Shall I get a loan for my deposit?

brasso

I agree that it's normally better to own than to rent, but I wouldn't want to borrow for a deposit, particularly at the moment, when house prices are wobbling.

If you did wait 12 months to save your deposit you may well find that prices are lower.

Baby_A

AndrewSmith wrote:

I
Post some rough figures to give an idea of exactly the numbers involved.

Andy

Ok what figures do you I need to post?

My salary - £22000
Husband - 16000 guaranteed basic plus comission which fluctuates. Last years earnings were £35000.
Occasional mystery shopper - £100 a month
Curent rent is - £758.33
Credit Cards - outstanding to be cleared next month.
looking for home in SW london (which isnt the cheapest of places) I think average is about 180k-200k, this wont be ideal home but beggars cant be choosers.
Phone, bband, cable - £30 a month
mobile bills - £40 total for me and hubby
Electricity - £35 a month average
Council tax - £116 a month

What else?

Thanks for all your help guys, I have no knowledge when it comes to mortgages etc as its my first time and I dont want to end up in a situation which I cant handle.

F_T_Buyer

Baby A,

I think you're asking totally wrong question.

You said "and I am fed up of paying someone else's mortgage"

Yet, by your figures, if you bought the cheapest house at £180k the interest alone would be £750 (@ 5%), £8 less than the rent you are paying now. Take into account the costs of home ownership, maintenace etc it's cheaper for you to rent than to buy.

Also, it looks as though interest rates are going up. If rates went up to 5% which is priced into the markets (with a mortgage at 5.5%) you interest part of the mortgage will be £825 a month, £66 more than you are currently paying (exluding mainenance of a property).

Buying a house on your own figures, won't make you better off.

clutton_2

i also would recommend that you save for the deposit. In the longer term - it is hard enough to factor in one mortgage % increase, but, you will have to factor in two - mortgage and loan. Who will you borrow the deposit from and how much interest will you be paying ?

F_T_Buyer

Oh, forgot to say: Save for your deposit.

BobProperty

AndrewSmith wrote:

.... besides the lender will ask where the deposit funds are coming from.....

Ask Peter Mandelson about it! ( the answer in his case is locked up somewhere in Leek ) In the extreme, if you are not straight about the answer, you may be commiting some version of obtaining money by deception or fraud. (Being a cabinet minister may help in these circumstances, but it's not guaranteed)

hyposmurf

I'd say save for the deopsit and dont get a loan as well as the mortgage.A mortgage is a big enough risk to take on with a kid anyway,no matter a loan to get the mortgage in the first place.Have you tried looking at shared ownership properties whre you pay part rent/mortgage.Maybe any of these maybe of use:
http://www.direct.gov.uk/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/fs/en
If I was in your situation I'd make sure that credit card gets paid of next month for sure and then look at ways of cutting your outgoings.Get an ISA account and try to put as much away each month into it.Could you find somewhere that is cheaper to rent for the time being while you save?Could you perhaps consider moving to a cheaper area that is just out of the region you have been previously considering?
Awful I know as youre probably too used to it now but do you need to have cable?Im sure youd get a cheaper phone/internet package.Also if you reduce the amount of credit cards/loans you apply for your credit history should look rosier for your check when they go to lend you a mortgage.I applied for nearly 15 credit cards in one week years back didnt realise at the time that it looks a little suspicious on your credit history.

irnbru_2

Baby_A wrote:

What else?

Do you actually have any rainy-day savings?

Rave

What F_T_Buyer said. At current valuations it's more expensive to rent the money off the bank to buy a house than it is to just rent the property direct from a landlord- plus you're then taking the risk that prices will fall and you'll be left in Negative Equity, and the risk that interest rates will rise. In fact it's very likely that interest rates will rise soon, we're lagging behind most of the rest of the world and the BOE will have no choice but to raise.

Don't do it- save up for the deposit, if your husband earns £35k this year then with your outgoings I see no reason why you couldn't save a grand a month or more.