Deposit situation

MrJB

You should create your own thread. But you probably wont be able to secure a second mortgage against the property as the current mortgagee won't allow it and your second mortgagee will probably want a first charge. Either that or you'd end up with secured debt at a less than preferential rate.

You could look to remortgage the property, although bear in mind that as you'd not be living here you'd have to get a BTL mortgage. In addition as of 1st April there will be additional SDLT on the new property you purchase under the 2nd homes rules.

AnotherJoe

HumptyDumpty wrote: »

Hi,

Hope I'm posting in correct thread. I've a different situation to the OP in respect of a deposit.

I've a mortgaged maisonette which I'm putting on the market soon and I'll be using the funds from the sale as a deposit. However, should the property NOT sell, can I still obtain a mortgage using the equity in the maisonette as a deposit?

No.

You might be able to remortgage the maisonette in order to release equity but then you'd end up with two mortgages (if the company would let you get a second one), extra stamp duty etc.

Here's an analogy, if you were buying a second hand car off someone for 10k, financed from a bank loan for 8k and 2k cash out of the 5k you'd get when when you sold your old car, and you didnt sell it in time, do you think they'd be happy with you handing them a bit of paper that said "you now own £2k of that old car over there" ?

ps and no you arent posting in the right thread, why didn't you just start your own one?

00sacha

We are submitting our mortgage application tomorrow and we've had to provide proof of deposit as part of the application. Also, after our offer was accepted we found out the vendor wanted to sell asap so relying on it taking a certain amount of weeks to exchange to get the full deposit together wouldn't be a very good idea. Hope that helps. I know how hard it is to stay patient but it'll be worth it in the end!

KerrBearrxo

Basically you only need a mortgage in principle to make an offer and view houses, some bad EA don't even make sure you have this (ours didn't).

If your offer was accepted you would need a proper mortgage offer (takes about a week). and then the bank needs to value the property which is free first time around but then costs after that circa £300 each time. This takes about another week. Before you can even get a mortgage offer you need proof of deposit.

You then need about £1000 for solicitors fees to which about £300-400 of that needs to be paid quite promptly.

We went to view a property after having the first one fall through and another couple went after me and my boyfriend and put an offer in. The seller went with us because they only had a mortgage in principle whereas we actually had a full official offer. Keep that in mind too. You'll be going against people who are ready to go.

McTaggus

From my own perspective, I was 4K short of our deposit amount when we put in an offer (had to use the funds to pay for emergency surgery for the dog, not had it back from insurers yet). It wasn't raised as an issue from my lender and my solicitor just needed a copy of it before we got close to exchange. Didn't present an issue for us that we didn't have this ready from Day 1 - but then again I knew the funds would be there by X date. I guess it depends on how sure you are that you are going to be able to get the funds...?

Shauna4991

Hi all,

Thanks for your comments. We took a sensible approach and we've waited - didn't put an offer in and didn't progress with the house. We've also stopped viewing them too, until payday this month (24th) where I'm pleased to say that we will have secured the full deposit amount in our savings account. (A month living like paupers but I'm sure will be worth it!)

We've spoken with the bank about the surveyors costs and have a full idea of these more clearly now - so those are what we're waiting to obtain before progressing. The bike is listed for sale and has a few interested parties so it seems like more a case of not 'if' but 'when' thats going to go - had an offer of £1600 on it so far. We're waiting for full payment on this before progressing on any houses.

However, we're now starting to go back onto right move and have spotted a few that we're saving but not viewing yet. We'll start viewing at the end of this month again, and hopefully will begin to put offers in on anything that we like mid-April time.

Thanks for the advice. It has removed the stress waiting and I'm sure it will pay off.