Increasing Deposit During Mortgage Application

johnfower

Hi Guys

Does anyone know if its possible to increase your deposit once you've started your mortgage application? I.E start application with a 10% deposit and increase to a 15% deposit prior to completion.

Its looking like i may have to offer a lower deposit (10%) than what i wanted (15%), but should be able to increase the deposit before the sale would complete. Not sure if its possible to change a deposit once the application is going through.

Thanks for your help.

John

G_M

Sounds like you are planning to reduce the deposit, not increase it!

End of the day depends on your lender. Talk to them?

Is this an auction you're bidding at? If so you need your mortgage firmly in place before you start bidding. That means valuation done, survey done, legal searches done etc

johnfower

Sorry, yes im planning to reduce the deposit to 10% to get the application going, but whilst the application is going through i may have managed to raise the additional 5% taking my deposit to 15%.

No its not an auction property, normal property purchase (first time buyer)

I just wasnt sure if you were able to change your deposit whilst an application is still going through.

kingstreet

Rather than thinking about it as a change of deposit, try to think of it as a change of mortgage.

Any time during the application process you can change the mortgage amount. Reducing the mortgage is fairly straightforward with a simple call or fax to your lender or broker.

Increasing it can be more problematic. Some lenders re-score an application which needs an increase and this can, of course, result in an accepted application being declined.

I'd suggest you apply for the larger amount at the outset, then reduce it later if you need. Ski downhill as I was always told!

Other thing to consider - choice of lender and deals available may be different between 85% and 90%, so think carefully before you make a decision.

sonastin

An alternative, if your preferred mortgage product allows it, would be to keep the additional 5% in your bank account until the house is yours and then pay it into the mortgage as an overpayment. That way, your repayment amounts (or the length of your mortgage) will come down but the extra might just be available to you for a rainy day - providing the mortgage allows you to withdraw overpayments if necessary.

But the difference between an 85% LTV mortgage product and a 90% LTV product could be significant so it might be worth waiting until you get the extra 5% if you can do so.