Advice re mortgage application/deposit

Sicily1991

Hello,

My situation is that I have just enough saved up for a 10% deposit including a gift from my father.
I.e. I have £1600 in a HTB ISA, £1400 in a savings account, and £7500 in my current account (higher interest) which is where all my outgoings come out from. In all I need £9k of my own money, in addition to £6k from my father to make up the deposit which leaves me with only £1.5K for this month's outgoings until I get paid again. Purchase price is £150k.

My question is: as I'm preparing to put in a mortgage application, will the lenders be concerned that I am using practically all my money to demonstrate the deposit? I know that it will probably be another 2/3 paydays before I actually need to transfer the deposit so I'll have more savings by then, but I'm concerned the bank will say I don't have enough to live off if I'm using all my savings.

Exodi

Sicily1991 wrote: »

Hello,

My situation is that I have just enough saved up for a 10% deposit including a gift from my father.
I.e. I have £1600 in a HTB ISA, £1400 in a savings account, and £7500 in my current account (higher interest) which is where all my outgoings come out from. In all I need £9k of my own money, in addition to £6k from my father to make up the deposit which leaves me with only £1.5K for this month's outgoings until I get paid again. Purchase price is £150k.

My question is: as I'm preparing to put in a mortgage application, will the lenders be concerned that I am using practically all my money to demonstrate the deposit? I know that it will probably be another 2/3 paydays before I actually need to transfer the deposit so I'll have more savings by then, but I'm concerned the bank will say I don't have enough to live off if I'm using all my savings.

So from the figures you've posted, you have £1600 (htb) + £400 (htb bonus) + £1400 (s/a) + £7500 (c/a) + £6000 (gift) = £16,900. The deposit is £15,000 but you will need to pay for conveyancing fee's (~£1,500 inc searches) and a survey (~£400), etc, it's clearly quite tight.

To answer your question, you will have no issues with the lender or solicitor however I would be saving every penny over the next 1-3 paydays so you don't move in with £0.00 in your bank.

Regarding your suggestion from the bank, it just wouldn't happen. A lot of people move into a house with not much more than the clothes they're wearing.

Sicily1991

Thank you for your reply. In terms of the timeline of when I'll actually be transferring the deposit money to my solicitor- how close to the exchange date is this? I am able to save about £800-£1000 a month with my current salary but as you correctly point out- I have the legal costs to cover over the this period which will significantly reduce what I actually save.

muhandis

If you're talking about the 10% upon exchange, it's usually not more than 1-2 days before the planned exchange date.

Sicily1991 wrote: »

Thank you for your reply. In terms of the timeline of when I'll actually be transferring the deposit money to my solicitor- how close to the exchange date is this? I am able to save about £800-£1000 a month with my current salary but as you correctly point out- I have the legal costs to cover over the this period which will significantly reduce what I actually save.

Thrugelmir

Solicitors will require cleared funds prior to effecting exchange. This will include all their fees, stamp duty etc not just the deposit.

Exodi

Thrugelmir wrote: »

Solicitors will require cleared funds prior to effecting exchange. This will include all their fees, stamp duty etc not just the deposit.

This isn't true. You'll usually be provided with a completion statement and solicitors fees are usually taken out of 'the pot' on completion - can evidence this as I've literally just exchanged :rotfl: