Deposit %?

thermal2844 · 14 May 2018 at 12:57PM

Is there a depost % threshold that makes acceptance more likely? For example, we could put down 20%, but 15% would be better for us in terms of having more spare savings to do some modernisation work on the house.

We are thinking of going through Halifax, and our situation is I am currently employed but starting at a new job at the beginning of June (permanent contract - 6 months probation), and my OH is self employed (two years of tax assessments).

Our credit is fine other than a lack of credit card history, but nothing adverse. My OH recently updated the electoral roll which will not be sent to the credit agencies until 1st of June, so that info is outdated (shows registration for our previous address). Mine is current. I'm not sure how much this affects things.

ACG · 14 May 2018 at 12:59PM

You can try it at 15% and then if declined try again with 20%?
Usually every 5% increases your chances of being accepted.

astal · 14 May 2018 at 2:06PM

Is there a deposit % threshold that makes acceptance more likely?

Any % more would make acceptance more likely.
There is no rule to have acceptance definite.
No rule that can be applied to all banks, not even a rule for the same banks, as all customers are different with different circumstances, income, house value, credit score etc.

Chances are, and experience says, that 15% deposit is very likely indeed to lead to acceptance, so the only thing you need to do is try it with a bank. In the unlikely event they will decline, increase it to 20%.

thermal2844 · 14 May 2018 at 2:39PM

Thank you both for your answers. So if we apply with 15%, and it is declined, we can then ask them if they would accept us with a 20% deposit? I guess I assumed it was either accept or decline, without any room for negotiating in this way.

foxy-stoat · 14 May 2018 at 4:01PM

Depends on why they declined you - affordability or adverse credit history.

thermal2844 · 14 May 2018 at 4:11PM

We have no adverse credit history so I suppose it would be affordability if it came to that, although we're fine on the calculations we've done so probably just worrying over nothing.

ACG · 14 May 2018 at 4:17PM

No application should be turned down for affordability. Lenders have affordability calculators so providing the information is entered correctly they should be accurate.

You could get turned down for not meeting the internal scoring requirements, but by dropping down to the next banding the lender may have different scoring requirements. We have a case which went to offer last month and the client wanted 66% LTV (give or take). It was declined, but we reduced the loan amount by around £3k, got it to fit at 65% LTV and it passed the credit check. He just left £3k on a loan he planned on clearing, it flew through affordability so that was never a problem.

He wins as we get him from an adverse lender to a high street lender with a rate that is now 3% less than he was paying give or take. As he is now miles better off each month, he can clear the loan in no time by overpaying.

Deposit %?

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