first time mortgage application

ghummy

Hi All

just after some advice, obviously will be speaking with a mortgage adviser at the correct time however currently just piecing all the puzzle together.

currently i own a home, i own this outright and do not owe anything on it.

We will be putting this on the market in the coming weeks, current valuations indicate should be looking at around 200k.

looking at homes to buy, we are thinking of a maximum budget of 240k

all my current finances are tied within this house therefore have no deposit as such.

obviously what my house is valued at what offers i accept may be different and vice versa on the home we will be buying.

i want to ask how does this work when applying for mortgage.

lets say i wish to mortgage 40k, my house sells for the asking price, when the mortgage company ask what deposit i have for the house do i say i have nothing as the money is tied with the should im selling, or do i give them the value of my property with the understanding that the figure may fluctuate.

ive never purchased a house before so all this is completely alien to me, current house is inherited so didn't go through this.

any advice would be greatly appreciated.

[Deleted User]

2 questions appear on the application form and you will complete as follows:

Amount of deposit: £200,000
Source of deposit: Equity in existing property to be sold

You generally wouldnt be applying for a mortgage on your purchase until you have a sale agreed so at that point you will know how much deposit you will have to put down (dont forget about fees)


You can apply for a decision in principle based on worst case scenario so you know you can take a lower offer if need be, and change it later if the offer is higher/lower than expected

Kelbie

You just state the deposit you are setting aside for the new purchase, the lender will ask the source of money and you state ‘sale of property’.
Just remember you will need to allow a bit of money for stamp duty and solicitors conveyancing.