Advice on going higher with an offer than i have a mortgage for?

smiddy_2

Just after a bit of advice really. I have seen a house i am very interested in but it is a little over my budget, currently i have a £150k mortgage agreed in principle and a £50k deposit but realistically can offer up to around £205k. What could be a reasonable way to go about it? Can i just add an extra £5k onto my deposit without affecting the £150k applied for?

Cannon_Fodder

Offer within budget. They might meet you down there.

You can always go up. You can't go down. And you don't want to be classed as a timewaster (potentially making EAs reluctant to arrange future viewings) by offering what you cannot fulfill.

smiddy_2

Hi, yes i am fully aware of that. The thing is the property is up for £225k and as my circumstances have changed recently i have a bit more available cash.

I was going to start below £200k anyway and work up but if they were to say a minimum of £205k i would be gutted to miss out on it despite being able to afford it.

I would prefer not to be classed as a time-waster by putting in lower offers?!

As the mortgage is agreed in principle i do not really want to go changing things (unless this is viable) so again, £200k mortgage AIP but can realistically afford £205k ish.

Any thoughts?

overandout_2

I don't understand - usually nowadays, mortgage would require that you have deposit as well? Even with a 90% mortgage, you should be able to offer on a house up to 220k? If your mortgage is 200k?

smiddy_2

Lol, sorry ok let me rephrase this.

I have a 50k deposit and a £150k mortgage AIP = £200k
I can afford to add another £5k onto my deposit = £205k

Sorry if this was confusing!

The house is fantastic and i do intend to keep within the £200k if i can but am beginning to wonder if £25k below asking price is going to be accepted. The extra gives me a little more should i need it.

G_M

overandout wrote: »

I don't understand - usually nowadays, mortgage would require that you have deposit as well? Even with a 90% mortgage, you should be able to offer on a house up to 220k? If your mortgage is 200k?

No lender will give you a 100% mortgage so if you are borrowing £200K you will HAVE to pay more than that (prob 10% so 220K)

Voyager2002

Don't forget all the other costs (legal, and so forth).

However, if you are a first-time buyer then you may well be able to get a reduction on the basis that you can just pay by an agreed date without having to sell your property first. So make sure that the vendor knows all about, about the financial resources available to you, and then get the best price possible.

smiddy_2

Would increasing my deposit have any effect on the £150k i have applied to borrow or does this not matter?

Sorry i am totally new to this as a FTBer.

smiddy_2

Voyager2002 wrote: »

Don't forget all the other costs (legal, and so forth).

However, if you are a first-time buyer then you may well be able to get a reduction on the basis that you can just pay by an agreed date without having to sell your property first. So make sure that the vendor knows all about, about the financial resources available to you, and then get the best price possible.

Absolutely, already have fees etc budgeted in other areas (£5k) so this is not important. Very much going to use the 'FTB, no property to sell, mortgage in place, ready to move' card when placing an offer but i am prepared to go to £205k if i can / if possible.

G_M

smiddy wrote: »

Would increasing my deposit have any effect on the £150k i have applied to borrow or does this not matter?

Sorry i am totally new to this as a FTBer.

No. 33% deposit is good but you'll get same mortgage with 23% or 43% deposit.

It's your income and ability to repay that matters at this level.

Should you increase your offer? Impossible to advise. The questions to ask yourself:
Is the property worth more ?
Can I afford more?
Is the property so fantastic that I'm willing to pay more?

overandout_2

smiddy wrote: »

Would increasing my deposit have any effect on the £150k i have applied to borrow or does this not matter?

Sorry i am totally new to this as a FTBer.

Yes it does matter on the maximum amount you can borrow. £50k deposit on at £200k house would be you have a 25% deposit.

By increasing it to £55k deposit and retaining a 25% margin, you can get a house that is worth £220k.

Before I forget, it is also dependant on your salary....dependant on the ratio of the mortgage against your salary. Banks are currently lending around 3 to 4 times your annual salary.

But as G_M says, it is what you can afford to pay in terms of the monthly repayment.....calculate all your expenses and make an informed decision