No deposit mortgage?

fuschia-sky

Is there any way to get a mortgage without a huge deposit? My boyfriend is 39 and earns £21,000 a year but is currently living in (fairly cheap) rented accomodation and has no savings. Is there any way he can get on the housing ladder or is he doomed to renting forever?! His thoughts on the situation are either a) taking out a loan as a deposit or b) living in a caravan for a year or so while he saves some money...

This is probably a silly question but it would help just to rule out the possibility of owning his own home!

Thanks

PasturesNew

You can't get a mortgage without a deposit
You can't borrow the deposit.

You say he's in cheap housing and earning £21k, why does he have no savings then?

He should start now and save hard for 2 years, then get a place once he has a deposit.

izools

Let me put it this way:

I was offered a 95% mortgage in 2007. I mentioned in jest on the phone to the bank "oh, well I'd better ash the in laws for a favour. Either that or get a loan out to pay the deposit!".

Fifteen minutes later I'd been transferred to Abbey's Loan department and been given a loan for the deposit. Half an hour later, I'd been approved for the mortgage.

A year later I was filing for bankruptcy at my local county court.

Now I'm renting a cheap flat. Pretty much gone full circle!

fuschia-sky

PasturesNew wrote: »

You say he's in cheap housing and earning £21k, why does he have no savings then?

Erm, because he's clearly a bit rubbish! Hence why I am asking this question and not him haha. I'm just trying to help him out by gathering a bit of advice

adiwood

Well back in 2007 I bought my flat on a 100% mortgage for 97k.

Overpaid during the 3 years fixed term, now over 93k and now can only move onto the variable rate but planning on paying hard now before interest rates climb again.

He should start saving. If he is paying £400 rent (as a guess) he could save £3-400 a month as long as he is careful with his spending.

_Andy_

No mortgage lender will accept a loan as a deposit.
As stated above without a deposit saved up he won't be able to purchase.

matttr6

Homebuy not an option for deposit??? Or one of the developer schemes???

tomthelondoner

The only thing that comes to my mind is a Homebuy Direct scheme - there is at least one lender out there that would offer a mortgage with no deposit on Homebuy Direct... A few more will need just 5% deposit of your share (as opposed to 5% of the purchase price), but offer you rates from 70% LTV range (or below if you have more deposit), rather that 95% LTV - massive difference in rates and fees.

Jez-_2

_Andy_ wrote: »

No mortgage lender will accept a loan as a deposit.
As stated above without a deposit saved up he won't be able to purchase.

Why do people keep mentioning this? While financially irresponsible this stated as fact is simply not true.

Lenders will happily approve people with unsecured loans - end of story. Whether the capital was used to purchase a new car, 10000 Big Mac's, or is indeed the source of your "savings" is immaterial.

_Andy_

OK try putting down 'personal loan' as a source of deposit for a mortgage lender and see if they approve it.

Jez-_2

_Andy_ wrote: »

OK try putting down 'personal loan' as a source of deposit for a mortgage lender and see if they approve it.

Irrelevant. Many stories on this very board, and the fact that lenders will happily approve people with unsecured loans with no detail of what that capital was used for is testament to the fact that you can quite happily do this.

Note i am not condoning this nor is it something i have done.