Where deposit sits

Noobie2011

Probably a stupid question but does it matter where you deposit for your new house sits until it is needed.

To give a bit more detail we got the profit money from our house sale last Friday and provided a bank statement showing proof we had the deposit money. However as we have 3 Overdrafts and a large credit card balance which is charging fees daily and monthly I have separated the deposit over these 4 accounts roughly being O/D - £700, £1400 and £5000 and the CC - £5000. So the money is not saving us quite a bit for the next few weeks it sits there but then can be used for the deposit when needed.

Just wanted to check this would not in theory be an issue.

Thanks

glentoran99

You now don't have a deposit, You will be borrowing the deposit which wouldn't be looked upon favourably


You have used your money to pay off debts

ACG

As above, you will be paying off debts, but then running those debts back up to fund the deposit.

Not many lenders will allow you to take out finance to fund a deposit.

If you need that money for the house purchase then I woudl keep the money separate and find a lender who does not mind you (presumably) living in your overdraft throughout the month as many lenders will have concerns about that.

Noobie2011

Thanks for the replies.

We have stated to our broker that the money in these accounts are for the deposit and to make that clear to the lender but I get what you are saying.

In theory we have confirmed we will be clearing 5-6k of debt but not the rest so as far as the lender is concerned we would be still using these overdrafts and CC but will get this all confirmed once we look to apply next week

Thrugelmir

Noobie2011 wrote: »

In theory we have confirmed we will be clearing 5-6k of debt but not the rest so as far as the lender is concerned we would be still using these overdrafts and CC but will get this all confirmed once we look to apply next week

Lenders aren't interested in peoples theories. Cash is cash. Borrowing is borrowing. Net worth is the difference between the two, either postive or negative. When it comes to the deposit. The solicitor will require evidence of the source of the funds, this they will report back to the lender.

Overdraft usage etc will be reviewed at the underwriting stage.

Noobie2011

Looking at it more as think it would be better to have the deposit money in one account in a bank then at the moment we could have around 7k in one account and then between now and when the deposit is due we could easily enough raise another 5k disposable to make the 12k

It is probably better doing this to stop any issues with the lender and paying any interest and fees we may occur on the debts

glentoran99

Noobie2011 wrote: »

Thanks for the replies.

We have stated to our broker that the money in these accounts are for the deposit and to make that clear to the lender but I get what you are saying.

In theory we have confirmed we will be clearing 5-6k of debt but not the rest so as far as the lender is concerned we would be still using these overdrafts and CC but will get this all confirmed once we look to apply next week

the money isn't "in the accounts" though, I don't know your figures but if you have a 5k overdraft and put 5k in that account then that account balance is 0


what happens if the bank withdraws the overdraft? which can be done at any time?

Noobie2011

glentoran99 wrote: »

the money isn't "in the accounts" though, I don't know your figures but if you have a 5k overdraft and put 5k in that account then that account balance is 0


what happens if the bank withdraws the overdraft? which can be done at any time?

I get what you mean as in regardless if we are going to use that 5k the minute we moved it into the overdraft account then it becomes 5k of the banks money and 0 ours.

As we are only stating we have paid off 5-6k of debt which we have the rest of this money I will put in a non overdraft account which shows it is all our own money for the deposit and makes clear of any debts we have and are looking for the lender to be fine with.

The upside of this is the deposit money is there plain and simple and our money for the deposit but the downside is the overdraft fees etc will continue but we can budget for that no problem