Already applied for a mortgage, can we reduce the amount we want to borrow?

ellie27

We put in the full mortgage application a week ago, for £107k, 35% LTV.

We have been doing sums and working out what would happen if our mortgage was declined. We could afford to buy the house in cash, but almost all of our savings would be gone.

If you are in the position to be able to pay in cash should you? How much should you keep back?

Assuming we get the mortgage for that we have applied for, can we decide we actually only want a mortgage for £70k? Or would we have to go through the whole process from start again. When we are applying for £107k and we get it does that imply that they would ok us deciding we want to borrow less instead by putting in more savings.

We have supplied the broker with proof of our deposit but not shown any other savings.....should we have shown all savings we have?

Any advice is great, thanks!

amnblog

You can reduce the amount of your mortgage within the Lender's minimum limits.


If you reduce lending you will need to prove the higher deposit.


The broker will be disadvantaged if a £107,000 application turns into £70,000 or less - so their fees may be altered (if any).


Do not pay cash if there is any likelihood it may leave you needing to borrow against the property within 12 months.

ellie27

So frustrating this wait!

Thrugelmir

What product have you applied for? As there's always the option of overpaying. Rather than changing your application now.

ellie27

Its a Coventry BS 3 yr fixed rate, it allows 10% overpayment.

How does that work. eg say we take out £100k mortgage, after the first couple months can we make a lumpsum overpayment of just short of 10k with no penalty charge?

Thrugelmir

In essence yes.

barbedhook

If you can buy it cash I would and put what woul have been your mortgage payments into an isa then it wouldn't take long to build up an emergency fund in case anything went wrong. It's just my personal opinion good luck on what you deceit to do

In_For_A_Penny_2

We are in a very similar position. In the end we opted for a smallish mortgage as rates were so low and we would still be able to keep a decent cash safety-net earning more (just about) than the interest on the mortgage.

We have obtained a 2 year fix that allows for 10% overpayment which we will probably make later in the year if there are no other surprise expenditures associated with the house.

Depending on what interest rates are like in 2 years time we still have the option of paying off the remaining mortgage then.

Would a similar scenario work for you?