Getting your foot on the property ladder is hard, with prices now incredibly high and often rising faster than wages can keep up. So house buyers are tasked with having to save up thousands upon thousands for a deposit. But what is the minimum deposit you need to get a mortgage in 2019?
Are you someone who is thinking about buying their own home? If you are then you are going to need to think about raising funds to buy that house. Not only do you need to organise and secure a mortgage, but in order to do this you also need to think about your deposit too.
Deposits are enough to strike fear into the hearts of many a home buyer. They are not only a key part of buying a home, but they are one of the hardest things to actually save up for. Especially if you are already living away from home, or you have a family to think about.
For those who want to learn more about raising a deposit for their next home, then here is everything that you need to know about minimum deposits for securing a mortgage.
0% deposit mortgages are not really a thing anymore
If you ask advice about deposits from someone who bought a house over a decade ago then they are likely to tell you that there used to be such a thing as a 0% deposit mortgage. This meant that you could secure a mortgage for a property, without a pound of deposit.
Nowadays, these types of mortgages are few and far between and they usually cannot be secured without a guarantor. A guarantor will usually be a grandparent or a parent and they will use the equity in their own property or their savings to act as security to cover the deposit percentage.
These mortgages are always seen as a risk. Not only for the lender, but also for those who are actually acting as the guarantor too.
How is a deposit amount worked out?
So, the next question is likely to be, how is a deposit amount actually worked out? The amount of deposit that you are going to need to raise for your mortgage will depend on the value of the house that you want to buy.
The largest mortgage that you can secure for a property is going to be 95% of the value of that property, which means that you are going to need to raise 5% on your own. Of course, if you want to put forward more of a deposit, then you can. It really does depend on how much of a deposit you can put together.
The average price for a property in the UK is £228,000 which means that the average 5% deposit that needs to be raised is £11,400. When you think of it this way, you can see how it is sometimes hard to find the funds to put down a deposit on a property.
The good news about deposits is that it isn’t impossible to save up. There are things that you can do to try and save the money and get yourself in a situation whereby you are going to be able to secure your dream house and get on the property land, for your future!