Buying a house with a cash incentive

user1977

HouseHunter26 said:

user1977 said:

HouseHunter26 said:

silvercar said:

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.

I could've been clearer in my post - my mortgage is a formal offer on a particular property. I want to change property and it's going to be more expensive. This is why I would need to re-apply. I hope that clarifies my question better.

Then you'll need a new offer anyway.

But even if you didn't, no, you can't pretend the extra payment isn't really part of the price you're paying.

Thank you - I'm not looking to pretend, but my question might imply I am. What would I achieve by pretending? For my own learning, I'm trying to understand the why.

I interpreted your question as asking whether there's a legitimate way of "dressing up" the extra payment so it isn't construed as part of the price you're paying the vendor for the property.

HouseHunter26

eddddy said:

HouseHunter26 said:

Yes, exactly that. The different property is going to be more expensive and I don't want to change the mortgage, if possible.

Again, this doesn't sound right - and there would be no logic to it.

You seem to be saying -

• 1) You applied for a mortgage on a property and you got a mortgage offer.

• 2) You now want to apply for a mortgage on a different property

• 3) Your broker is saying that if the new property is exactly the same price as the old property, and you pay exactly the same deposit - you can keep the same rate as your previous offer

• 4) But if the price of the new property is higher, and you cover the difference with a larger deposit (but borrow the same amount as before) - you cannot keep the same rate as your previous offer

I would double-check both points 3 and 4 with your mortgage broker. (In my experience, if you apply for a new property, you lose the old rate. But maybe your lender has a special concession.)

Good summary! For point 3, I would only need to pay for a new valuation. I would like to avoid point 2 but it's necessary because of point 4.

MultiFuelBurner

Is this because your current mortgage offer is a better rate than you believe you can get now if your re-apply?

gwynlas

The mortgage offer is tied to the house as it provides the lender security for the loan needed wanting to buy a more expensive house means applying for a new mortgage. What amount you can afford for deposit might affect LTV and affordability and will require new offer at current rates.