Mortgage Application: Proof of Deposit

Richardflair

Hi all,

My wife & I are buying a new build home. As the property won't be ready until Oct/Nov 17, we're applying for an agreement in principle with the lender now.

The lender has asked for proof of deposit at this stage which has caught us off guard. I thought the mortgage lender would require proof of deposit after the AIP, once we'd come closer to completion?

I'm being told the lender is just 'being careful' but I'm sure there's a reason for it. Has anyone gone through this experience or can help me understand better?

Westminster

Are you using a broker?

If you are and it is they who have told you not to worry - then do as they say, and don't worry.

Richardflair

It's more the intrigue of being told ID, bank statements, etc are enough, then to need to prove your deposit situation.

In reality, we don't have the full deposit today. It is being saved over the next few months by moving back home, overtime, etc. We're sitting around 40% today. The potential for variables in our income are making us wonder if this is will count against us with the lender.

kingstreet

You will normally be expected to produce proof of deposit at application stage, not at completion as that might be months away on a newbuild.

Even though there is a long wait, you will usually be expected to apply for a mortgage and exchange contracts within 28 days of the reservation with completion 'on notice' of the build ending.

Richardflair

Ah, that makes everything that bit clearer.

You'd be surprised how many times we've mentioned that we're 'saving for a deposit' during meetings...

csgohan4

banks go on the now not on the future, if you don't have the deposit now, that may affect your loan to value or even ability to get a mortgage now

BLOW_FLY

Oddly we were never asked for proof of full deposit.

The subject came up in my first meeting with the bank, they asked about the deposit. I had just under £20k in my account and I told them the rest was coming from liquidation assets and other savings accounts.

Never once again did they, or the solicitors ask for proof of full deposit and I only transferred all funds into the account with the bank a week or so before exchange.

Just my recent experience.

BF

kingstreet

BLOW_FLY wrote: »

Oddly we were never asked for proof of full deposit.

The subject came up in my first meeting with the bank, they asked about the deposit. I had just under £20k in my account and I told them the rest was coming from liquidation assets and other savings accounts.

Never once again did they, or the solicitors ask for proof of full deposit and I only transferred all funds into the account with the bank a week or so before exchange.

Just my recent experience.

BF

Some lenders don't ask, some do.

Some delegate it to the solicitor, some don't appear bothered.