Do lenders expect to see a contingency fund?

demim00nde

Hello. I am looking at getting a mortgage soon, and have enough for my deposit and the various fees and expenses, with a bit extra to make sure I’m not sailing too close to zero.

In your experience, do mortgage lenders expect to see evidence of enough additional savings to cover a period - say three or six months - of surprise unemployment? My job is fairly secure and I have good redundancy provision, so I don’t feel I need that. Having to show such funds would reduce the amount I can bid for a property.

Many thanks.

K_S

@demim00nde With the vast majority of lenders, it won't make any difference whether you can evidence any 'spare' funds or not.

In fact, where lenders ask for proof of deposit (not all lenders do, and not for every case), the checks are limited to the deposit, not any further costs such as stamp duty, moving costs, etc.

During covid, a couple of specialist lenders were requiring that the applicant be able to show X months worth of mortgage payments as a buffer, but as far as I'm aware no mainstream lender did the same and even the specialist lenders have since dropped the requirement.

demim00nde

Thanks so much - that’s really helpful.