Buying a house with a cash incentive

HouseHunter26

Hey all.

I'm looking for some advice and couldn't think of a better title! I'm looking to buy a house and to state the obvious, my budget is limited by the best mortgage deal I've been able to get in the current economic climate.

I have a mortgage offer and I'm finding some properties that are out of budget relative to the mortgage, but I also have savings I could use to supplement the purchase. So I'm wondering what options I have to negotiate with the estate agent or directly with the seller.

As a first-time buyer, I'm not sure what the rules are for this, or whether I can offer to pay for any estate agent fees, build it into the fixtures or fittings cost, or just offer a cash sum...

Please can anyone share ideas, along with any implication, legal or otherwise, it would really help me understand what options I have. Getting a new mortgage offer is off the table due to the current market conditions.

Thanks

user1977

I might be missing something obvious, but why can't you just add your cash into the price? Your lender isn't going to mind the loan being for a lower percentage of the price.

HouseHunter26

My advisor has said this isn't possible. If I want to spend more, even if I make up the difference with cash and the mortgage borrowing remains the same, I must re-apply, which will void my current offer/rate.

MultiFuelBurner

Hello Tiger,

How much savings have you got?
How much do you earn?
How much do you need to borrow?

HouseHunter26

MultiFuelBurner said:

Hello Tiger,

How much savings have you got?
How much do you earn?
How much do you need to borrow?

I don't see the relevance of your questions and will not post this information. Can you explain why this information is relevant to answering the question?

MultiFuelBurner

I have a mortgage offer and I'm finding some properties that are out of budget relative to the mortgage, but I also have savings I could use to supplement the purchase. 

It's often good to know what people are working with and then they can advise what may be possible as a discount on properties that are just out of your reach.

Fair enough if you don't want to share this info👍

Good luck with your house hunt and bargain hunt Tiger 🐯

HouseHunter26

MultiFuelBurner said:

I have a mortgage offer and I'm finding some properties that are out of budget relative to the mortgage, but I also have savings I could use to supplement the purchase. 

It's often good to know what people are working with and then they can advise what may be possible as a discount on properties that are just out of your reach.

Fair enough if you don't want to share this info👍

Good luck with your house hunt and bargain hunt Tiger 🐯

Thanks for clarifying. I can say with certainty that the price of the house I want to buy will be higher than the mortgage I had originally applied for. Whether it's a £50k or £100k difference, it doesn't matter and largely depends on how much additional savings I want to add to the purchase. The question I'm really asking is whether or not it's possible to combine mortgage + cash to purchase a property, or whether it's just something that's simply not allowed, either because the estate agent, solicitors or mortgage company won't allow/support it.

MultiFuelBurner

Do you mean cash under the mattress which can't be traced or more likely savings in a bank that can be accounted for under money laundering regulations?

If in a bank and accountable or even cash and accountable then that is all fine and above board.

The cash(savings) will have to be lodged with your solicitor for exchange.

GDB2222

HouseHunter26 said:

My advisor has said this isn't possible. If I want to spend more, even if I make up the difference with cash and the mortgage borrowing remains the same, I must re-apply, which will void my current offer/rate.

I think your preferred solution, ie paying some of the seller's costs, is uncharted territory. So, you won't get the advice you want. 

If you are adding in significantly more cash into the purchase, your deposit will go up, and your interest rate ought to improve. (All other things being equal.) I do wonder why losing the current offer is so dreadful?

silvercar

You only get a formal mortgage offer when you have agreed a price on a particular property. Until then you only have a 'mortgage in principle'. You can't have made a full application without it being tied to a property. So I'm finding the broker claiming that you can't change the offer difficult to understand.

HouseHunter26

MultiFuelBurner said:

Do you mean cash under the mattress which can't be traced or more likely savings in a bank that can be accounted for under money laundering regulations?

If in a bank and accountable or even cash and accountable then that is all fine and above board.

The cash(savings) will have to be lodged with your solicitor for exchange.

The money is in the bank and can be easily accounted for