Question about a Lump sum payment
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mac9091
Posts: 25 Forumite
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.
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.
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Comments
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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.
You'll need to find the full price.0 -
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"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
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.0 -
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.0 -
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"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
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".0 -
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.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
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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.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
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.0 -
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.0
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