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Lifetime tracker and gift: higher deposit or post-completion lump sum?
redonion
Posts: 215 Forumite
I'm applying for a lifetime tracker (Santander). I've been offered a gift from parents towards a deposit. Since it has zero ERCs, and won't cause me to cross an LTV boundary, I can choose whether to put the money actually in the deposit itself, or leave it until just after completion and pay off some of the mortgage as a lump sum.
What should I do in order to maximise my chances of being accepted for the mortgage? Note I'm not interested in the arithmetic of exactly how much I'll pay extra if say I ended up paying one repayment without the benefit of the gift - that's relatively easy to work out.
A complication is that there are two possible outcomes of the mortgage application:
1. The valuation comes in the same as the accepted sale price. I can just about pay the deposit on my own, achieving the target 75% LTV. However, I would accept a gift to increase the deposit amount, even though it would not take me over an LTV boundary.
2. The valuation comes in low. The gift amount could be raised to hit the maximum LTV for the mortgage I'm applying for of 75%.
Might a higher deposit on the application form make me more likely to get accepted if 2. happens, even though it's very likely I can hit the 75% LTV regardless of the valuation, by increasing the deposit amount if that situation arises?
On the other hand, it's a minor added complexity to have to declare the gift (not to mention decide how large it will be up front, before the valuation is known).
What should I do in order to maximise my chances of being accepted for the mortgage? Note I'm not interested in the arithmetic of exactly how much I'll pay extra if say I ended up paying one repayment without the benefit of the gift - that's relatively easy to work out.
A complication is that there are two possible outcomes of the mortgage application:
1. The valuation comes in the same as the accepted sale price. I can just about pay the deposit on my own, achieving the target 75% LTV. However, I would accept a gift to increase the deposit amount, even though it would not take me over an LTV boundary.
2. The valuation comes in low. The gift amount could be raised to hit the maximum LTV for the mortgage I'm applying for of 75%.
Might a higher deposit on the application form make me more likely to get accepted if 2. happens, even though it's very likely I can hit the 75% LTV regardless of the valuation, by increasing the deposit amount if that situation arises?
On the other hand, it's a minor added complexity to have to declare the gift (not to mention decide how large it will be up front, before the valuation is known).
0
Comments
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What multiple of your salary would you be seeking to borrow with each scenario?
Any adverse credit, dependents, other loans etc which may impact on the affordability question?0 -
Between 3 (but likely higher) and 3.5.What multiple of your salary would you be seeking to borrow with each scenario?
No dependents or other significant loans, one or two missed credit card payments over 2 years ago.Any adverse credit, dependents, other loans etc which may impact on the affordability question?0
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