Mortgage deposits

Adrianlivya12

Hi 
I’m hoping to be a first time buyer we are looking at buying a house between 260k to 350k we currently have a 26k deposit and are trying to move from our home for several reasons sooner rather then later meaning we probably won’t build up a greater deposit 
As decent houses at the lower end are available now and then but rare and quickly come off the market what happens if we get an agreement enough to by a 260k house but no decent houses are available and a few months later we haven’t found anything and we have a 30k deposit can we keep getting agreements each month we’ve saved more and not found a home to increase our deposit for 10 percent of a home. Thanks 

CSI_Yorkshire

You can't get an actual mortgage offer without having an actual house you are wanting to buy with it.

Unless you know the actual house that you want the money for, you can only get a decision in principle.

ACG

There is no point in applying for DIPs all the time. 
Wait until you find a property that is within budget. Then apply. 

Or speak to a broker, they can get everything they need and once you find somewhere get you a DIP for the actual figures not just rounded off figures as you may also end up agreeing a different price to what one comes up for. 

Adrianlivya12

Sorry super basic question then say the is a house and do I ask to borrow the asking price and if I haggle it lower then they adjust the agreement to the actual house price purchased?

MWT

Adrianlivya12 said:

Sorry super basic question then say the is a house and do I ask to borrow the asking price and if I haggle it lower then they adjust the agreement to the actual house price purchased?

The DIP confirms what your are likely to be able to borrow, that is all.

Once you have completed your haggling and your offer has been accepted, then you put in the application for the mortgage based on your accepted offer...

shining_this_way

We were looking in the same price range as you last year. We could go up to £320K but were hoping to find somewhere for around £250K. The approach I took:

• I got an agreement in principle for the maximum mortgage amount I could. I did this online with Nationwide (it took minutes).
• I used this to provide proof of funds to EA for offers on three houses with different values. The EA just wanted to know we had enough funds available. It didn't matter exactly what the deposit/mortgage split was.
• When we had an offer accepted (on the third house), our broker then looked for an actual mortgage for us and the agreement in principle made no difference to this. We applied for a mortgage that was 30K less than the agreement in principle.

So the agreement in principle was useful for two reasons - it helped us work out our budget right at the beginning, and then it helped us show EA that we would be able to fund the purchase. But it didn't factor into actually getting our mortgage.