Does the deposit size make a difference??

eleanor73

Hey,


Just wanted to ask people on here who are cleverer than me why a deposit size makes a difference to a seller? We have just had an offer rejected because 'the other offerer/buyer offered the same but had a bigger deposit'. Seems unfair? Why would they care?


Thanks in advance.


Eleanor


P.S. Hope this is the right place to post.

kingstreet

Larger deposit = lower loan to value = less risk to a lender = more likely/quicker to get mortgage.

eleanor73

kingstreet wrote: »

Larger deposit = lower loan to value = less risk to a lender = more likely/quicker to get mortgage.

Thanks. Even if we have a mortgage in principle?

Lokolo_2

eleanor73 wrote: »

Thanks. Even if we have a mortgage in principle?

Yes, that is only an indication of how much you are likely to be able to borrow, it isn't a guarantee of a Mortgage!

kingstreet

eleanor73 wrote: »

Thanks. Even if we have a mortgage in principle?

If you presume everyone starts from the point of an agreement in principle, perceived wisdom is the applicant with the largest deposit will get their mortgage offer first.

TBH I'd be more interested in which lender each potential buyer planned to use.

eleanor73

Ok thanks anyway - just seems a bit unfair as it's not like we have a small deposit - it's quite big. Back to the drawing board!

Foxy-Stoat_3

The buyer may pull out due to survey results, their onward chain breaking or changing their minds, so all is not necessarily lost.

eleanor73

Foxy-Stoat wrote: »

The buyer may pull out due to survey results, their onward chain breaking or changing their minds, so all is not necessarily lost.

Thanks - we've already offered on this house before and been beaten by £1K but the chain broke down so we got another chance. Unfortunately it wasn't just us that got another chance. So close!

Hoploz

Third time lucky?......

stator

I don't think it will make a difference to the amount of time it takes for your to get your mortgage offer, that's dependant on affordability, ie the mortgage payments.
What does make a difference is how vulnerable you are to a bad survey. 95% LTV is very vulnerable, if the valuation comes back below the asking price they can't proceed without dropping the price. Anyone who is buying with 70% LTV if the survey comes back bad will be pushed up to 80% LTV etc

moneyistooshorttomention

When I sold my last house my EA's eyes were popping out of his head at how large a deposit my buyer had to put down.

I also regarded it as a plus point because the buyer wouldn't be scraping like mad for a much bigger mortgage than they could realistically afford. (I had promptly looked up where they planned to get their mortgage from and what deal they would be getting and checked out for myself that that meant the mortgage payments would be affordable for them;)).