Mortgage deposit shortfall...

Montyzumah

Hi All,

First post in years so please be gentle!

My partner and I have a flat each and we're looking to move in together. We've found a place we like and had an offer accepted, much to our surprise. (Yes I know we shouldn't have started looking or made an offer before sorting a mortgage and securing the deposit but we did. Spur of the moment thing.)

Anyway, both our flats are now on the market to sell at least one for the deposit. We only need to sell one. Alternatively we've been loaned £20k, deposit being £30k, by my partners parents but we're still £10k short.

My partner is dead set on this new house and we realise we may lose out to others but can anyone suggest a way to raise the additional £10k to make the purchase independent of the flat sales?

Make sense?

Thanks

Flashmanchop

Can you get the new mortgage based on your earnings, on top of the current two mortgages?

Really, it is more than the £10k you need - as you need the depsoit differnece, pus purchase price.

JimmyTheWig

Plus you'll need money for solicitors fees, stamp duty, etc.

Flashmanchop

I think it is unfortunate that the EA has put forward an offer to a willing vendor that is unvetted.

Its one of the biggest bug bears at the moment.

_Andy_

Why on earth make an offer and waste the vendor's time when you didn't have the money?

R_P_W

Think this is going to be very frustrating for the seller when they find out you are not in a position to proceed!

Yorkie1

The fact that £20K of the deposit is a loan, is likely to be a problem for the lender - or at least will affect how much they are prepared to lend you.

By the way, don't consider lying on the mortgage application if you get that far, to state that the £20K is a gift. You and your partners' parents will need to sign documents declaring it is a gift, and that is mortgage fraud if it is actually a loan.

You ask about ways to raise the additional £10K. You are unlikely to get a loan for this purpose, and again lenders are unlikely to accept a commercial loan as the source of a deposit.

I think the previous posters are right - you've overstretched yourself.

Montyzumah

Thanks for the replies. The downside with forums is that unless you include all the facts, meaning a looonnggg post, you get people wrongly assume things.
First of all, the vendor is a friend of a friend and fully aware of our situation. They have given us a 3 week grace period to sort something, agree a sale on one of the flats etc before trying to sell again.
Secondly, I have moved house many times and am aware of the costs. These are all accounted for hence the remainder being the shortfall in the deposit, which incidentally my mum was going to lend us until something cropped up unexpected.
Yorkie1... thanks for your considered reply and not assuming things which sadly the others have done.
If anyone else has any suggestions to specifically address the shortfall then I'm keen to hear them. Opinions and assumptions help nobody.

_Andy_

Bottom line is, if you haven't got the money, it's not going to happen.
No mortgage lender is going to accept personal loan funds for a deposit nor is any personal loan provider going to lend for that purpose.

JimmyTheWig

Montyzumah wrote: »

Thanks for the replies. The downside with forums is that unless you include all the facts, meaning a looonnggg post, you get people wrongly assume things.

People assume things because they have to. And, of course, sometimes those assumptions are wrong.

If anyone else has any suggestions to specifically address the shortfall then I'm keen to hear them.

The thing is, we don't necessarily understand what shortfall we are talking about.
You have talked about the deposit shortfall.
But what about the money to actually buy the place which you will, generally, need at the same time as the deposit.

Either...
(a) You need to sell a property to raise the mortgage to buy the new one,
(b) You are looking for ways to raise the money to buy the whole place without a mortgage, or
(c) You have unusual finances (e.g. high enough salary / low enough property prices that you can can get two residential mortgages) and we would need more details.


It would be like someone coming to the motoring board and saying "I don't have any legs. Any suggestions for starting my automatic car as I need a foot on the brake to start the engine?" without any mention of how they were going to drive the car once started. I don't think they'd get many sensible answers until they'd addressed that point.

Montyzumah

@Jimmy/Andy... thanks for the replies. I'll fill in some gaps...
One of the flats is BTL and has a shortterm tenant who is completely aware of our situation. The second is a residential but just been approved on Consent to let and we have a tenant waiting in the wings. Both flats will generate an income if we were able to keep them but unfortunately we can't as we need the equity from one to offset the deposit for the house we want to buy.
Mortgage on the house has been approved in principle by two lenders on a 90% arrangement.

Like the analogy about the motoring board :0)