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We have highlighted previously how through 2020, first-time buyers have seen mortgage deals evaporate. With a government-backed mortgage scheme unlikely to come to their rescue any time soon, are there currently any signs of a reversal of fortune for high loan-to-value (LTV) products?
At first glance, it is tempting to say yes. If you have a 10% deposit, there certainly seem to be a few more offerings than there were just a few weeks ago.
Not available to everyone
However, according to comparison site, Defaqto, of the 86 mortgages at 90% or more LTV now available to first-time buyers, 25 of them are not available to everyone. They found that “22 mortgages are restricted by postcode, 25 are not available in Wales and 18 are only available through certain broker networks”. You must also factor in other restrictions such Nationwide excluding the self-employed from their 90% LTV offering.
In addition, the cost of high LTV products is on average 12% higher than a year ago. And also expect to pay higher fees.
It is important to remember that lenders are now placing far more importance on applicants’ credit scores. Being on top of your finances has rarely been so important for those seeking a high LTV mortgage. Many people do not realise that this includes seemingly unconnected factors such as ensuring you are on the electoral register.
Certainly, the more you can save, or borrow from family, the better position you will be in. And if you are fortunate enough to have a 20% deposit, not only do the number of products increase dramatically, but there are some increasingly attractive deals available.