Putting in an offer before reaching 25% deposit?

Wanno

Hi there.

Quick query from a FTB here. I have spotted a property that I would like to buy. In order to get the 25% deposit needed (self employed etc) I have needed to save up £41k. I'm very nearly there. I am just wondering whether I can actually start the ball rolling without actually having the full 25% saved up? Im not talking a lot of money left to save, about three to five weeks worth of invoices. Seeing as the process takes a while, would it be unthinkable to get things started now? I don't want the house to go elsewhere and I might even be able to knock more off.

Solictors fees and all others fees, I am not too concerned with as I have help for those. Broker has found an mortgage that is suitable and so all I want to know is whether I can put in an offer with some of my deposit still left to save?

gemstars

I'd say go for it. I my experience you're first offer is never accepted, so you wait say a week before increasing your offer. If that's accepted then it'll take at least a couple of weeks for your formal mortgage application to go through, then say another week before the survey's done and by that point you'll have everything saved.

You don't need to pay your deposit until you exchange.

If you want to cover everything apply for an interest free balance transfer card. That's what I did just in case I didn't have the full deposit saved up and needed to borrow another thousand or so for a few weeks. It turned out I didn't need it in the end.

Gimlet

I echo what gemstars said. You can just hold off exchanging contracts until you've got the rest. If it is only 5 weeks you will probably still have a couple of bits and pieces to do before you are ready to exchange anyway.

Go for it.

Wanno

I thought credit cards were factored in to your mortgage 'credit'? I have two cards with zero balance on both (around £9000 available)- would this make any difference to my amount to put down? I haven't included it in my calculations of available cash to put down.

Gimlet

It's not advisable to contribute to your deposit using credit cards due to the respectively high interest rates.

Generally solicitors will also charge high % fees on payments received on a credit card and often there is a limit to these payments.

Use only in an emergency IMO

poppysarah

3-5 weeks of invoices? You are also putting enough cash aside to pay the tax man?

Why not offer less so your existing deposit is 25%?

Fire_Fox

If this is a leasehold flat you are looking at (guessing as you are FTB in London), it will take ages to get information from the managing agents anyway. Do you have a mortgage in principle? You will need this to be taken seriously.

gemstars

Yes debt on credit cards is taken into account when you apply for a mortgage.

I applied for the card after my mortgage offer was sorted and like I said it wasn't needed anyway, but as Gimlet pointed out, this was only in case of an emergency.