Too little deposit to buy a dream home? Here's what you could do....
Have your home buying plans been affected by Covid 19?
Do you have too little deposit to buy? There are still options you might want to explore!
Pre Covid 19 lenders would lend to home buyers who had as little as 5% deposit and there was generally no issue with getting these mortgages. But these things have since changed and now, to have a choice of lenders and a decent interest rate, buyers need 15% or even more as a deposit.
There are rare deals for 10% and nearly no 5% ones so what can buyers do to still be able to get their dream home?
There are Government schemes which might help and, as long as you understand fully the ins and outs, you might still be able to move home.
Shared Ownership scheme, for instance, allows buyers to purchase between 25% and 75% of the house value and pay rent for the rest. The good thing is that deposit needed is calculated based on the share being bought so if someone is buying a 50% of a property worth £200k as an example, they will only need deposit based on £100k (50% of £200k).
This way, the deposit you have saved up may actually be sufficient for you to buy the house.
You would still need to pass the financial assessment and be able to afford both mortgage payment and rent, but at least you would not need to pay for the whole house at once.
You can then buy the rest of house shares in future.
Should you feel you would like to get more information about this scheme, do get in touch and our adviser will explain