Deposit question!

Hi, can someone please help. We have been approved for 100% mortgage of €330k we are bidding for a house for €350. When it is time to pay the 10% deposit can we use some of the 100% mortgage or do we have to pay this all ourselves! Thanks guys

The lender will release this amout for the deposit.

damien60 said:

Hi, can someone please help. We have been approved for 100% mortgage of €330k we are bidding for a house for €350. When it is time to pay the 10% deposit can we use some of the 100% mortgage or do we have to pay this all ourselves! Thanks guys

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if your only mortgage approved for 330k, how do u bid on 350k house then???

very obvious and relevant question!! and how will they release it for a deposit without eveidence of where the additional 20k is going to come from? also if you are bidding on it and its 350k how do you know it wont end up at 355k/360k etc.....

You should check with your lender. They won't release it from the mortgage, you have to apply for a term-loan, which will be cleared from the mortgage. Not all banks offer it, I know that BOI, PTSB, ICS do and that Bank of Scotland doesn't. Not sure about the rest. So ask your lender!
When your bid is the successful one, you have to put down a booking deposit (usually 5K), the contract deposit (10% of purchase price minus booking deposit) is usually due when you sign contracts. In some cases, a much smaller contract deposit is possible with the new 100% mortgages, but you have to discuss this with the EA and the solicitor.

Petal said:

You should check with your lender. They won't release it from the mortgage, you have to apply for a term-loan, which will be cleared from the mortgage.

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Some lenders DO release the 10% deposit as part of the mortgage, like with a stage payment. You should really give your lender a call and see whether or not they will do this, or even post their name and someone may be able to help you...

Sorry for not giving more info. We have just suceeded in getting this place. We have €24k saved which is short for what we need to pay the deposit etc. I just talked to my solicitors and broker today and they said not to worry about the 10% as venders usually accept a smaller deposit as we are 100% mortgage ftb's. Did anyone hear of this before?

I still don't understand. How are you 100% buyers when you are borrowing €330K and paying the balance of the €350K purchase price out of your own money? Surely the LTV (Loan To Value) ratio here is actually €330K/€350K x 100 = 94%?

damien60 said:

Sorry for not giving more info. We have just suceeded in getting this place. We have €24k saved which is short for what we need to pay the deposit etc. I just talked to my solicitors and broker today and they said not to worry about the 10% as venders usually accept a smaller deposit as we are 100% mortgage ftb's. Did anyone hear of this before?

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Yes, it's usually not a big deal, especially with the kind of figures you're talking about. I'd raise it with the vendors' solicitor fairly quickly though (and let them know how much you're in a position to offer as a contract deposit), just to avoid any nasty surprises further down the line.

would lenders release the 10% deposit if your not a first time buyer?

I am currently selling and buying. I should have approx 160k equity after the sale of my house. I need a deposit of 50k for the new house. I could scrap 20k together.....will my lender (BOI) allow me to use either the equity on my current property (which is being sold) or release some of the new mortgage?