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Newbie: Using a Credit Card for deposit on a flat??

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  • rodent
    rodent Posts: 292 Forumite
    nobblyned wrote: »
    Times have changed, very risky these days. There are stories on here about mortgages being withdrawn between exchange and completion as a second credit search reveals the applicants' situation has adversely changed in the eyes of the bank. This can be very expensive.

    Possible event but highly unlikey due to the fact that most purchases xch and complete in one day ...one phone call even, so not really an issue !


    nobblyned wrote: »
    On application for the mortgage you will assure them of your financial position, including debt level. Should this change between decision in principle and purchase, and they find out, they have every right to withdraw the facility.

    Be warned.

    1.Unless a a second credit search is performed they are not going to find out.
    2.Even if a 2nd Credit search was performed chances are that CC wouldn't have updated bal to file anyway.
    3.I normally go from app to completion in 28 days max so careful timing with card app is fairly st forward.

    Again unlikely to be a problem! certainly not in my experience.

    The Rodent
    My posts are my opinion which is neither right nor wrong.
  • rodent
    rodent Posts: 292 Forumite
    KKevin wrote: »
    How did you manage to accumulate a portfolio using this method if you dont mind me asking, im sure now it will be more difficult though.

    As for my circumstances, ive no debit and currenlty have a good job that is paid well with a good credit rating. i have got 2 flats but aiming to get a third, as i need 25% for a buy to let, im looking at means of obtaining a bit of cash in advance to purchase a property, once ive got it up and runing would be able to clear the money borrowed over the course of 6 months or so.


    Very much more difficult !!

    I used cc 0% bt cash + equity from prop to put dep on next one then "created more eq with improvements and market gains, ripped that out and used more BT cash (a very intergral part of the equation as i had to also fund works and renovations etc!) I ran my Stoozpot at around 250K (all at 0%) for nearly 3 years ! now it is still running, but at the much lower level of approx 120K (still at 0%)
    B4 you ask me "how" just get yourself over to www.stoozing.com and have a good read around the site then check out the extremely dedicated forum !

    I bought first prop in 2000 and no. 32 in 2008 sometimes 1 at time sometimes 4 at a time !

    Right now there is plenty of cheap prop out there, but you need to get the financing right .....then you need to either flip it and take a profit or learn the art of becomming a Landlord.....it is a minefield either way right now and i am not really looking to buy just yet as prices as everything is waaaaaaaaaaaay to unstable ! (unless of course an armbreaking deal comes along!)

    The only other exception i would make is if you have a substantial amount of savings on a "shxte" rate ...with inflation you are losing money right now and i would convert those savings into a btl prop immediately and see +cash flow and triple the interest profits thru rental profits alone..Buy a prop with "intrinsic profit" either by getting it way below MV or thru improvements to protect your self from furter adverse price movements (which are enevitable for the next 18 mths or so minimum) Preferably both the above !

    The Rodent

    The Rodent
    My posts are my opinion which is neither right nor wrong.
  • rodent wrote: »
    Possible event but highly unlikey due to the fact that most purchases xch and complete in one day ...one phone call even, so not really an issue !





    1.Unless a a second credit search is performed they are not going to find out.
    2.Even if a 2nd Credit search was performed chances are that CC wouldn't have updated bal to file anyway.
    3.I normally go from app to completion in 28 days max so careful timing with card app is fairly st forward.

    Again unlikely to be a problem! certainly not in my experience.

    The Rodent

    The time frame in question isn't the period between exchange and completion, but between decision in principle and completion. Which for non-business buyers can be a few months, plenty of time for credit records to update and lenders to make second checks.

    For a private buyer this is a significant risk as the sums at risk are high. For a buyer with a portfolio of properties there is a good likelihood that the personal debt status of the applicant isn't as important as the cash flow from the business, so the lenders interest in your personal debt level will be minimal.

    My advice was to the OP; be warned that this is a risky strategy in the current climate.
  • KKevin_2
    KKevin_2 Posts: 35 Forumite
    Thanks for your advice everyone much appreciated.

    At this moment in time there are good properties on the market and im sure i can get a decent mortgage.

    What i plan to do is borrow the extra £5k from my old dears and apply for a Virgin card after the deal has went through and transfer the money to my old dears and manage the debt accordingly, i think that the way to go
  • rodent
    rodent Posts: 292 Forumite
    nobblyned wrote: »
    The time frame in question isn't the period between exchange and completion, but between decision in principle and completion. Which for non-business buyers can be a few months, plenty of time for credit records to update and lenders to make second checks.

    For a private buyer this is a significant risk as the sums at risk are high. For a buyer with a portfolio of properties there is a good likelihood that the personal debt status of the applicant isn't as important as the cash flow from the business, so the lenders interest in your personal debt level will be minimal.

    My advice was to the OP; be warned that this is a risky strategy in the current climate.

    OP stated BTL mort not resi !

    But using OP own idea of parents then BT AFTER completion is FOOLPROOF !!

    The Rodent
    My posts are my opinion which is neither right nor wrong.
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