - Where can you get one? If you point your browser in the direction of http://www.moneysupermarket.com/mortgages/ and click on their Low Deposit tab, you'll find a plethora of options.

To give an example, HSBC offer 85% loans at an initial rate of 2.99% for the first two years, rising to 3.9% after that. This is an excellent rate for first time buyers, or those looking to get back in the property market.

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