Mortgage Lending Potential

Terrylw1

Hi,

I was wondering if anyone knows how having a pot of savings such as £30-40k can affect your mortgage application if you are willing to move it into say, a CAM or offset of some sort?

Does it increase your lending potential or have no effect? Or would it only have an effect if you offered it as a deposit?

Thanks

herbiesjp

Increasing your deposit can increase your lending potential i.e. a lender may be happier to strecth income multiples/affordability calculations if you are borrowing 60% as opposed to 95%

A bigger deposit can also open up lower rates for you with some lenders

Terrylw1

Thanks Herbie,

Do this count if you take a mortgage and pop a sum like this into a CAM or offset?

I guessing that it may not as you pay the deposit and then you would add the money which would be used to negate it's value in interest?

I guess for me it's becausde I am happy to place a savings pot in there for a fews years while I get settled but I wanted access to it as I may need some of it to start a business later.

Thanks

silvercar

You could always add comments in the "any other information" section:

"I already have savings of £X (savings statement attached) that I intend putting straight into the offset savings account."

If the mortgage requested is above standard lending criteria, the underwriters will consider the borrowing amount. This means a human decision rather than "computer says no", so the extra information could swing things your way.

Terrylw1

Thanks Silvercar, I was hoping that could be the case.