Mortgage Approval

Adoolan85

Hi all,

We have just got full mortgage approval to buy our first home.

In the approval letter the maximum purchase price is stated as €290k, having advised the bank this would be the region at which we would be looking to buy during the application process.

We have found a house we want buy with the current highest bid being €292k.

The estate agent who is a personal friend has advised that a bid of €295k would most likely be accepted by the seller.

My question is, where do we stand on drawing down the mortgage in relation to a bid being €5k above the banks maximum purchase price?

We would obviously be devastated to miss out on the house over an extra €5k, which we could cover ourselves before draw down.

Any advice would be greatly appreciated.

Thanks, Adam.

Pac2015

Adoolan85 wrote: »

Hi all,

We have just got full mortgage approval to buy our first home.

In the approval letter the maximum purchase price is stated as €290k, having advised the bank this would be the region at which we would be looking to buy during the application process.

We have found a house we want buy with the current highest bid being €292k.

The estate agent who is a personal friend has advised that a bid of €295k would most likely be accepted by the seller.

My question is, where do we stand on drawing down the mortgage in relation to a bid being €5k above the banks maximum purchase price?

We would obviously be devastated to miss out on the house over an extra €5k, which we could cover ourselves before draw down.

Any advice would be greatly appreciated.

Thanks, Adam.

Contact the bank and ask them what is the situation with getting an extra 5k if you go sale agreed on a property if they refuse then as you say you can come up with it yourself so just do that.
The banks can only say yes or no we are not giving you the extra 5k but they wont revoke the mortgage agreement so just bid on the house if you feel you can afford it.

MarkAnthony

I don't understand - the mortgage is the maximum loan.

If a bank will lend 200,000 and you have a deposit of 100,000 you can buy a €300,000 property. If you need €305,000 you just add €5000 to the deposit (if you can).

Adoolan85

MarkAnthony wrote: »

I don't understand - the mortgage is the maximum loan.

If a bank will lend 200,000 and you have a deposit of 100,000 you can buy a €300,000 property. If you need €305,000 you just add €5000 to the deposit (if you can).

I would hope this would be the case, seems a no brainer but the Mortgage approval letter states that the loan is subject amongst other things to 'A maximum purchase price' of €290,000.

Just thought I'd ask the question before bidding in case I was tripping over some red tape.

MarkAnthony

Adoolan85 wrote: »

I would hope this would be the case, seems a no brainer but the Mortgage approval letter states that the loan is subject amongst other things to 'A maximum purchase price' of €290,000.

Just thought I'd ask the question before bidding in case I was tripping over some red tape.

Perhaps I'm wrong then. I was with KBC and they were very flexible, I suppose it's not beyond the realms of possibility that a bank would set a maximum price knowing what funds you have, to stop money magicly appearing (credit union loans).

Worth giving them a quick bell.

Hope you get the house!

Lucy B

We are in the same situation. The house we are buying is more than the "maximum purchase price" on approval letter. All we had to do was bring in statements to our bank to show that we had enough money to bid at the higher price. Once bank see you can afford it, they give the green light. It's no problem.

farrerg

MarkAnthony wrote: »

I don't understand - the mortgage is the maximum loan.

If a bank will lend 200,000 and you have a deposit of 100,000 you can buy a €300,000 property. If you need €305,000 you just add €5000 to the deposit (if you can).

You just need to be able to show that you have the funds for the extra deposit, they won't issue the loan offer until they see proof you have the full deposit