possibly dodgy question...

bunnyfuller

I am just about to fill out a mortgage application form and have hit a potentially sticky point...

I am applying for about 40% of property value through mortgage, deposit being made up of profits from sale of other house, and a large redundancy payment. I don't actually get made redundant for some time, and have new work lined up already...

what can I put as sources of deposit? obvioously sale of previous property (applying for mortgage with current lender) but the other bit...without making them run a mile...????

benood

Hi - umm - as long as you tell the truth you should be fine - I'd just put profits from house sale and savings - no need to be more detailed.

Doozergirl

That's easy just "savings"

No questions asked!

[Deleted User]

A word of warning, we've just got a new mortgage (with my existing lendor), and we put we had the deposit as savings. Nationwide then asked for proof of this money. Luckily we did have it all, it was just in lots of different accounts.

You might be OK, but be prepared that they might ask for proof.

Doozergirl

If you don't have proof of a deposit, you don't have a house! There's not a lot of point in even applying for a mortgage in that case...

I'm kind of assuming that the OP has the money in the bank, but they don't want to cause concern by utilising the 'R' word

bunnyfuller

Actually, good point,

I will not be in receipt of the money until late April time. Oh what to do, what to do? We're trying to go for a new build property, which is obviously put your name down pronto....

any ideas again?? thanks for advice so far...

silvercar

I was going to say that I don't understand why they are asking the question. if you didn't have the deposit you wouldn't be able to buy the house and you wouldn't be applying for the mortgage.

But now you say you may not have the deposit in time!

I am confused why Nationwide asked, we just put together all different sources of money, including out of my business, but the building society never asked where the money was coming from.

If there is a time gap between needing the deposit and getting your redundancy payment you need to consider taking a larger mortgage for a short time. Make sure (at peast part of) it has no redemption penalites so you can pay that redundancy payment into the mortgage. Or get an offset mortgage so the redundancy payment can go in the savings pot.

Doozergirl

THey won't stop building new houses before April.

I really wouldn't commit to purchasing a property without money in the bank to pay for it unless you are able to afford taking out a mortgage with a higher Loan to Value Ratio. Make sure it will allow you to overpay the lump sum from your redundancy payment, or if the property doesn't complete until after April, then simply reduce the amount you are borrowing before you get the mortgage.

Robert_Sterling

silvercar wrote:

I was going to say that I don't understand why they are asking the question. if you didn't have the deposit you wouldn't be able to buy the house and you wouldn't be applying for the mortgage.

They are not concerned so much with whether you have got the deposit or not but rather with Where it came from.
A money laundering regulation requires this to be checked

Debt_Free_Chick

bunnyfuller wrote:

what can I put as sources of deposit? obvioously sale of previous property (applying for mortgage with current lender) but the other bit...without making them run a mile...????

I have to admit that I'm not clear about why you think there might be a problem.

Is it that you think that mentioning that you expect to be made redundant in April will ring alarm bells with the mortgage application?

If so, then I would simply state that the deposit is made up of equity from your previous house sale plus own savings. AFAIK, it will be your solicitor who will "check" the source of the deposit at exchange/completion, to comply with the money laundering regulations, which is to ensure that the money doesn't arise from criminal activities. The mortgage company won't be checking this - your solicitor will.

Are you concerned that the application might be declined if the lender thinks you won't have a job? If so, then surely you can just explain the situation i.e. that your current job will be redundant in April, but that you already have another offer.

Is redundancy an absolute certainty? Could you still afford the house if redundancy did not happen? If not, then you might want to rethink the purchase now.

regards

bunnyfuller

The house completion isn't until June so I presume we wont need the money before then. I will definitely getting the money then and will also be in employment so affordability isn't a problem.

Having agonised for a few days I actually called the mortgage company and gave them ALL the facts and they're not bothered in the least, particularly as our deposit is 60% of house value.

And guess what they said to put redundancy lump sum down as?????

SAVINGS lol lol