We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Using loans for deposits
Comments
-
Yes, I see what you mean. It's not an issue in terms of affordability - we've already discussed that with the lender. It's just that they're already offering us 95% LTV and the branch manager himself is already unhappy that the underwriter has agreed to this.
I guess we could try to find a loan with no (or very low) ERCs, and go back to the bank and say our circumstances have changed, and apply again for a mortgage. Messy though.0 -
Only you know what is right for you, but apart from a quick "no name basis" enquiry, I wouldn't be talking to the lender again until my home was under offer and I had an accepted on my purchase. Then again you need to keep your fingers crossed that they will agree to 95% when you come to do the formal application.
Difficult one.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Yeah - sorry, I seem to have a knack for asking unanswerable questions. Thank you though - that helps.0
-
Alternatively (I'm being ridiculous now) surely we could get the loan, pay off a chunk of the mortgage (we can pay up to 10% off the balance without incurring penalties), and then if we sell we'll be in positive equity and can use the profit for a deposit.
If we don't sell then we have a loan and a mortgage, but we can afford both so why not?! And our house will be in positive equity.0 -
Many lender now take the net value of your assets - i.e. deposit minus debt (loans, credit cards and overdrafts, but not student finance). If you need to claim benefits at any point, you will get consideration for your mortgage after three months but no consideration for your loan.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
-
cashorcheque wrote: »Alternatively (I'm being ridiculous now) surely we could get the loan, pay off a chunk of the mortgage (we can pay up to 10% off the balance without incurring penalties), and then if we sell we'll be in positive equity and can use the profit for a deposit.
If we don't sell then we have a loan and a mortgage, but we can afford both so why not?! And our house will be in positive equity.
If you don't sell you will be left with a loan and smaller mortgage. Now, unless you have a terrible mortgage deal, your mortgage must have a lower interest rate than your loan, so it will cost you more overall.
If you do sell, then you enter normal territory being without negative equity.
I would use that snowball calculator to see what a loan really costs you compared to a mortgage.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.8K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards