Right to aquire deposit

87becca87

hi i am new to this and first time buyer. My question is can i use my £9000 discount as my deposit for my mortgage? Home valued at £90000.
i cannot save for a deposit which is why i am going down this route. I have a secure well paid job, and a good credit report. I have 3 children (currently on maternity leave) my mortgage broker said to me today that no one can use their discount as their deposit and he will look into 100% mortgages. Is this right? 

Also im worried that i wont be accepted while my income is lower than usual as on maternity pay but i have sent my broker 3 payslips from before i went off. Should i wait till i go back to work before i apply or will the lenders take my circumstances into consideration? 

Thanks in advance. 

Snookie12cat

87becca87 said:

hi i am new to this and first time buyer. My question is can i use my £9000 discount as my deposit for my mortgage? Home valued at £90000.
i cannot save for a deposit which is why i am going down this route. I have a secure well paid job, and a good credit report. I have 3 children (currently on maternity leave) my mortgage broker said to me today that no one can use their discount as their deposit and he will look into 100% mortgages. Is this right? 

Also im worried that i wont be accepted while my income is lower than usual as on maternity pay but i have sent my broker 3 payslips from before i went off. Should i wait till i go back to work before i apply or will the lenders take my circumstances into consideration? 

Thanks in advance. 

No. Every bank requires a deposit. This is so they have some leeway and collateral if you do not pay and they repossess it. The more deposit, the less risk and better rates. A bank will only lend you the purchase price money and not more. So if you are paying £90k for it, thats all you are going to get lent, not £99k.

Thankfully (not for you) there are no such things as 100% mortgages anymore. They were a big contributor to the financial collapse. Lenders will only lend you 4-5x your salary and will look at payslips and P60. I would probably wait until you have saved a deposit and have gone back to work to apply, as you will likely have more options than you would on maternity. 

Gavin83

What’s the discount for?

Ultimately you really need a deposit. I didn’t think 100% mortgages existed anymore but if they do they do it’s likely to be from specialist lenders and the rates will be extortionate. I also think your current reduced income will be an issue too.

It’ll be much easier if you save a deposit and buy once you’re back at work full time.

87becca87

Sorry i should have been more clear. I am wanting to buy my council home and the valuation was £90000. I get £9000 discount so would pay £81000. I was always under the impression that i could use the £9000 as a deposit and need a mortgage for £81000. 

Obviously i have been misled with this information. 

strawb_shortcake

Under the RTB (obviously different and greater discount) I was able to use my discount as deposit. We went with Natwest, who also took CB and CTC as income but can't recall if my salary at the time was sufficient without the benefits?

Barclays on the other hand wouldn't entertain us without an additional £10k deposit from us.

You might want to look for a different broker

87becca87

@annabanana82 thanks for this. I thought i was going mad. I spoke to natwest and llyods they said they did take discount as a deposit. I told the broker this today and he said i was misinformed. Thats very helpful thank you. 

sammyjammy

you need to look at specialist RTB lenders/brokers

anthony_constantinou

There are some rules that apply for council tenants to buy property.  Few of them are the time period of your stay and type of tenancy you are on. If you come under the rule of having benefit, then surely it will help you to get mortgage for home.

__________________________________________________________

Anthony Constantinou | Anthony Constantinou CEO CWM FX   

NQManchester

Regarding your maternity leave, I had no issues using my full salary for my mortgage application whilst on mine. I imagine different banks will have different requirements but mine (hsbc) wanted a letter from HR confirming my return date and salary and I had to confirm I would be going back full time. 

87becca87

@NQManchester great thanks. My broker did say that today actually that i might need confirmation when im back and that im full time so hopefully no issues with that. 

aoleks

you can't get a mortgage at the moment, I'm afraid. regardless of discounts, property type (RTB) and other details, you will need a deposit (cash), at least 5% of the value of the house. what you say doesn't make sense, because a £9000 deposit plus a £81000 mortgage would mean you pay £90k for the house, when in fact it's only worth £81000.

your income is also insufficient to cover the mortgage based on what you said, unless you have an extremely good maternity pay arrangement (90%+ of your usual income) or a partner who earns enough. while they will use the payslips you provided, you have an obligation to inform them of a change of circumstances, which maternity leave is. if you don't, it amounts to mortgage fraud and that could mess you up for life, where no lender will ever touch you again.