100% Mortgages gone - other options?

jpowell79

Guys,
I'm looking to get onto the property ladder, but I have zero deposit, and realise 100% mortgages are a thing of the past. The only thing that makes my situation (slightly) different to many others in the same boat as me, is that I've now secured a very well paid job (50k+) so am wondering if I still have any options available.

I know some of you will say "If you're earning that much, just save up till you have a deposit", but it's not that simple. I've only just paid off all my credit cards (they had defaulted a couple of years ago when I was out of work) so hopefully they will show as settled within the next few weeks.
Essentially, I'm starting my next payday at the end of the month, in the clear. I reckon I'll be able to save somewhere between £2500-£3000 a month. This is great, but I'll still need to save up for 10 months to get a 10% deposit….and that's assuming I'd qualify for a 10%....in which case I'd have to get a 25% mortgage, which would mean probably saving for 2 and 1/2 years.

I have lived in central London all my life and all family and friends live here, so I don't want to move out to the middle of nowhere just to get a cheaper place……so I'm looking around the £250k mark for a 1-2 bed flat.
Rather than spend 1-2 years of rent, I'd rather buy now…but just can't figure out a way of doing it.

My parent's don't have any savings, so scan't borrow from them.
Was thinking maybe I could go to my bank, and take a £30k loan (over say 10 years), then use that as a deposit, and lump the loan and the mortgage together at a later stage…..is this feasible?

Is there any other options available to me?

Any help appreciated.

_Andy_

You can't use a loan as a deposit - no mortgage lender will accept it and you won't find a personal loan company that will lend for that purpose.

Mrs_Bumble

I am assuming that your credit file doesn't look brilliant because of the defaulted credit committment previously, you have only just paid them off by your own admission and so they will be there for sometime.

You don't have a deposit and as Andy quite rightly says above cannot and should not take out a loan to form your deposit.

Learn from past mistakes and put yourself in a really good position by sitting tight and putting a really good deposit together, shouldn't take too long if you are determined as you have cleared your credit committments and well paid job now so you should be able to get that put together in no time.

Get a copy of your credit file to see how bad that profile looks as you will need to know this for when you do have your deposit together as lenders don't like adverse of any kind so forewarned is forearmed.

Conrad

People do use loans, but they fib to thier lender saying it was parental gift. Not recommended though as this will put up your payments overall, and rates will rise.

Why the hurry? Just save 24 months. Tis what sensible types would do, honestly!

I was in London on Sunday - could'nt wait to escape. Honestly you don't know what your'e missing out here in the sticks!!

psoley

and even if you did manage to get a loan, the max you can get as a non home owner would be £25,000.

This would cost you about £11,000 in interest over the 10 years (8%)

Option 1 : Save £30,000 in about a year and make £1000 in interest
Option 2 : Pay £300 per month for the next 120 months paying £11,000 in interest

I know you said you didnt want to hear the just save replies, but it does seem a no brainer.... sorry for not being more helpfull, but I know what I would do.

Rafter

With the economy in the state it is in, house prices are going to be flat, or not outpace inflation for a few years. Given your credit history you would be so much better off saving a decent deposit and letting your credit file improve rather than paying over the odds for a mortgage now.

Everyone posting here is right.... sorry.

Batchy

you would be able to use the loan as a deposit, but they will reduce your affordability accordingly or ask you to pay it off anyway.

I think your problem will be affording a mortgage of that size on 50k income...

me and my gf would struggle to justify that and we would earn over 65k joint.

be careful dude... more important things in life than owning a house...

try a house share for a while... save some dollar... feels great :-)

Poppycat

Save save and save 50k shouldn't take too long to accrue plenty of wad wish I had even a 1/4 of that to live off

jpowell79

fair enough...thanks for the responses......it just annoys me to think I'll be spending close to £22,500 in RENT for the next two and a half years.....money down the drain...ah well, I guess I have no choice!

_Andy_

Batchy wrote: »

you would be able to use the loan as a deposit, but they

As already stated, no mortgage lender will accept a loan as a suitable source of deposit.

mitchaa

jpowell79 wrote: »

Guys,
I'm looking to get onto the property ladder, but I have zero deposit, and realise 100% mortgages are a thing of the past. The only thing that makes my situation (slightly) different to many others in the same boat as me, is that I've now secured a very well paid job (50k+) so am wondering if I still have any options available.

Essentially, I'm starting my next payday at the end of the month, in the clear. I reckon I'll be able to save somewhere between £2500-£3000 a month.

Please explain the maths behind this as a £50k pa salary is only £3000pm or £2800pm if making typical pension contributions.

If you can save £2500-£3000pm, what on earth are you living on? I realise you have put £50k+ but to me that means low £50k otherwise you'd put £55k+, £60k+ £65k+ etc etc