Large deposit but no regular income

lula_mae

Hi, I hope i'm posting my question in the correct place.

I have been fortunate enough to be left a large lump sum of money. I live in London, and rent. It would be great if I could use this money to buy a place and get on the property ladder (even if I buy to rent maybe). However, in my opinion it's short of the average price of a studio/ one bed flat so I'd need a small mortgage.

I don't currently work, I'm a student. So I assumed I couldn't get a mortgage. However, someone recently told me that if your deposit is 75% of the porperty price then you don't need to have an income. Is there any truth is this? I find it hard to believe as surely the lender would want proof of how you will make repayments, but I thought I'd ask in case there is some truth to it. Would getting a loan rather than a mortgage be an option? I guess the income problem would apply here too, right?

Many thanks in advance.

maninthestreet

A loan would be more expensive than a mortgage - the interest rate would be higher, and you would have to pay off the loan over a shorter period of time than a mortgage.

House_owner

The mortgage lender will want to be sure that you can make the repayments, before giving you a mortgage - I believe that sticter criteria apply since the credit crunch. Are you sure that you can make the repayments without a regular income?

_Andy_

Bottom line is you won't be able to get a mortgage without income. Whoever told you that at 75% LTV it doesn't matter hasn't got a clue what they're talking about.

herbiesjp

You will need an income to get the mortgage.

Have you looked at guarantor options?

lula_mae

Thanks for replies.

House_owner wrote: »

Are you sure that you can make the repayments without a regular income?

Yes, I have been paying rent for 18 months which i believe would be more than any repayments I'd have to make. Or as I said, perhaps I could buy to let.

herbiesjp wrote: »

Have you looked at guarantor options?

No, but I will, thanks (do you know where I could read about this?). Will it affect the guarantor at all, obviously apart from if I dont make the repayments? ie. affect their tax status or anything like that?

celler

Cant they use capital as proof of abilty to pay,say youve inherited 80k put 60k down use the remaining 20k as proof of means to service the loan.
If you had a flexable mortgage you could pay the 20k straight in and take payment holidays if needed.
Some lenders only allow certain levels of overpayment though

maninthestreet

celler wrote: »

Cant they use capital as proof of abilty to pay,say youve inherited 80k put 60k down use the remaining 20k as proof of means to service the loan.
If you had a flexable mortgage you could pay the 20k straight in and take payment holidays if needed.
Some lenders only allow certain levels of overpayment though

Capital and income are not the same - what's to stop the OP blowing that theoretical £20K on a car the day after any lende has released the mortgage funds? A payment holiday is unlikely to be granted so soon after the start of the mortgage.

celler

Theres nothing stopping someone putting next months wages on the 3.15 at Kempton either.Surly a large sum in the bank is greater sercurity than a job which could be gone in a month or 2?

VIGILANT22

celler wrote: »

Theres nothing stopping someone putting next months wages on the 3.15 at Kempton either.Surly a large sum in the bank is greater sercurity than a job which could be gone in a month or 2?

Loss of employment can be insured against....a "punt" can't!

Conrad

There are companies that will lend without income proof as long as the property owner 'intends' to let the place. Rates crica 4%. A good broker will be able to help as long as you plan to let it out.