Securing a Mortgage With a Low Deposit

In the current financial climate it is harder than ever to secure a mortgage with a low amount of deposit to put down. However, it is not impossible and there are some deals around at the moment if you do not have a substantial deposit.

The best deal that you can presently hope to find is a mortgage with a 10% or perhaps a 5% deposit. The number of mortgages available if you have a low deposit does, however, appear to be increasing with time. These mortgages will be easier to secure if you have a stable income and a good credit history. For some mortgages a minimum level of income will be required, regardless of the amount you want to borrow.

For a mortgage requiring a low deposit, the mortgage interest rates are likely to be higher than an equivalent mortgage with a higher deposit and you will often be expected to pay a higher arrangement fee as well. Unfortunately, the best mortgage deals are usually reserved for people with a larger amount of deposit.  This is because the higher the deposit, the less risk to the lender that they will suffer a financial loss if you default on your mortgage loan.

If you are not comfortable with the interest rates and fees on offer, it might be worth doing some research into the alternatives available. Unless you expect property prices to rise in the meantime, you might find that you would be better off waiting a while before buying a property until you have been able to save up a higher deposit.

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