Despite all of the turmoil occurring in the United Kingdom mortgage industry, there are still a fair number of banks who offer 95 percent mortgages to first time home buyers. By definition, this means that the perspective homeowner is required to bring only five percent of the cost of the house to the table.
Currently, the rules are a bit different in that in addition to the five percent down payment, banks are requiring a twenty percent deposit that is held in the event the homeowner defaults on the loan. The twenty percent monies can come from friends and family members willing to loan that amount of money. It is not actually considered a loan to or from the bank, more like an escrow account to pay the fees and arrears associated with default. Cheltenham & Gloucester is one such bank still offering 95 percent mortgages without the additional twenty percent.
Standard Life Bank and Britannia Building Society also offers 95 percent mortgages as do several other banks in the United Kingdom. These loans typically come at a higher risk to the lenders and so they come with higher interest rates and fees built into the principle amount of the loan. It is best in any situation to shop around to get the best interest rate and take into consideration all fees associated with this type of loan as well as the monthly repayment plan. Currently, there are at least forty banks still offering these mortgage packages and they are still very competitive in the market so there is hope of finding a reasonable interest rate and mortgage payment that will suit everyone involved.
Even though the mortgage industry in the United Kingdom is experiencing a good amount of turmoil, there are still a number of banks offering 95 percent mortgages. These mortgages only require the perspective homeowner to pay five percent of the cost of the loan up front, all other fees are built into the principle amount of the loan and are paid back with the monthly house payments. This type of mortgage is a really good way for first time home buyers and those experiencing negative credit to experience the joys of owning their own homes
