Understanding Money with Eoin McGee
Mortgages Revisited: Answering your Questions
May 15, 2024
Antionette McGrath, a mortgage manager at Prosperous, returns to tackle listener questions about the mortgage landscape. They dive into the use of inherited funds as deposits and navigating banks' concerns. The discussion explains loan-to-value ratios and their effects on borrowing power. Antionette also clarifies mortgage options for those facing life changes like divorce. Finally, they explore innovative solutions for homebuyers struggling with finances, including how rent payments could help with deposits. A must-listen for aspiring homeowners!
31:54
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Quick takeaways
- Using inherited funds for a mortgage deposit is acceptable if all taxes are settled, simplifying access for first-time buyers.
- The borrowing potential varies significantly between first-time and second-time buyers, impacting overall mortgage terms and limits.
Deep dives
Understanding Mortgage Deposits
Using inherited funds as a deposit for a mortgage is generally accepted, provided that all applicable taxes on the inheritance have been settled. Banks mainly seek assurance that the borrower has a proven ability to repay the mortgage, which can be demonstrated through consistent rental payments or savings. While some banks may require that a portion of the deposit comes from the buyer’s own savings, many recognize that familial support is common, thus making it easier for first-time buyers to secure the necessary funding. Ultimately, as long as the buyer meets the 10% deposit criterion and proves their repayment capability, accessing mortgage funds should not pose a significant problem.
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