Specific Question re: 100% mortgage

Hi,

I am looking at a few new properties in my area that will be launching soon. They require a booking deposit of 3k plus another 7k on signing of contracts (within 3 weeks). i dont expect properties to be ready for approx 6 months after that.

is it necessary to have mortgage approval at this stage?

if i was approved for a 100% mortgage - would the bank give me this booking deposit money now?

if so, how to they charge interest on this 10k loan over 6 months?

or is it a case that they will just refund you this amount when the deal is being finalised?

thanks for any help

Check the Indo's personal finance section online (free registration required) for some articles explaning how 100% mortgages work in relation to booking deposits etc.

Hello Bruze,

You would need to have mortgage approval before you sign any contracts, your solicitor will normally insist on it,

Re the deposit, at the moment some of the lenders offering 100% finance on your first home are offering you the deposits up front (paid through your solicitor) PTSb offer this as a term loan, and make it a condition of the mortgage that this is paid off when the mortgage cheque is issed to your solicitor, make sure you mention this when taking our the mortgage are it forms part of the mortgage offer.

Ulster bank and First Active offer the deposit ( again through your solicitor) as a stage payment, in other words it will be paid from the total amount you wish to borrow, again you need to make sure that you mention this at an early stage,

I hope this helps

Catherine


www.keatingfinancial.com

I've enquired about this with a couple of banks and it's good to know that they will give you that deposit upfront, but at a much higher interest rate. The cheapest I've come across was with ICS at 6%.