Advice please what can I do with my savings

Hlkns

Hi guys, first of all I'll ask not to move this thread to money saving forum because it is related to mortgage as well.

Please share your thoughts and experience!! I'd like to hear as much opinions as possible.

We have our offer accepted on a house, but vendor still can't find new property to buy and refusing to go to rented property.

Mortgage details which we applied:
£327k mortgage with 2.7% fixed for 5 years.
Purchase price £385k
Term: 40 years
Days left until mortgage offer ends: 121 days

To be honest I believe that UK economy will go down really badly in short time. And it's time (too late) to start thinking about plan B. Because of that I predict that house prices will go down sharply as well. 

My thoughts why:

1. Uncertainty in economy.
2. Harder to borrow money.
3. It costs much more to borrow money.
4. Skyrocketing bills and inflation will erase savings from most peoples pocket.
5. Huge numbers of people will ruin their credit files soon.
6. Buy-to-let investors will start facing missed rent payments.
7. Upcoming increase in unemployment.
8. Increased repossession numbers

* List goes on and on in my mind. It's just my thoughts and it can be far away from reality. Please share your thoughts with me.

If we can get that house with our current mortgage offer then we are still interested in buying. Just because we have fixed low rate. If our mortgage offer expires and I have to apply for new product then most likely we will not buy it.

I can't see how house prices can stay at that high when whole system is about to reset.

There has been continuous 15 years with good opportunities to buy a property. That's why it's so expensive right now.

• Easy to borrow
• Cheap to borrow
• Cheaper to own than rent
• Various borrowing schemes
• Lockdown impacts to force you save more money. ( Later maybe spend on deposit )
• Stupid Sunak decision on stamp duty holiday. ( Rich people rushed to buy houses and lowered supply )

I might be stupid to think about that but IMHO it's about time to see huge dip.

I have shared my though what is coming so its gonna be easier to understand my upcoming questions. Please give me some advice on questions listed below:

Q1. When can I say it's already too late? I mean how many days should be left until mortgage offer deadline to think that there is still hope to buy it with current mortgage offer.

Q2. I have £120k in savings. Right now it stays in my current account. I am worrying that only 70% of my savings is protected under FSCS. I know I can't apply for another bank account while trying to secure mortgage. How could I sort it out?

Q3 Is there any chance how can I open saving account without impacting mortgage application? I could pay my council tax bill just from earned interest if I could move my savings to instant or short notice withdrawal savings account.

Every opinion is welcome. Big thank you in advance.

[Deleted User]

I would speak to your conveyancer and ask what is the last day that you can wait to for moving this sale along for them to complete the process in time. Then give the seller that as a final point for them to have secured something . Another alternative is start looking now for another property and then transfer current offer to that house on same product . If your not successful finding anywhere else then ask a few weeks before this offer ends to extend it. 

Hlkns

Deleted_User said:

I would speak to your conveyancer and ask what is the last day that you can wait to for moving this sale along for them to complete the process in time. Then give the seller that as a final point for them to have secured something . Another alternative is start looking now for another property and then transfer current offer to that house on same product . If your not successful finding anywhere else then ask a few weeks before this offer ends to extend it. 

If I find new property and want to transfer that mortgage offer I will need to select new product with higher interest. 

Same story if I want to extend current offer. I think it would be stupid decision to place an offer on a house during peak, then close your eyes whats happening arround and accept higher mortgage payments while house prices declining.

[Deleted User]

You won’t need to select a new product if still within the LTV your broker can ask it be done as an exception. An extension won’t put you on a higher rate either 

RobM99

£120,000 in a current account? What's it paying you? 0.0% at a guess....
Only £85,000 is Protected in a bank (but I can't personally see any of the big banks going 'bust' - that's just my opinion though!).

Hlkns

RobM99 said:

£120,000 in a current account? What's it paying you? 0.0% at a guess....
Only £85,000 is Protected in a bank (but I can't personally see any of the big banks going 'bust' - that's just my opinion though!).

Yes mate, thats why I am worrying. Lloyds pay 0.2% interest on that LOL. Thats why I'd like to put it into saving account while waiting.

Or atleast split it in half so all that money is protected under FSCS. But can't open other bank account now. (facepalm)

RobM99

https://www.lloydsbank.com/savings.html

Hlkns

@K_S I'd like to hear your opinion. Your answers always seems reasonable to me. Thank you in advance.

RobM99

Why can't you move money? Seems odd to me.

Hlkns

RobM99 said:

Why can't you move money? Seems odd to me.

Because I have just one bank account. Cannot open another bank account because it will be hard search.

The max interest rate I can get from LLoyds atm is 0.5% with instant access.

To be honest I'm not trying to gain as much interest as possible now, all I want to do is to protect whole sum under FSCS. Because right now only 70% protected.

JGB1955

Savings accounts don't trigger a hard search.  If you want instant access to the money, why not put £85K in (say) Marcus at 1.5%?  Plenty of higher paying accounts around too.