Is this deposit okay?

Sponge_Cake

We've been offered a mortgage of £92,000.
The house we want to buy is £105,000.
We've put an offer in.
We were planning on putting down a £15000 deposit, would this be okay?
We're first time buyers so not sure how it works.

Lokolo

If you can borrow £92k and have a deposit of £15k then you can purchase up to £107k.

When you say you have been offered a mortgage of £92k, you haven't. You've been advised in principle you can borrow up to £92k. The mortgage offer will come once you have put in the full application and the bank has carried out a survey.

Personally with a £15k deposit I would try and limit purchase to £100k as you can then get an 85% mortgage which will be much cheaper, and easier to get, than a 90% mortgage.

Sponge_Cake

Yes that's right, a mortgage in principle.

How about if we put down £16000 for the £105,000 property? We've already offered £105,000. So we'd need an £89,000 mortgage in that case.

Lokolo

If you can afford to then yes. Have a look at the banks website and compare the rate and repayment amounts between a 90% LTV and an 85% LTV.

If your offer is accepted you should be looking at conveyancing firms and arranging a mortgage appointment with the bank.

Sponge_Cake

Our offer has been accepted.

We have an appointment with the mortgage advisor on Saturday.

Thanks.

bigisi

Bear in mind you'll need potentially £2-3k for fees for the whole transaction, are these included in your budget & deposit calculations?

Sponge_Cake

Do you mean the solicitor and surveyor fees?

Sponge_Cake

If so, we've budged for that

ashe

Solicitor fees, survey fees, HTB ISA fees if using one (only £50), Removals van, packing service if you want it, is the mortgage advisor a broker? if so potentially broker fees, potentially product fees for the mortgage depending on what is selected etc

ThePants999

An £89,000 mortgage has the advantage of being under 85% LTV, which might get you a better rate.

If it doesn't, or if the difference is negligible, I'd be inclined to take the full £92,000 mortgage, and have the £3K available for when you inevitably discover a bunch of work you want done after you move in, or as an emergency fund.