Equity as deposit?

S

Sanparom

Registered User
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I'm sorry in advance for my naive question.

Judging by current market prices, we have 40k (give or take 5k) equity in our home. Do any banks accept this towards a deposit (along with savings)? It's just that we wouldn't have enough for a deposit with just our savings, but we would with the equity included. If this is possible, how does it work, would we have to have sale agreed on our house before being granted mortgage approval?

Once again, I'm sorry if this is a stupid question.
 
It's not a stupid question at all and has been asked before.

The lender will tell you the maximum amount they will lend you and the maximum Loan to Value. But it's only approval in principle. They will not give you the mortgage until your house is sold - there would be no point as you would not have enough to complete the sale.

Your solicitor will not let you sign a contract to buy a house, until you have signed a contract to sell your existing house.

So put your house on the market and see how you get on.

Brendan
 
Thanks for very, Brendan. I appreciate your help.

I've one more question, though. Would it be sufficient for house to have Sale Agreed on it before we could seriously look at buying another home or would it have to be Sold? I'm just thinking that in the latter instance, it wouldn't give us enough of a turnaround time and we'd probably have to rent for a few months. I'm sorry if this sounds confusing. I'm not even sure if I have it clear in my own head. It's a complicated process.
 
I have rang the bank with the same question and it is possible. I have been mortgage approved subject to my house being sold in time. after the sale (hopefully it ll happen) the existing mortgage will be paid off and the difference will go towards the new mortgage & fees.
 
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