first time 5% deposit?

beecher2

It is impossible to borrow to become debt free. If your parents will lend you money interest free then it makes sense to use it to pay off your debts, but then you should concentrate on paying back your parents and building up a deposit.

karbar

im borrowing from my parents so i can put it down as deposit for the mortgage this is the only way i can spread my existing loan over the mortgage and buy house this summer, otherwise i will have to work for 1.5years to pay off my loan and probly then start saving for a mortgage !

LilacPixie

I am confused. You are borrowing money for a house deposit from your parents (fair enough loads do it) this allows only only a 5% deposit but you are then going to put loan into mortgage?? so where will the equity in the property come from??

karbar

true, i was given wrong info from the bank yesterday,just phoned them and they now saying there will be no equity and they cant do it while i have outstanding loan.

beecher2

karbar wrote: »

im borrowing from my parents so i can put it down as deposit for the mortgage this is the only way i can spread my existing loan over the mortgage and buy house this summer, otherwise i will have to work for 1.5years to pay off my loan and probly then start saving for a mortgage !

That sounds like the best plan of action then - if you go onto the Debt Free Wannabee forums you should get help in cutting back on expenditure to pay the loan off quicker.

beecher2

I see you've already been there - have you taken this advice?

Clothing £100
Presents (birthday, christmas etc.) £40
Haircuts £20
Entertainment £25
Holiday £50
drinks £150
This lot is all luxury and the obvious target for cutting down. How far you reduce it is up to you, but I would suggest that £100 divided between these six categories would still let you live a comfortable life.

karbar

beecher2 wrote: »

I see you've already been there - have you taken this advice?

overall yes, situation is improving.

my bank is still happy to offer me 90% mrtgage if i put down 10k deposit!
but i then have huge payout for my existing loan (which they not happy to spread it on top of the mortgage!

thats around 1100+ for the outstanding loan+ cc
370 to 520 mortgage (estimate)
and 250monthly repayment to my parents

maybe i should transfer my loan to cc ? so i reduce my repayment from 1100 to something like 700?

is it worth it ? or should i wait for another year?

sarahannreid

Bit of a far out suggestion here, but trust me! Why don't you move in with your parents ( if you have already moved out). Work out how much you estimate you will spend on mortgage, council tax, loan repayments (and parental loan repayments), and all the luxuries listed above, and put that amount away every month for a year? By the end of the year you will have saved enough for either a small deposit for your house, or enough to pay off a sizeable chunk of your loan. Either way you will have learned some useful budgeting skills, and will have improved your credit rating and financial situation.

Hopejack

I'm surprised your bank are allowing you to lend if they know you are borrowing the deposit from your parents! Most lenders want to see you save for your deposit these days and want to see proof of that saving i.e. cumulative bank statements to prove it, if they want to!

brit1234

Best pay off your debts and save a deposit improving your credit rating in the mean time. You don't seem to be in a position to buy at all, you also have no money set for fees or rainy days.

Even if my some miricle you do buy you are likely to suffer negative equity as prices are set to fall.

Sorry to be blunt, but you need to be realistic.

Bonus is the longer you save the more prices will come down so don't give up.