Loan Towards Deposit?

cellardor

My wife and I are currently finding it hard to save for a deposit for a mortgage; we are saving but no-where near as fast as we would like.

What is the general concensus on getting a loan towards part of the deposit?

Has anyone done this? Are there any traps to avoid? After asking around friends and colleagues, apparently this is quite a common practice.

Any comments or suggestions would be greatly appreciated!

Wutang_2

cellardor wrote: »

My wife and I are currently finding it hard to save for a deposit for a mortgage; we are saving but no-where near as fast as we would like.

What is the general concensus on getting a loan towards part of the deposit?

Has anyone done this? Are there any traps to avoid? After asking around friends and colleagues, apparently this is quite a common practice.

Any comments or suggestions would be greatly appreciated!

http://forums.moneysavingexpert.com/showthread.html?t=2324541&highlight=

Dan_1976

A few years ago as long as affordability is good no problem. However in 2010 most lenders want your deposit to be debt free.

Then again, if you took a loan out 6 months before you buy, if income etc is ok then why or how would they know?

_Andy_

No lender will accept a loan as a source of deposit.

Dan_1976

Funny, if only they lent money correctly in the first place!

AmyBelle_2

My husband and i were in a similar situation....
we basically asked our parents to take a loan out and we just make the repayments....
we quite comfortably paid back the repayments... and then we just paid it off when we remortgaged.
hope this helps

VIGILANT22

Dan_1976 Then again, if you took a loan out 6 months before you buy, if income etc is ok then why or how would they know?[/QUOTE]

1. It would show up on the credit file.
2. Source of deposit on the application form
3. If you said this was from your own savings ie 10k and you took out a loan 6 months ago, why would you have 10k of debt if you had 10k of savings??
4. Underwriters are like warriors nowadays, they would pick this up immediately.
5. Applicants are required to sign a doc with similar wording "You make the folowing declaration to us, the information given to us is true and accurate, complete and up to date to the best of yor knowledge and belief".
6. So they sign this doc and then it is picked up by "the warriors" the deposit came from prior borrowing!!

AmyBelle_2

I imagine this would probably work....
If you have 6 months... get the loan now..... and keep hold of it until you need it?!?!?!

Dan_1976

VIGILANT22 wrote: »

Dan_1976 Then again, if you took a loan out 6 months before you buy, if income etc is ok then why or how would they know?

1. It would show up on the credit file.
2. Source of deposit on the applic
ation form
3. If you said this was from your own savings ie 10k and you took out a loan 6 months ago, why would you have 10k of debt if you had 10k of savings??
4. Underwriters are like warriors nowadays, they would pick this up immediately.
5. Applicants are required to sign a doc with similar wording "You make the folowing declaration to us, the information given to us is true and accurate, complete and up to date to the best of yor knowledge and belief".
6. So they sign this doc and then it is picked up by "the warriors" the deposit came from prior borrowing!!
[/QUOTE]

I think it would depend how the rest of the app looked. I know its not the right thing to do, but we nothing about income etc.

Also, I did not add, I dont think this is the right way to get a mortgage, I was just giving an opinion.

TrickyDicky

If you cant save, then you probably cant afford a mortgage and all the problems that come with owning a house that your landlord currently pays for.

Dan_1976

Maybe if the OP gave us more info, why is it hard to save income or will power?