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

Amassing a deposit emerges as one of the most daunting challenges for those stepping into the property market, particularly for first time buyers in Essex.

The housing market landscape has undergone significant transformations over the past two decades, with prices consistently on the ascent. Naturally, this upward trend in house prices correlates with a rise in the minimum deposit required to secure a mortgage.

So, what precisely is the required deposit for a mortgage?

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

Typically, lenders specify a minimum deposit of 5%. In practical terms, a 5% deposit equates to 5% of the property’s value. For example, if you are eyeing a property valued at £200,000, your deposit would need to be £10,000.

As mortgage brokers in Essex, our role involves assessing your income and affordability to determine whether a mortgage with a 5% deposit aligns with your financial situation or if a higher deposit may be necessary.

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

The possibility of securing a mortgage with a 5% deposit may be influenced by the duration of your adverse credit history. Individuals with less-than-ideal credit records may discover that some lenders require a higher deposit, typically ranging from 10% to 15% of the property price.

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

In 2013, the government introduced various schemes, aimed at helping individuals in realising their homeownership aspirations by providing financial aid.

Several schemes exist, each with its unique features. Here are some of the most popular:

Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme, initiated in 2021 and set to run until 30 June 2025, empowers first time buyers in Essex to secure a 95% mortgage, necessitating only a 5% deposit.

Exploring this scheme might bolster your prospects of obtaining a mortgage if you are a first time buyer in Essex.

Even after the scheme concludes, securing a mortgage with a 5% deposit remains viable, contingent upon your creditworthiness and affordability.

Shared Ownership Scheme

Shared Ownership in Essex presents a distinctive opportunity for individuals to both purchase and rent a property, offering an affordable path to homeownership.

Under this scheme, aspiring homeowners buy a share of the property, typically ranging from 25% to 75%, and pay rent for the remaining portion.

Over time, individuals can increase their share through “staircasing,” gradually progressing towards full ownership.

Lifetime ISA

While not a conventional scheme, the Lifetime ISA is a government-led initiative aiding first time buyers in saving for their deposit. This tax-free savings account caters to individuals aged 18 to 40, helping them in their quest to purchase their first home.

Contributors can deposit up to £4,000 annually, with the government adding a 25% bonus (maximum £1,000) to facilitate property purchases. This incentive serves as a valuable boost for those saving towards their initial home purchase, making homeownership more financially attainable.

Learn More About Different Mortgage Schemes

To delve deeper into these schemes, visit OwnYourHome.gov.uk for a comprehensive list. Alternatively, reach out to our mortgage advisors in Essex to discuss your options.

In certain cases, a scheme may not be necessary to secure a mortgage with a 5% deposit; it could already be financially viable.

If you are a first time buyer in Essex, kickstart your mortgage journey by booking a free appointment online today!

Date Last Edited: February 20, 2024