It's not often Latin phrases can be used in the property and mortgage world but caveat emptor (buyer beware) adequately sums up how First Time Buyers (FTBs) should approach 5% deposit mortgages.
With property price increases generally slowing, and in some areas going into stagnation/reverse, a 95% mortgage needs to be carefully thought through within the excitement of being able to get a foot on the property ladder.
I advise FTBs with small deposits to consult relevant property owing family members who can recall the ups and downs of the market. Often they can be the donors of the deposit anyway. The acting Conveyancer also has an obligation to highlight potential pitfalls. With Estate Agents generally focusing on the upside, some cool calm thinking should pay dividends in the long run.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Our charges are usually between £395 and £995 depending on the type and amount of borrowing required and individual circumstances.
High LTV mortgages can also be riskier for you, because you own a smaller stake in the property. If prices fall, you may find yourself owing the bank more than the property is worth. As a first-time buyer, you need to weigh the benefits of buying a property with less cash upfront against the potential pitfalls.