Banks looking for savings but we used them

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usteb1

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Hi,
Last year we decided we need bigger house. We had loan in credit union so we borrowed money from uncle to cover it and give back when we'll buy a house. But corona came in and decided to give money back to uncle in january. Banks are looking for 6 months bank statements and savings statements. Now we saw a house of our dream and afraid that it will be gone by end of July. So just wondering if we'll go now would bank not say that we can't save the money. We tried last year and bank told that our mortgage is smaller than the second one will be so we need to put into savings what will second one be. But now there won't be 6 months in the savings account.
 
usteb1 said:
Hi,
Last year we decided we need bigger house. We had loan in credit union so we borrowed money from uncle to cover it and give back when we'll buy a house. But corona came in and decided to give money back to uncle in january. Banks are looking for 6 months bank statements and savings statements. Now we saw a house of our dream and afraid that it will be gone by end of July. So just wondering if we'll go now would bank not say that we can't save the money. We tried last year and bank told that our mortgage is smaller than the second one will be so we need to put into savings what will second one be. But now there won't be 6 months in the savings account.
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Forget about the savings statements. Do you have savings equivalent to 20% of the market value of the house you want to buy?
 
Yes but the bank said we need a proof that we can pay double of what we're paying now. This is where we need our savings.
 
I would say be careful about overextending yourselves luckily you were in a position to pay back your uncle his money when things went wrong,
How about doing a money makeover on this site,
Where I worked in the last crash a lot of very good people had overextended themselves and had to default on their loans both the banks and their own health suffered not to mention the pressure it put their close families under,
 
usteb1 said:
Yes but the bank said we need a proof that we can pay double of what we're paying now. This is where we need our savings.
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Were the savings your money or money ye had on deposit belonging to someone else,
If it is the latter just think there may be more people at the same thing as you and it may not end well,
 
Well we're trying to go in on our budget. Our mortgage is 600 at the moment . And we're looking into a mortgage in around 1000-1200. We're family with 4 kids in 3 bed house of 84m2, and is getting tight
 
kinnjohn said:
Were the savings your money or money ye had on deposit belonging to someone else,
If it is the latter just think there may be more people at the same thing as you and it may not end well,
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Uncle's money cleared credit unions loan in 2020 july. And we started to put money into savings since then. By January we saved up to give back to uncle and some left and continuing till now to save. So teoreticly not visible where is the money
 
just be careful not to overextend yourselves, I can see from your first post how you repaid your uncle once the pressure came on which says a lot about you both, just think the pressure both of you would be under if you could not pay it back,
 
The pressure was that we wanted the house quick. And with the loan there was no chance to get mortgage. That's why we borrowed money. We have a house but small, my sister is looking for one as well and last year they showed us the house and we loved it so we wanted it very quick that's what pushed us to borrow money. We are able to pay around 1000-1200 and still have some savings
 
usteb1 said:
Uncle's money cleared credit unions loan in 2020 july. And we started to put money into savings since then. By January we saved up to give back to uncle and some left and continuing till now to save. So teoreticly not visible where is the money
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You should do a money makeover on this site lots of good advice on here,
As I see it you have now only cleared your debts and started saving a deposit,

I can see what you were trying to do getting uncle to clear existing debts so they would not be on the books so to speak,

Can only work if uncle did not mind waiting to be repaid when you are in a position to repay without putting yourselves under pressure,
I hope all works out for you and your family,
money makeover is the way to go,
 
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So you don't have 6 months continuous evidence of saving of 1000-1200 per month but can you demonstrate it for 4/5 months? What about over the last 12 months? It sounds like you should be able to show a steady savings pattern. A bank shouldn't mind the occasional dip into savings - especially if you're using it to pay down debt.

Once you've got your 20% deposit (either in savings or in existing equity) the 6 months statements are to show you can repay the monthly repayments given the typical income/expenses. The fact you paid off a loan shouldn't count against you in that regard. You can argue its an exceptional expense.
 
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kinnjohn said:
You should do a money makeover on this site lots of good advice on here,
As I see it you have now only cleared your debts and started saving a deposit,

I can see what you were trying to do getting uncle to clear existing debts so they would not be on the books so to speak,

Can only work if uncle did not mind waiting to be repaid when you are in a position to repay without putting yourselves under pressure,
I hope all works out for you and your family,
money makeover is the way to go,
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What do you mean money makeover?
 
skrooge said:
So you don't have 6 months continuous evidence of saving of 1000-1200 per month but can you demonstrate it for 4/5 months? What about over the last 12 months? It sounds like you should be able to show a steady savings pattern. A bank shouldn't mind the occasional dip into savings - especially if you're using it to pay down debt.

Once you've got your 20% deposit (either in savings or in existing equity) the 6 months statements are to show you can repay the monthly repayments given the typical income/expenses. The fact you paid off a loan shouldn't count against you in that regard. You can argue its an exceptional expense.
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We have started savings in the pandemic in june 1200 a month but took few thousands at the end of January this year. So just wondering would the bank still classify as an eligible customer who can rapay mortgage at 1200 per month even if i took money from saving but it doesn't say anywhere that this is for debt. Or better wait another two months and hope there will be same house or the other house that suits us. Because when we tried to apply in august last year bank told that we need at least 6 months of savings at least to make 1200 a month proof to match new mortgage.
 
skrooge said:
So you don't have 6 months continuous evidence of saving of 1000-1200 per month but can you demonstrate it for 4/5 months? What about over the last 12 months? It sounds like you should be able to show a steady savings pattern. A bank shouldn't mind the occasional dip into savings - especially if you're using it to pay down debt.

Once you've got your 20% deposit (either in savings or in existing equity) the 6 months statements are to show you can repay the monthly repayments given the typical income/expenses. The fact you paid off a loan shouldn't count against you in that regard. You can argue its an exceptional expense.
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Yes we dont have 6 months continued saving but we can show 5 months savings, so it will be a year in end of june since we put savings in and never stopped. We just took 9000€ amount from savings and continuing saving.
 
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You have been saving for nearly a year with one large payment. Your dream house is available. I don't see any harm in applying now.

You'll have to explain your approach to the loan repayment but I would focus on the fact you've repaid a loan and saved interest in the process.

You are also not limited to just than one mortgage provider. Even if it's not your preferred lender having any loan approval will help progress the purchase. The process of purchasing will take time. Worst comes to worst you reapply to your preferred lender in a couple of months before you complete the transaction.
 
skrooge said:
You have been saving for nearly a year with one large payment. Your dream house is available. I don't see any harm in applying now.

You'll have to explain your approach to the loan repayment but I would focus on the fact you've repaid a loan and saved interest in the process.

You are also not limited to just than one mortgage provider. Even if it's not your preferred lender having any loan approval will help progress the purchase. The process of purchasing will take time. Worst comes to worst you reapply to your preferred lender in a couple of months before you complete the transaction.
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Thank you
 
Do you like where you are living? Could you convert the attic and extend? would this give you the additional space you need without having to move
 
niceoneted said:
Do you like where you are living? Could you convert the attic and extend? would this give you the additional space you need without having to move
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Actually we do like our area but we want to try first with bigger house, if not then we can do some extra space in our house.
 
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