Adding to deposit after applying for mortgage

R

rsynnott

Registered User
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Hi,
I've a question about mortgages. Suppose I apply for a mortgage of, say, 100,000, with a deposit of 20,000. I find a house I like at 130,000, and have an additional 10,000 in the bank. Can I at that point draw down the mortgage, and use the additional 10,000, or do I have to re-apply, adding the 10,000 onto the deposit? If the former, is that taken into account for LTV calculations (for products which have different rates based on LTV, etc.)?
 
Will you not already have told the bank you have 30k or are you hiding the 10K? For a house of 130K with 20% deposit you need 26K.

No you don't draw down the mortgage first. You bid on a house, you tell the bank how much it costs, and you see if they are agreeable to loan you the money, but first you must have an idea of your max budget and how much the bank will actually lend to you.
 
Bronte said:
Will you not already have told the bank you have 30k or are you hiding the 10K? For a house of 130K with 20% deposit you need 26K.

No you don't draw down the mortgage first. You bid on a house, you tell the bank how much it costs, and you see if they are agreeable to loan you the money, but first you must have an idea of your max budget and how much the bank will actually lend to you.
Click to expand...

Sorry, the numbers were purely for illustration. The bank knows I have the extra money; it's with them. What I was wondering about was whether it was possible to add to the deposit after approval in principle without reapplying. On applying you're asked how much you want to put towards the deposit over the minimum, I was wondering can that be changed after.
 
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You just have approval in principle. You will still have to formally apply for the mortgage & you can change the amount requested then. You are not bound in to the approval in principal figure.
 
Even with full approval you are not obliged to draw down the full amount of the loan. Should you decide to meet the house cost by including a higher level of own funds then this is your decision! Bank will have no objection to a lower draw-down
 
Should be a no brained for the bank. LTV is lower. If you're thinking of doing this then try get a better rate due to the extra equity.
 
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