First time mortgage and deposit advice

[ComareTheMortgageMarket]

You could possibly do as Dan S says and obtain a 5% deposit for the property and go on a 95% deal which are roughly 6% at the moment. Then, in 6 months remortgage to a better rate and pay the early repayment penalty of 3% of the mortgage. might work out better that way as to start with you will have a 95% LTV deal then in 6 months you would be picking a deal for approx 3% at 65%/70% LTV.

[dannii]

Are you allowed to put names of banks and mortgage companies on here? My last post seems to be deleted so guessing maybe not?

I'll rephrase my last question! Is it better to go with a well known bank or mortgage company or with the best rate?

I've found one that is 95% LTV and only 3.95% for the first 3 years and then goes up to 4.45% after that which seems pretty good from what I can find? I spoke to them yesterday and they were really lovely, the only thing is its from a company that I have never heard of!
I cant find anything negetive about them on the internet but really my question is, is it a good idea to go with them as they have good rates and we dont need as much deposit or is it best to go with a more well known company and pay a bit more?

In reply to Dan we havent really got much savings, between myself and my boyfriend we have around £2500, plus £1200 that i have down for the rental deposit on the house which obviously we cant get to at the moment, but it does mean we can get a smaller loan for the remainder if we only have to find 5% Thanks though, I hadn't realised you could get 95% mortgages before as my bank had given me the impression that the minimum deposit was always 10%!

Thanks again for all being so helpful, know i'm asking stupid questions but its quite confusing for a first timer!

[ComareTheMortgageMarket]

I quite sure you are allowed to mention lenders names on here. There is no need for you to worry about using a lender that you have not heard of before. Some small societies will have niche lending criteria so may offer good rates although if you want to let me know who this lender is I can have a quick search and see what deal they are properly offering. This could be a 3/4/5 year stepped product which may end up costing you more anyway. Using a broker is quite beneficial for you as they will know the exact deals being offered.

[dannii]

Ok thats cool,

The one i have found is Newbury Building Society, they only lend to people in their area but our postcode is one of the ones listed.

The one that I have been looking at is the First Time Buyer Offset Mortgage at 95%.

Do you think that seems ok? I am employed but my boyfriend is self-employed with 2 years accounts so that limits us a bit as a few of the good rate ones i've found dont take self-employed.

I spoke to a Mortgage broker from tmbl group who said 'Unfortunately lenders do not accept deposits being borrowed. It must come from your own funds, or a gift from family members.'
So am a bit confused!

We have been approved for the for the loan so was going to ring Newbury Building Society back on Monday to get things started if you guys think its deffinatly ok to get the deposit from the loan?

[ComareTheMortgageMarket]

The Newbury deal is fine to go for, either a 3 year or 5 year variable rate. This would also be ideal for your situation as their early repayment penalty is only 1% so if they hiked the rate up you could remortgage to another lender for approx £1k penalty.

As far as the deposit, you would need to check with the policy of Newbury aswel as to whether they would find it acceptable. If not, a gifted deposit from a family member would be fine.

[Dan S]

I can't necessarily 'vouch' for Newbury Building Society in terms of customer service or anything (although it sounds like you've had a good experience with them so far), but they're certainly a legitimate lender.

I've heard of them many times. The good thing about getting a broker is they'll show you deals with companies you'll most likely never heard of...interestingly many of the better deals are indeed with building societies.

It's very liberating to find good deals without the big brands!

Good luck with it all. It's all very exciting stuff.

[ComareTheMortgageMarket]

I've never used Newbury before but a number of small lenders are putting forward good priced products aimed at new borrowers and also higher loan to values. Good luck with it.

[Dan S]

Using a broker will certainly help. Try using a few free ones to get a feel for the market. Best of luck!

[ComareTheMortgageMarket]

Well, without touting for business too much Im a fees free adviser although i think these have sorted themselves out with that deal, which incidentally looks about the best for the situation.