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If you want to mention some real figures - property price, mortgage value, savings - we can use those.
The house is on for 120k-125k, I've got 15k in an LISA and 5k elsewhere (4 of which will go into the LISA come April) so then I'll have 21k saved with the 1k government bonus.
My MIP is saying I can borrow up to 94k on my own so if I took a 94k mortgage and my 21k deposit and offered 120k (for example), I'd be still 5k short.
I want to know if I can stick an offer in for what I think it's worth and make up the extra deposit required before completion.0 -
You need to ask your mortgage lender.
Some require you to provide evidence of deposit at application stage, others don't.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »You need to ask your mortgage lender.
Some require you to provide evidence of deposit at application stage, others don't.
How would I do that if I've only got a MIP from L&C?0 -
If you offer £200k on a house, and the offer is accepted, the estate agent will probably immediately ask to see:
- A mortgage 'agreement in principle' for £180k
- A bank statement showing £20k savings
The estate agent wants to check that you are not a time-waster, with no mortgage and/or no savings.
EA asked - but that's just one of the times where I found the broker invaluable so far as I just gave the EA his number...
Broker confirmed I had the required funds to meet my offer - but refused to go into specifics as it's not the EA's business to see personal bank statements.The house is on for 120k-125k, I've got 15k in an LISA and 5k elsewhere (4 of which will go into the LISA come April) so then I'll have 21k saved with the 1k government bonus.
My MIP is saying I can borrow up to 94k on my own so if I took a 94k mortgage and my 21k deposit and offered 120k (for example), I'd be still 5k short.
I want to know if I can stick an offer in for what I think it's worth and make up the extra deposit required before completion.
Warning - if you're making an offer now then you could well be completing before your LISA bonus comes through!
If you pay in on the 6th April, they apply for the bonus the 5th of the following month and - and pay it 15 days after the 20th of that month... so around the first week of June; plus a solicitor generally needs 30 days notice to withdraw funds - meaning it could even be as late as the first week of July.
As a ftb - if you're buying an empty property/no chain - you could be completing by Easter.
For example:
https://www.skipton.co.uk/savings/isas/lifetime-isa/faqsWhen will the government bonus be paid to my account?
HMRC will calculate bonus payments for your Lifetime ISA on a month-by-month basis. Your bonus is calculated on any payments you make into your account from the 6th of the month to the 5th of the following month. Your bonus will be paid into your account within 14 days of the 20th of month two.
The day we receive payment from HMRC, we pay it directly into your account, so you don’t lose any interest.How would I do that if I've only got a MIP from L&C?
You could phone them/book an appointment to speak to their mortgage advisor?
I've got a broker - he's going to cost me £600 all in, but so far he's worth every penny keeping track of everything like this.
That said - you do know for completion you're also going to have to find money for your solicitor, survey and the arrangement fee for the mortgage - plus building insurance, actual moving costs and your first months mortgage payment?
You're talking maybe another £2/3k, some of which you need before exchange and some very close after completing.That sounds like a classic case of premature extrapolation.
House Bought July 2020 - 19 years 0 months remaining on term
Next Step: Bathroom renovation booked for January 2021
Goal: Keep the bigger picture in mind...0 -
I want to know if I can stick an offer in for what I think it's worth and make up the extra deposit required before completion.
There's no law saying you can't.
But a lot of estate agents and sellers will see you as a very high risk buyer.
As you can imagine, lots of people say..."I want to buy your house. I haven't got enough money now, but I'll have enough money in 6 weeks time. Honest Guv!"
And then in 6 weeks time, they still don't have enough money.
I suspect of lot of sellers will essentially say "I'm not going to take the property off the market, until you can show that you've got enough money to buy it".EA asked - but that's just one of the times where I found the broker invaluable so far as I just gave the EA his number...
Broker confirmed I had the required funds to meet my offer - but refused to go into specifics as it's not the EA's business to see personal bank statements.
Yep - if you've got enough money to buy the property, the mortgage broker might be happy to confirm that.
But I doubt that the mortgage broker would lie, and say that you've got enough money when you haven't.
So that doesn't really help the OP.0 -
Yep - if you've got enough money to buy the property, the mortgage broker might be happy to confirm that.
But I doubt that the mortgage broker would lie, and say that you've got enough money when you haven't.
So that doesn't really help the OP.
If the OP is intending to use their 20/21 LISA bonus - and if the timings work out to allow that to happen - then it's not exactly as if that's a high risk proposition... I was intending to do the same until I ended up unexpectedly finding a property I liked three months early.
As for my situation - you'd be correct... aside from the fact I don't have my 26% as yet - allowing that I do have the amount but 2k is segregated away for the deposit for fees/expenses and £5k for immediate renovation work required on the property - and my broker hasn't seen any proof of my deposit because its in a LISA and ISA and he's only seen bank statements and payslips...
I've told him I've got X and will have X+Y by the expected exchange date based on regular saving from salary. The most he could have seen would be from my statements showing I have a history of saving a minimum of the required amount each month.
He applied for the AIP based on what I said I'd put down when needed - all he said to the EA was that I'd secured and AIP for the required mortgage to support my offer... which is not a lie and may well be pertinent to the OPs situation.
That sounds like a classic case of premature extrapolation.
House Bought July 2020 - 19 years 0 months remaining on term
Next Step: Bathroom renovation booked for January 2021
Goal: Keep the bigger picture in mind...0 -
You don't need to have the money in your account until just before exchange.
The sale deposit is paid by the seller's solicitor to the buyer's solicitors upon exchange of contracts. The buyer's solicitor holds that money in a designated account until completion. This is usually 10% of the purchase price. This has absolutely nothing to do with the mortgage deposit.
The remaining 90% of the purchase price is paid by the seller's solicitor to the buyer's solicitors on completion. This could be a combination of the mortgage lender's funds and your own funds.
Some estate agents may ask to see "proof of deposit", but you can tell them to jog on, showing the EA a mortgage in principle should be more than enough.0 -
Sorry if I’m missing something, but if you already have £15k in a LISA, won’t your bonus be much more than £1k?0
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Sorry if I’m missing something, but if you already have £15k in a LISA, won’t your bonus be much more than £1k?
You can only pay in £4k a year then get £1k 'top-up'
£15k means three years of paying in £4k - add the £4k the OP has said they have in reserve and the Government will top it up to a total of £20kThat sounds like a classic case of premature extrapolation.
House Bought July 2020 - 19 years 0 months remaining on term
Next Step: Bathroom renovation booked for January 2021
Goal: Keep the bigger picture in mind...0
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