Mortgage deposit or Loan?

Miss_Money_5

Hello All,

Urgently in need of some advice! I am new to this thing so sorry if i have posted this message in the wrong place!

I'm in the process of buying a new car but am not sure whether i should get out a loan to finance this or use the money i have saved for a deposit to buy a house. My concern is that in order to get a competitive mortgage as a first time buyer, i will need a decent deposit to start with. Although i will be able to afford the loan repayments, does it make sense to use the money that i have or get out a loan with best APR and keep the deposit money put aside just in case i decide to make an offer on a house.

HELP!!!!

hoggums

Use your money to buy the car and save up again putting the money you would have paid on the loan into your saving account. You'll be much wealthier in the long run this way. Don't worry - there's plenty of time to save - house prices aren't going to bottom out any time soon.

You also have to think about your future mortgage - if you are paying off the car loan at the time of applying for the mortgage this will reduce the amount you can borrow by a value much greater than the car loan itself.

rx8al

Dependent on the deposit size you have, it could make sense taking out a personal loan or using the savings, or a bit of both. You will only generally get a better mortgage deal if you have 25% or over, anything less than that, and you may as well put 10% down. In terms of what hoggums said on buying, no-one knows when the market will bottom out, my advise to you is if you can afford the mortgage and the loan, keep an eye out for the right property for you and snap it up when you can. Just speak to a mortgage broker to ensure that the monthly payments on the loan will still mean you can get the mortgage you would want to, when you want to buy.

Miss_Money_5

Decisions Decisions... have £10k saved for deposit and need £5k for car.... am i taking risk withdrawing it out of my saving bearing in mind it could take me some time to make up that extra £5k and the market could significantly change in the meantime... poss for the worse!

CLAPTON

plenty of decent reliable cars for about 2k