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Paying deposit on credit card
Polovski
Posts: 60 Forumite
I have seen a house for sale for £84,950
I know that in the current climate a deposit of 10% is going to be required in order to get a mortgage so basically £8500.
What i want to know is this - i have got a credit card (unused) with a credit limit of £6k and i could get my hands on the other 2500.
Can i pay a deposit on a house with a credit card - has anyone done this and does anyone have any advice on this?:beer:
I have worked out on an interest only mortgage at 5.4% i would be repaying £345, not sure what rate i could get though - maybe it would be higher though but i could afford up to £500 a month.
I know that in the current climate a deposit of 10% is going to be required in order to get a mortgage so basically £8500.
What i want to know is this - i have got a credit card (unused) with a credit limit of £6k and i could get my hands on the other 2500.
Can i pay a deposit on a house with a credit card - has anyone done this and does anyone have any advice on this?:beer:
I have worked out on an interest only mortgage at 5.4% i would be repaying £345, not sure what rate i could get though - maybe it would be higher though but i could afford up to £500 a month.
!
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Comments
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You will probably find that the bank looks at your other debt & takes that into account so you may not get anywhere with this plan.
even if you do, are you sure it's wise?"Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
my mortgage offer had a condition that I paid off my 1 and only credit card, even though I barely use the thing. I made sure it was clear at the time the exchange/completion happened. I suppose its to prevent people from using one form of borrowing to finance another. In the current climate, I can certainly understand people trying to find ways to get the deposit together.
Not entirely sure the bank would actually know, AFAIK there arent repeat credit checks at completion, just a bankruptcy check. someone will correct me if wrong... 0 -
I very much doubt a bank will allow this as you can't use debt to secure a lending agreement if you get me. The bank ask where the deposit it coming from and then this is taken upon completion of the sale-I think this is a very bad idea and I don't think you should do it. Don't you think everyone would be doing it to get on the property ladder if it was that easy-given the amount of credit floating around the UK???
Honestly take my advice and don't do it. You would not be able to get a personal loan for the circumstances you have explained as none of the major banks would allow it to my knowledge so please don't put yourself at risk-it could cause you great difficulty in the long run and then the minimum repayments on that much debt would be astronomicial-somewhere in the region of 2-5% which equates to £160 (2%) and £400 (5%)-even if you use interest free for XX amount of months as an arguement, you are going to have to pay in the end approx £300 a month to clear the debt within 5 yrs and if you target for 2 yrs-using 15.9% interest as a guidance, you're looking at £450 a month!
Now you see it in figures have I persuaded you not to make a big mistake???
Oh and lets not forget the Mortgage repayments and the Insurance for Life and Home & Contents.......could you afford everything because I know I couldn't!! You are looking at around £160-£200 for those policies also!!!
That's the Mortgage plus the CC plus the Insurances amounting to around £1000 a month!! And that's before you've paid bills and general living expenses-and if you want to save to do your home up or a nice holiday, how can you? And all this for never owning the home because you're opting for an Interest Only Mortgage!!
Please seek professional advice from a Qualified Mortgage Specialist before doing anything!Loan-£3600 only 24 months of payments to go!!!
All debt consolodated and cards destroyed!!
As D'Ream would sing 'Things.....can only get better'!!!0 -
Ummm.... sure. Put a few grand on your credit card at (typical 18%) interest. What could possibly go wrong![FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0 -
Ummm.... sure. Put a few grand on your credit card at (typical 18%) interest. What could possibly go wrong!
I hope that's sarcasm!! Surely no-one else can ignore the error of this type of decision!! And the risks!!Loan-£3600 only 24 months of payments to go!!!
All debt consolodated and cards destroyed!!
As D'Ream would sing 'Things.....can only get better'!!!0 -
I have seen a house for sale for £84,950
I know that in the current climate a deposit of 10% is going to be required in order to get a mortgage so basically £8500.
What i want to know is this - i have got a credit card (unused) with a credit limit of £6k and i could get my hands on the other 2500.
Can i pay a deposit on a house with a credit card - has anyone done this and does anyone have any advice on this?:beer:
I have worked out on an interest only mortgage at 5.4% i would be repaying £345, not sure what rate i could get though - maybe it would be higher though but i could afford up to £500 a month.
Hi Polovski,
If you borrow on mtge 90% & 10 % on high rate credit card then you are taking a 100% mtge....why bother??? If you are only taking Int Only then may as well rent as all you are doing is servicing the interest...you are not reducing capital.
If property price falls (as we are seeing currently) then you could easily find yourself in a negative equity situation overall (mtge & CC bill combined) . Lenders do not like to see deposit raised as further borrowings...better to show that your stake is coming from your own (existing) funds. Your offer of mtge could be revoked if the mtge co found out.
Scousebird is spot on...& as an ex mtge advisor I agree totally with her sentiments.
Hope helps,
Angel0 -
Scousebird wrote: »I hope that's sarcasm!! Surely no-one else can ignore the error of this type of decision!! And the risks!!
Nooo-ooo! I wasnt being sarcastic! :rolleyes:[FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0 -
cheers for replies - if i tell you a bit more about the situation it might help...
The house i have seen is a repo - it is at £30k under everything else on same estate.
I am selling a property due to divorce and should clear £20k on it - that will be mine so that is how i intend to repay the credit card debt - i know that the sale will take a while and that i stand the best chance of the new property if i have no chain - and i know i have to move fast on it to get it or it will go.
I really cannot see the price of houses on this estate dipping below the £85k asking price when stuff is still selling for £115k.
Does that change anything or does everyone still see this as a big no-no - advice much appreciated!0 -
It's fair enough if the lender will go for it. Discuss with your mortgage broker and fully declare what you're doing and why. No debts that are expected to last longer than a year isn't an uncommon condition and you'd satisfy that requirement with your plans.0
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edited out as my other post has now appeared lol!0
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