Can I show future savings as proof of deposit?

coolguycp1

Hi,

I am looking to buy a new build flat for which I have 15% deposit at present. The builder does not want any payment until October when the flat will be complete. I have reserved the flat but I need to conclude the missives (contract) within the next two weeks with the builder.

Checked with a few brokers and they have advised no lender is willing to offer a mortgage because of 15% deposit as they require minimum deposit of 20%. All other criteria are met.

Can I tell the broker that I have 20% deposit to secure the loan which I can then accumulate in a couple of months (from my monthly savings) in time for payment to the builder in October?

Will the bank ask for a proof of deposit before deciding on the mortgage application?

beecher2

You'd be lying so definitely not. You'd be mad to sign missives when you don't know for sure you have a mortgage in place - wait until the flat is built and you have a real deposit.

coolguycp1

Thanks beecher2 for your advice.....If I manage to take a loan from one of my friends for the balance 5% amount and show it as a deposit, will this work?

I don't want to lie and cheat when applying for a mortgage.

Also, what is the normal turnaround time for the lender once the application is formally submitted by me? The builder is asking for missives within two weeks.

Yorkie1

I imagine you will have to declare the loan on your mortgage application, which may impact on the affordability test which the lender will apply when deciding whether to offer you a mortgage.

getmore4less

beecher2 wrote: »

You'd be lying so definitely not. You'd be mad to sign missives when you don't know for sure you have a mortgage in place - wait until the flat is built and you have a real deposit.

Even if you get a mortgage now 4-6months is a long time for the lender to change hteir minds or your circumstances to change.

MAKE SURE you have get out clauses in the contract for the builder being late(mortgage offer times out) or the mortgage offer getting withdrawn and probably others.

hcb42

you cant have "future" savings - you could be made redundant tomorrow....(I hope you aren't now I have said that..!)

beecher2

coolguycp1 wrote: »

Thanks beecher2 for your advice.....If I manage to take a loan from one of my friends for the balance 5% amount and show it as a deposit, will this work?

I don't want to lie and cheat when applying for a mortgage.

Also, what is the normal turnaround time for the lender once the application is formally submitted by me? The builder is asking for missives within two weeks.

No, a loan isn't allowed as a deposit.

the builder can ask for missives within two weeks all he wants - wait until it is built and then go ahead. Isn't your solicitor advising you to do this?