Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • savingfor
    • By savingfor 9th Jan 18, 9:34 PM
    • 3Posts
    • 1Thanks
    savingfor
    6K loan towards flat purchase
    • #1
    • 9th Jan 18, 9:34 PM
    6K loan towards flat purchase 9th Jan 18 at 9:34 PM
    Hello

    I am wondering what my chances are of getting a loan. It's unlikely, but is it a total non-starter?

    The background:

    I am finally in the fortunate position of being able to buy somewhere to live. It means moving to a new city. I have 50K in cash, and I am now saving for buying costs. In order to buy in a slightly less gritty area I think I need another 5 to 6K.

    However, I don't earn very much. I only have the 50K thanks to living with a parent for the last five years and saving 20K plus getting an inheritance. I have been very lucky. In addition, my credit history is not great, since I have defaults from a credit card from nearly six years ago when I was unemployed/in very erratic zero hours low paid work. I know there's six years before your credit history is clean again, but is that six years since paying off the debt or six years since the date of default? Because I paid off the debt about five years ago.

    I don't want to wait and save for another year. I really have put my life on hold for a long time and I'm not getting any younger. So if I can't get a loan I will just buy where I can. But I thought I might chance my arm at borrowing a small amount. Is it a total non-starter? Should I talk to my bank? I will need to leave my job to move, so that is a headache in itself. Ideally I would rent in the new city first, but that might preclude the loan. I do earn a small amount online as well, which I can continue to do, but that is just enough to cover my expenses while I move, pay rent on a room for a few months and look for a job.

    I'm guessing I can't get a mortgage for such a small amount and I'm not mortgage worthy anyway. I think I am willing to take the risk of paying back the loan, because I won't be paying rent or mortgage and the repayments will be a lot less than that. I will have to pay all bills on my own for the first time ever, and put money aside for maintenance etc. I know I'm probably just being greedy.
Page 1
    • zx81
    • By zx81 9th Jan 18, 9:38 PM
    • 14,813 Posts
    • 15,651 Thanks
    zx81
    • #2
    • 9th Jan 18, 9:38 PM
    • #2
    • 9th Jan 18, 9:38 PM
    Try an eligibility checker. Be aware that some lenders won't lend for property purchases, outside of secured loans.

    Accounts stay on your file for 6 years from default.
    • vacheron
    • By vacheron 10th Jan 18, 7:43 AM
    • 753 Posts
    • 666 Thanks
    vacheron
    • #3
    • 10th Jan 18, 7:43 AM
    • #3
    • 10th Jan 18, 7:43 AM
    It looks like you have to some degree, but make sure you go in to this with your eyes open.

    You say you've been living at home for 5 years and have saved £20K. That is a great achievement, don't get me wrong, however it suggests that you have had a disposable income to save of, on average, £77 per week.

    When you move out, do you think that £77 per week will be enough to cover all of your new utilities, food, decorating, insurance, council tax etc?

    Also, the the repayment of a £6K loan, even if taken over 10 years at a good interest rate will cost £15 per week, bringing your £77 down to £62.

    You may have been paying a lot of board, or had additional outgoings which you didn't need to cut back on when you were living at home, but it's just food for thought.
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • DCFC79
    • By DCFC79 10th Jan 18, 7:50 AM
    • 30,590 Posts
    • 19,346 Thanks
    DCFC79
    • #4
    • 10th Jan 18, 7:50 AM
    • #4
    • 10th Jan 18, 7:50 AM
    Have you checked your credit files ?

    You say you will also be changing jobs, have you found another job to go to ?

    Can I ask would you buy somewhere first, quit your job and look for another one ?

    Why not apply for jobs that are close to where you would like to live and then think about moving, why cant you stay where you are for work, is it the distance ?
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • MEM62
    • By MEM62 10th Jan 18, 11:11 AM
    • 1,411 Posts
    • 1,027 Thanks
    MEM62
    • #5
    • 10th Jan 18, 11:11 AM
    • #5
    • 10th Jan 18, 11:11 AM
    I'm not mortgage worthy anyway.
    Originally posted by savingfor
    Have you been informed of this by a broker or is that your own assumption?
    • ViolaLass
    • By ViolaLass 10th Jan 18, 11:45 AM
    • 5,205 Posts
    • 7,213 Thanks
    ViolaLass
    • #6
    • 10th Jan 18, 11:45 AM
    • #6
    • 10th Jan 18, 11:45 AM
    You want to buy a property for c£55k?

    I assume you've found something for that low a figure but have you checked whether there are maintenance fees e.g. leasehold/freehold?

    Could you earn more?

    Would it be worth using that money to retrain for another career or to step up in the one you're already in?
    • Herzlos
    • By Herzlos 10th Jan 18, 12:22 PM
    • 6,290 Posts
    • 5,679 Thanks
    Herzlos
    • #7
    • 10th Jan 18, 12:22 PM
    • #7
    • 10th Jan 18, 12:22 PM
    There's nothing against getting a mortgage for £6k. You'd need to ask around and see which lenders will do so, and may be worth checking with a broker.
    • ricky_v
    • By ricky_v 10th Jan 18, 1:04 PM
    • 270 Posts
    • 139 Thanks
    ricky_v
    • #8
    • 10th Jan 18, 1:04 PM
    • #8
    • 10th Jan 18, 1:04 PM
    Borrow the minimum amount on a mortgage and then use whatever is left of your cash to overpay the mortgage down to £6k. One or two mortgage lenders allows unlimited over payments during a fixed period for example.

