Can I Get a Mortgage With a 5% Deposit in Hull?

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Can you get a mortgage with a 5% deposit

Can you get a mortgage with a 5% deposit with bad credit?

Are there any Help to Buy schemes that can help?

- Mortgage Guarantee Scheme

- Shared Ownership Scheme

- Lifetime ISA

Saving for a deposit is regarded as one of the hardest parts of buying a property, especially for first time buyers.

House prices are not the same as they used to be 20+ years ago, they have been rising and rising in recent years. Naturally, rising house prices increase the minimum deposit amount that you need to put down for a mortgage.

So how much deposit do you need to put down for a mortgage?

Can you get a mortgage with a 5% deposit in Hull?

Typically, lenders will require you to put down a minimum of a 5% deposit. A 5% deposit just means 5% of the value of the property. For example, if you are looking at buying a £200,000 property, you would need to provide a £10,000 deposit.

As a mortgage broker in Hull, we will assess your income and affordability to determine whether you can put down a mortgage with a 5% deposit or whether you would need to provide a higher amount.

Can you get a mortgage with a 5% deposit with bad credit in Hull?

Depending on how long you have had bad credit, the chances of you being able to put down a 5% deposit on a mortgage can change.

Most applicants with bad credit will have to put down a higher deposit than just 5% of the property price. Some lender’s will require bad credit applicants to put down a deposit of around 10%-15%.

Are there any schemes that can help me buy a property in Hull?

There are a variety of schemes available, with each being completely different to one another, here are some of the most popular:

Mortgage Guarantee Scheme

In 2021, the government introduced the Mortgage Guarantee Scheme to help first time buyers take out a 95% mortgage (mortgage with a 5% deposit). The end date for this scheme is 30 June 2025.

If you are a first time buyer in Hull and are looking to buy a property, perhaps utilising this scheme could boost your chances of getting a mortgage.

Even if this scheme has ended, it still may be possible to get a mortgage with a 5% deposit, it is all down to your credit and affordability.

Shared Ownership Scheme

The Shared Ownership allows individuals to part-buy and part-rent a property, providing an affordable pathway to homeownership.

This scheme enables aspiring homeowners to purchase a share of the property, typically between 25% and 75%, and pay rent on the remaining portion.

Over time, individuals have the option to increase their share through a process known as “staircasing,” gradually progressing towards full ownership.

Lifetime ISA

The Lifetime ISA is not a scheme as such, but a government-led initiative that helps first time buyers save for their deposit for their first property.

The Lifetime ISA is a tax-free savings account for those aged between 18 and 40 looking to buy their first home.

Savers can contribute up to £4,000 annually, and the government adds a 25% bonus (£1,000 maximum) to assist with property purchases. This incentive provides a valuable boost for individuals saving towards their first home, making the journey to homeownership more affordable.

OwnYourHome

To learn more about these schemes, head over to OwnYourHome.gov.uk to find a complete list.

Alternatively, give our mortgage advisors in Hull a call to discuss your options. In some cases, you may not require the use of a scheme to get a mortgage with a 5% deposit, it may already be financially feasible.

If you are a first time buyer in Hull, book your free mortgage appointment and start your journey online today!

Date Last Edited: 04/08/2024