Loan for 100% mortgage contract deposit

D

Dave_Post

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I have recieved a loan offer for a 100% mortgage on a property which I placed a booking deposit on a couple of weeks back. I used a broker, but his responses to my questions dont fill me with confidence, so I'll post here.

Its a new apt, not due to be built till early next year. The contracts are due to be signed next week, and the contract deposit is due obviously. I have paid 1% already (booking deposit) so I need to pay 9% more (to make up 10% required for contract deposit) which I dont have - hence applying for the 100% mortgage in the first place. EBS dont give you the 10% up front like BoI apparently, so they were to have someone contact me with a view to getting a loan (via GE money), which I will pay off when drawing down the full amount on completion.

After much delay & dicking about, its transpires that they want me to supply all the usual info, payslips, salary statements etc for this loan, and thats its going to be another week turnaround, which puts me very near the limit of 3 weeks since my solicitor recieved the contract.

So, what I want to know is, can I just go to my own lender (and my partners), take out a pre-approved personal loan for the shortfall, and use that. Or will there be a further credit check on drawdown where EBS will see this and pull the plug?

Thanks for any advice. Its stressing me out no end.
 
Dave,

Go to ICS or PTSB immediately and apply for a mortgage with them. These two are the most competitive lenders for 100% mortgages and both give you 10% contract deposits (ICS at the most competitive rate amongst the lot). If you tell them you're in a hurry, they'll process your application really quickly. I wasn't in a hurry and had a response in about three days. If EBS is not providing you with good service, go somewhere else. Don't delay!
 
Thanks for the response. I dont think starting a new application 5 working days before the deadline for signing contracts is feasible. All my documentation is with EBS for a start.

Can anyone answer my query?
 
There would be no problem taking a personal loan for the deposit as long as it's repaid from the 100% on completion. As your mortgage has already been offered all the credit checks have been carried out and whilst in theory these could be repeated it would be unlikely - and given that the loan will be gone it still wouldn't be an issue. To be fair to the EBS they have only just started funding the 10% and - as with all the lenders who've gone down this route - it's taking a while to get their procedures in place.

Please let us know how you get on.

Sarah

www.rea.ie

ETA - just because the EBS have issued an offer you are under no obligation to take the mortgage from them when the house is ready. Keep an eye on the market and review your options approx. 8 weeks before completion to ensure you have the best possible deal at that time.
 
Yeah, that confirms what the mortgage broker and EBS customer service are saying. Thanks. Ive gone ahead with the personal loan from my own lender.

On the EBS thing, I think its a fairly big inconvenience not being able to draw down the 10% at contract stage, especially as a fair percentage of the target market for that product would be buying off plans as I am. Its kind of central to getting a 100% mortgage. My gripe is that it should have been made clearer to me by my broker and the EBS, and that I was expected to supply all the documentation over again to a third party to get the personal loan. Its an extra layer of hassle/stress a FTB doesnt need, I was lucky to be pre-approved by my own bank so I could sort out the personal loan quickly. People in my position reading this take note.

Btw, if I accept the loan offer now, can I put off drawing down for a year? Alternatively, does anyone know how long the loan offer is valid for?
 
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