    Only difference is that rate will most likely be lower and the loan is secured on your property.
    • PeacefulWaters
    • By PeacefulWaters 10th Jan 18, 1:17 PM
    • 7,516 Posts
    • 9,398 Thanks
    PeacefulWaters
    • #9
    • 10th Jan 18, 1:17 PM
    • #9
    • 10th Jan 18, 1:17 PM
    There's nothing against getting a mortgage for £6k. You'd need to ask around and see which lenders will do so, and may be worth checking with a broker.
    Originally posted by Herzlos
    Minimum mortgage amounts are usually far higher than £6k.
    • NineDeuce
    • By NineDeuce 10th Jan 18, 1:27 PM
    • 672 Posts
    • 572 Thanks
    NineDeuce
    How can you not find a decent flat in another city with a £50k deposit?
    • vacheron
    • By vacheron 10th Jan 18, 2:06 PM
    • 753 Posts
    • 666 Thanks
    vacheron
    How can you not find a decent flat in another city with a £50k deposit?
    Originally posted by NineDeuce
    I believe the OP wants to buy a place outright for 50K (or a slightly better place for 56K with the personal loan).
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • Tarambor
    • By Tarambor 10th Jan 18, 2:09 PM
    • 1,919 Posts
    • 1,370 Thanks
    Tarambor
    There's nothing against getting a mortgage for £6k.
    Originally posted by Herzlos
    Except that there's not a lender who'll give you a new mortgage for anything less than £25k.
    • NineDeuce
    • By NineDeuce 10th Jan 18, 2:24 PM
    • 672 Posts
    • 572 Thanks
    NineDeuce
    I believe the OP wants to buy a place outright for 50K (or a slightly better place for 56K with the personal loan).
    Originally posted by vacheron
    List of cities where you can buy a place for £50k please...
    • enthusiasticsaver
    • By enthusiasticsaver 10th Jan 18, 2:32 PM
    • 5,121 Posts
    • 9,772 Thanks
    enthusiasticsaver
    Whether you have £50k or £56k I am not sure you can buy anywhere without a mortgage on top of that. Have you looked at prices in your area?
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • vacheron
    • By vacheron 10th Jan 18, 3:11 PM
    • 753 Posts
    • 666 Thanks
    vacheron
    List of cities where you can buy a place for £50k please...
    Originally posted by NineDeuce
    I'm not sure why you are demanding I do your research for you, but ok.

    Also to highlight the OP's own post.
    I am finally in the fortunate position of being able to buy somewhere to live.

    It means moving to a new city
    .

    I have 50K in cash, and I am now saving for buying costs. In order to buy in a slightly less gritty area I think I need another 5 to 6K.

    I'm guessing I can't get a mortgage for such a small amount
    So they have 50K, are moving to a Gritty area and don't think they can get a mortgage.

    Did you read the same post as me?
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • NineDeuce
    • By NineDeuce 10th Jan 18, 3:30 PM
    • 672 Posts
    • 572 Thanks
    NineDeuce
    I'm not sure why you are demanding I do your research for you, but ok.
    Originally posted by vacheron
    So Middlesbrough... and thats it?

    Normally a list comprises more than one item.
    • vacheron
    • By vacheron 10th Jan 18, 3:44 PM
    • 753 Posts
    • 666 Thanks
    vacheron
    So Middlesbrough... and thats it?

    Normally a list comprises more than one item.
    Originally posted by NineDeuce
    So you've disregarded all the information I provided which supported my interpretation over yours to focus on making a pedantic point regarding what constitutes a list (information which I was under no obligation to provide you with in the first place!).



    Hovever if you insist,

    I'll look forward to you proudly informing me that some of the links are a year out of date.
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • NineDeuce
    • By NineDeuce 11th Jan 18, 10:06 AM
    • 672 Posts
    • 572 Thanks
    NineDeuce
    So you've disregarded all the information I provided which supported my interpretation over yours to focus on making a pedantic point regarding what constitutes a list (information which I was under no obligation to provide you with in the first place!).



    Hovever if you insist,

    I'll look forward to you proudly informing me that some of the links are a year out of date.
    Originally posted by vacheron
    No. I just get miffed by people who think they have a point by saying 'search for yourself'.

    Why do I have to make the effort to prove your point? If you had a point, you would know this already.

    So based on your advice, why dont you go on to Google and type 'how to enter a debate or discussion'.
    • vacheron
    • By vacheron 11th Jan 18, 11:08 AM
    • 753 Posts
    • 666 Thanks
    vacheron
    No. I just get miffed by people who think they have a point by saying 'search for yourself'.

    Why do I have to make the effort to prove your point? If you had a point, you would know this already.

    So based on your advice, why dont you go on to Google and type 'how to enter a debate or discussion'.
    Originally posted by NineDeuce
    Thank you for your suggestion however I feel I am capable of entering a debate or discussion, for example in post 3 where I provided some (hopefully) useful advice to the OP.

    You joined the discussion seven posts later with the perfectly understandable assumption that the 50K was their deposit. I politely advised in post 11 that I believed the £50K was their intended purchase price and not their deposit.

    For whatever reason since then you have decided that rather than accepting that you may have simply misunderstood the original post based on the evidence from the OP which I re-quoted in post 15, you would instead focus on demanding I provide evidence of house prices across the UK in order to disprove my assumption. Evidence which I have since provided.

    Until the OP returns and clarifies their situation we will remain at an impasse on this matter, so I will leave this thread for now and leave the other forum members to draw their own opinions.
    Last edited by vacheron; 11-01-2018 at 11:14 AM.
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • Tarambor
    • By Tarambor 11th Jan 18, 12:09 PM
    • 1,919 Posts
    • 1,370 Thanks
    Tarambor
    List of cities where you can buy a place for £50k please...
    Originally posted by NineDeuce
    Most of the M62 corridor, South Yorkshire, Lancashire, North West, North East, Liverpool, Stoke on Trent. You can buy houses in Hull from £30k.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

144Posts Today

1,947Users online

Martin's Twitter