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  • FIRST POST
    • Celina4u
    • By Celina4u 17th Oct 16, 10:35 AM
    • 3Posts
    • 1Thanks
    Celina4u
    Can i Use an unsecured Loan as Deposit for a house?
    • #1
    • 17th Oct 16, 10:35 AM
    Can i Use an unsecured Loan as Deposit for a house? 17th Oct 16 at 10:35 AM
    Hello,
    Apologies if this has been discussed in another thread (i did search)

    I have a secured job with a house hold income of £100k a year, I have heard some lenders don't mind if you use a loan as long as you have a steady job and can pay off both the loan for the deposit and the mortgage
    I understand it's not smart having 2 loans but I have done the maths and can cover both loan and mortgage
    I have been renting for far too long and I have seen a new build in a perfect location
    I can save for the 5% for deposit, (help to buy) but it will take me another year

    I will like to know which lendors will provide a mortgage if my deposit is from an unsecured loan
    Thanks
Page 1
    • Pixie5740
    • By Pixie5740 17th Oct 16, 10:45 AM
    • 8,873 Posts
    • 11,889 Thanks
    Pixie5740
    • #2
    • 17th Oct 16, 10:45 AM
    • #2
    • 17th Oct 16, 10:45 AM
    1) This question would be better placed on the Mortgages & Endowments board.

    2) As a rule of thumb, the majority of mortgage lenders do not like/accept borrowed deposits.
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    • Oakdene
    • By Oakdene 17th Oct 16, 10:47 AM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #3
    • 17th Oct 16, 10:47 AM
    • #3
    • 17th Oct 16, 10:47 AM
    I doubt it as you will have to declare that the money is a loan from a bank & this will affect your affordability...
    • nic_c
    • By nic_c 17th Oct 16, 11:44 AM
    • 525 Posts
    • 345 Thanks
    nic_c
    • #4
    • 17th Oct 16, 11:44 AM
    • #4
    • 17th Oct 16, 11:44 AM
    It depends how soon after the loan you want the mortgage. You tend to need to give 3 months bank statements, so if your balance goes up because of the loan, then its obvious where your deposit has come from. Longer than this and technically the loan could have been for something else and you had the deposit already

    As has been said, some lenders don't like deposits funded by loans. You will have to take loan repayments into account on affordability calculators - its not whether you believe you can afford to service both loans but whether the mortgage company does and they use National Statistics living expenses.
    • Celina4u
    • By Celina4u 17th Oct 16, 1:12 PM
    • 3 Posts
    • 1 Thanks
    Celina4u
    • #5
    • 17th Oct 16, 1:12 PM
    • #5
    • 17th Oct 16, 1:12 PM
    Many thanks for the comments so far
    I spoke to an advisor who said there are some lenders out there that wont mind if the deposit is loaned but they are not the cheapest, i guess my last option is to get a family member to 'gift' that amount and after a month or so of moving in, I can then take a loan to repay that.
    I dont know if this is illegal or frowned upon, as mentioned - i can cover both loans
    • Oakdene
    • By Oakdene 17th Oct 16, 1:16 PM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #6
    • 17th Oct 16, 1:16 PM
    • #6
    • 17th Oct 16, 1:16 PM
    Many thanks for the comments so far
    I spoke to an advisor who said there are some lenders out there that wont mind if the deposit is loaned but they are not the cheapest, i guess my last option is to get a family member to 'gift' that amount and after a month or so of moving in, I can then take a loan to repay that.
    I dont know if this is illegal or frowned upon, as mentioned - i can cover both loans
    Originally posted by Celina4u
    You may need to get said family member to write a letter saying the money is in fact a gift & is not repayable.
    • Celina4u
    • By Celina4u 17th Oct 16, 2:34 PM
    • 3 Posts
    • 1 Thanks
    Celina4u
    • #7
    • 17th Oct 16, 2:34 PM
    • #7
    • 17th Oct 16, 2:34 PM
    @Oakdene, not wanting to complicate things but if i cant get the full amount from Family and a non family member is willing to give the full amount, can I still classify that as a gift? or does gift have to be a family member?
    • Oakdene
    • By Oakdene 17th Oct 16, 2:36 PM
    • 502 Posts
    • 678 Thanks
    Oakdene
    • #8
    • 17th Oct 16, 2:36 PM
    • #8
    • 17th Oct 16, 2:36 PM
    @Oakdene, not wanting to complicate things but if i cant get the full amount from Family and a non family member is willing to give the full amount, can I still classify that as a gift? or does gift have to be a family member?
    Originally posted by Celina4u
    They would be classified as a gifts if you got a letter from each source making up the total amount stating that they are gifts & are not repayable in any way. Basically your mortgage company needs to be reasonably sure that you're not going to be paying the money back each month to them as this affects your affordability.
    • CLAPTON
    • By CLAPTON 17th Oct 16, 2:48 PM
    • 40,930 Posts
    • 29,690 Thanks
    CLAPTON
    • #9
    • 17th Oct 16, 2:48 PM
    • #9
    • 17th Oct 16, 2:48 PM
    Many thanks for the comments so far
    I spoke to an advisor who said there are some lenders out there that wont mind if the deposit is loaned but they are not the cheapest, i guess my last option is to get a family member to 'gift' that amount and after a month or so of moving in, I can then take a loan to repay that.
    I dont know if this is illegal or frowned upon, as mentioned - i can cover both loans
    Originally posted by Celina4u
    it is clearly fraud, as you are obtaining a mortgage under false pretenses
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    • Gambler101
    • By Gambler101 17th Oct 16, 4:34 PM
    • 65 Posts
    • 126 Thanks
    Gambler101
    I would do an honest and realistic income and expenditure, just to make sure that you are not going to over commit and run into financial problems down the line.

    Use the template from the "debt free wannabe" board, just to reassure yourself that what you are taking on wont end in a disaster. No need to post it (unless you want to), but as its the biggest financial commitment you are ever likely to make, you need to make sure its affordable
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    • GingerBob
    • By GingerBob 17th Oct 16, 9:25 PM
    • 3,058 Posts
    • 1,291 Thanks
    GingerBob
    it is clearly fraud, as you are obtaining a mortgage under false pretenses
    Originally posted by CLAPTON

    But I bet not many (e.g. none) people have been prosecuted for it.
    • CLAPTON
    • By CLAPTON 17th Oct 16, 10:44 PM
    • 40,930 Posts
    • 29,690 Thanks
    CLAPTON
    But I bet not many (e.g. none) people have been prosecuted for it.
    Originally posted by GingerBob
    the question was asked whether it was legal : it is not

    however if the potential lender found out, they may put a cifas fraud marker on his credit files which would do enomous difficulty

    but you probably know how many people that happens to
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    cloths 11.4%
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