Question about a Lump sum payment

mac9091

Not sure how to title this but my question is a little strange.

I know for a fact that i will receive a lump sum payment in the region of £45,000 in about 10 years time. Can this be used when applying for a mortgage not as a deposit (obviously) but as a way to reduce the amount required to borrow thus reducing monthly payments?

i.e. Can the mortgage be obtained for £59,000?

Home valued at £140,000.
Deposit of £36,000.
Remaining value of house £104,000.
The Lump Sum of £45,000 can be paid in 10 years.

Or as i think, i still need to get a mortgage for £104,000 and have a repayment term of 15 years, and then paying the £40,000 in 10 years time to clear the balance?

The minimum repayment term would need to be 10 years minimum either way but if i the mortgage can be reduced because of the lump sum then i would save a fair amount in interest.

davidmcn

mac9091 wrote: »

i.e. Can the mortgage be obtained for £59,000?

Home valued at £140,000.
Deposit of £36,000.
Remaining value of house £104,000.
The Lump Sum of £45,000 can be paid in 10 years.

How would that work? You agree to pay £140k, but on the completion date you pay the seller £95k and say "don't worry, you'll get the other £45k in ten years' time"?

You'll need to find the full price.

csgohan4

Lender's only go on the now and not the future, your deposit now and salary now. so many ifs, you can generally borrow x4.5 your income


Btw Davidmcn funny post, made me chuckle

getmore4less

You can't buy something today with tomorrows money.

You can borrow money interest only now that will be paid off with tomorrows money.

What that means is you borrow it all now on repayment er a term that leaves you with at least the amount you get when the money arrives.

mac9091

I suppose i didn't do well explaining myself the 1st time round, reading it again. I'm not sure where i was going with that train of though.

No clearly i need to borrow the full amount in order for the seller to be paid. Could the lump sum be accounted for in the sense of in 10 years (of the 15 year mortgage) i will be in a position to pay off the remaining balance which would be around about £43K.

The £104,000 is just over 3 times my current wage, which will increase each year. So there wasn't even any need to mention bringing down the monthly payments.

csgohan4

mac9091 wrote: »

I suppose i didn't do well explaining myself the 1st time round, reading it again. I'm not sure where i was going with that train of though.

No clearly i need to borrow the full amount in order for the seller to be paid. Could the lump sum be accounted for in the sense of in 10 years (of the 15 year mortgage) i will be in a position to pay off the remaining balance which would be around about £43K.

The £104,000 is just over 3 times my current wage, which will increase each year. So there wasn't even any need to mention bringing down the monthly payments.

As above, if you don't have the lump sum now, it won't be accounted for, banks only go on the now

robatwork

What you know for a fact about money you will receive will have not the slightest influence on what a bank thinks you can afford.

The banks don't "know it for a fact".

enthusiasticsaver

As others have said no you cannot anticipate future income. The lenders work on current information. Your best option is to use the £45k in 10 years time when and if you actually have it to reduce the mortgage then the repayments will come down. No lender is going to allow you to borrow £45k interest free for 10 years. If you want to keep repayments low go for a maximum term of 40 years if you are young enough although you will end up paying a lot more that way.

ACG

Your deposit in addition to the mortgage money gets paid to the vendor on completion day.

£36,000 gets paid.
£59,000 gets paid.
£45,000 gets paid in 10 years?

You could potentially do a part and part mortgage, £59,000 on repayment and £45,000 on interest only. But you would need to evidence the £45,000.

One concern I have is how much that sentence contradicts itself...

I know for a fact that i will receive a lump sum payment in the region of £45,000 in about 10 years time.

ViolaLass

mac9091 wrote: »

I suppose i didn't do well explaining myself the 1st time round, reading it again. I'm not sure where i was going with that train of though.

No clearly i need to borrow the full amount in order for the seller to be paid. Could the lump sum be accounted for in the sense of in 10 years (of the 15 year mortgage) i will be in a position to pay off the remaining balance which would be around about £43K.

The £104,000 is just over 3 times my current wage, which will increase each year. So there wasn't even any need to mention bringing down the monthly payments.

So you want to make a lump sum overpayment in 10 years time? No need to discuss that with the bank now, just do it when you have the money.

Sawman

You could do a part and part mortgage, essentially an interest only mortgage for the bit you will pay off with the lump sum. You will need to evidence your guaranteed lump sum. I currently have one of these with leeds building soc.