Loan for Girlfriend's Deposit

System

My idea was I will take a loan to pay the cards and a 3% deposit on the flat for her.

I hope you are not seriously considering this option.

roswell

her debt would then become your debt ..... id be very carefull

branney

ejones999 wrote:

She earns £13k per annum which at even 4 times salary means a max mortgage of £52k. (even 5 times would only give her £65k) What would this buy her - where I live a terraced house is in the mid eighties as are ex - council houses.

You really need to sit her down and point this out to her. She may not listen but IMO no responsible lender will give her anywhere near a 100% mortgage with her debt to salary ratio.

My own credit is shot as a guy didn't pay me back several thousand pounds a few years ago. I was assuming it would be worth getting a lower rate on the mortgage by doing it in her name only! (That was before we found out her credit score)

I don't know if I would get the loan, but since I was recently accepted for my first line of credit in 3 years (Vanquis) I thought it may be worth approaching my bank. They, after all, have evidence of my pay, the fact that I do not use my overdraft, and the fact I have not incurred any charges in the last 3 years.

We would probably re-mortgage into both names in about 3 years. Our combined income is £27,000 and I have no loans or other cards.

Even including the 6.4% interest on the 5 year personal loan, it would work out cheaper than the rent we are paying, and it would be an investment too. And she would be free from the credit card interest into the bargain!

jonesMUFCforever

You are deluding yourself I'm afraid!
You also chose not to answer parts of my post which are important.
The debt whether in your name or her name is still there and needs to be tackled before you embark on this.

The last paragraph is unbelievable - loan repayments + mortgage repayments + council tax + life assurance+ Home buildings and contents insurance+utility bills+ etc etc etc and this makes it cheaper than renting?
When something goes wrong in a rented property you ring up the letting agency or landlord and they put it right for you , you buy your own home and you are stuck to get on with it at your own cost!

branney

must admit, i forgot about life assurance, but already have contents insurance - i'm guessing buildings insurance won't cost much more than double that?

council tax will be the same or less (buying band A or , utilities less (we don't have double glazing in the rented property).

we furnished the flat we currently rent for free (check out http://groups.yahoo.com/group/glasgow-freecycle/) and to some extent this could apply to white goods if they break.

anyway, i know it looks stupid to most of you, but thanks for the advice all the same. good to get more viewpoints on it!

margaretclare

branney wrote:

anyway, i know it looks stupid to most of you, but thanks for the advice all the same. good to get more viewpoints on it!

It doesn't look 'stupid' to me.

What it does look, is highly dangerous.

Aunty Margaret

jockettuk

my boyfriend applied for his credit report a few yrs ago just before his application for a morgage.. as he lived at home he found anyone who had applied for any kind of credit from the same address was on his report and his brother was a waste of time were money was concerned.. we got worried it might stop him getting a morgage but it didnt.. turned out that my boyfriends credit was fantastic so more so they offered him above his average wage for a morgage.. on asking why so many other peoples debts on his report they said it was the address that the report was on, but my boyfriends credit was not affected by others on the report..

grumbler

ejones999 wrote:

... loan repayments + mortgage repayments + council tax + life assurance+ Home buildings and contents insurance+utility bills+ etc etc etc and this makes it cheaper than renting?

branney wrote:

must admit, i forgot about life assurance...

Just a note.
Life assurance is not a necessary part of a mortgage arrangment. You can either have it or not without any relation to you being a tenant or a homeowner.

ms_london

branney wrote:

oops, should have made myself more clear. the loan would be taken out by ME and given to her for the purposes of paying off her debt and a deposit!

then her credit will be better for the mortgage, yes?

we just got her credit score (£4.99 from Experian Credit Expert) and it is 555, which is listed as "Very poor". How can this be, when she has had credit cards for 3 years and not missed a payment? Is it due to the fact they are near the limits?

You could have got a free trial from Experian, or sent off for a copy by post - £2.50!!!

margaretclare

Hi Branney

Have a look at this: http://boards.fool.co.uk/Message.asp?mid=9839905&sort=whole#9840712

And do be careful.

Aunty Margaret