Mortgage application without full deposit

Cona

hi folks
Looking for some help. I don't have the full 10% deposit saved just yet. I am probably about 3 months away from having the full amount.

Now the perfect house that we want has come available so I am wondering the following:

- can I apply for the mortgage right now and get principle approval without having the full 10% yet? Ie have approval so that we can make an offer?

Trish56

Hi Cona,
If you make an application for a mortgage you will need to show the lender where you are getting the balance of 10% from. Can you get a gift from parents to make up the difference.

Trish

NewCorkLad

No bank will give you approval on a loan without the 10%. You will also need to show that you have additional funds needed to pay for solicior fees, stamp duty etc. Could you get a loan from someone to cover the additional amount

homer911

10%?? I thought the new rules had kicked in - ie 20%

Trish56

homer911 wrote: »

10%?? I thought the new rules had kicked in - ie 20%

10% for 1st time buyers on a purchase price up to 220k. Also loan to Income is now 3.5 times gross income.

Cona

Thanks for the replies. I could get a loan of the rest but I might just hang on and save it myself.

Is it worth talking to a bank about the whole process or just wait til I have the 10% before starting the conversation?

Trish56

Cona wrote: »

Thanks for the replies. I could get a loan of the rest but I might just hang on and save it myself.

Is it worth talking to a bank about the whole process or just wait til I have the 10% before starting the conversation?

I would advice you to save the deposit and then apply. Lenders will be looking for evidence of your income such as P60 for 2014, 3 months payslips and a certificate of income completed by your employer.

It is also very important to show regular monthly savings over a 6 month period and if you pay rent to make sure that you pay same by bank transfer or standing order. Keep your current account in order as in don't use an overdraft, no referral fees or unpaid direct debits and clear your credit card monthly.

NewCorkLad

Cona wrote: »

Thanks for the replies. I could get a loan of the rest but I might just hang on and save it myself.

Is it worth talking to a bank about the whole process or just wait til I have the 10% before starting the conversation?

You will need to show that you have around 13% of the purchase price of the house, to cover the 10% deposit and other fees and charges

Trish56

NewCorkLad wrote: »

You will need to show that you have around 13% of the purchase price of the house, to cover the 10% deposit and other fees and charges

In my experience the majority of lenders do not ask for proof or stamp duty and legal fees when applying for a mortgage. Stamp duty is 1% and legal fees are circa €2200 which many people have saved by the time the mortgage is approved and issued. You just have to show that you have the 10% deposit.

NewCorkLad

Trish56 wrote: »

In my experience the majority of lenders do not ask for proof or stamp duty and legal fees when applying for a mortgage. Stamp duty is 1% and legal fees are circa €2200 which many people have saved by the time the mortgage is approved and issued. You just have to show that you have the 10% deposit.

Just bought a house and bank insisted on proof of additional funds needed to meet other costs.

Trish56

NewCorkLad wrote: »

Just bought a house and bank insisted on proof of additional funds needed to meet other costs.

Interesting....do you mind me asking who the lender is??

NewCorkLad

BOI, its not a bad idea alot of buyers wouldnt think about the additional costs and could then be under pressure to pay the first few mortgage payments.