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First Timer Buyers

I got an email about a week ago which said that I could get a free credit check done (I was with them a few years ago and they really helped me at the time).

Both myself and my partner logged on the other day and checked what our credit score/file is currently like and to my surprise I was in the excellent and my partner is in the good category.

We had a discussion about buying our first home, which why I'm am on here.
We were thinking of getting a £160,000 mortgage.

We currently only have about £2000 in savings, the question that I would like to ask/idea that I had was that we both could borrow about £15,000 each from the bank to make up our deposit, total £30,000 deposit.

Even after the mortgage repayments and paying back the loan it works out to be cheaper then renting our current place which is cheap for where we live.
Any suggestions/help would be great?
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Comments

  • the first question you will be asked here is how much you earn. It's not a matter of whether you can afford to pay it, it's a matter of whether a lender will offer you what you need. You might need 45k income to borrow 160k, but the experts here will confirm
  • Incyder
    Incyder Posts: 2,016 Forumite
    edited 22 February 2011 at 2:36PM
    A loan for a deposit ? Not a good idea.

    Basically you will still owe 160k but 30k of that will be at a silly high unsecured debt interest rate and the rest would be on a normal mortgage rate.

    You will have to declare the 30k debt (they will find out) that you would be in, to the mortgage company and this will not go down well and will affect how much they will lend you.

    So......

    1) don't take out any personal loans to fund it.
    2) save up a big deposit, 20k rather than the 2k you have.
    3) buy a cheaper house than 160k so you borrow less on a mortgage.

    but as said above, it depends on your combined wages. If you are on 80k a year between you, then you can do what the heck you like.
  • I think they meant 30k loan + 160k mortgage
  • Just confirm as I didn't make myself clear, sorry.



    We were going to get £130,000 mortgage plus the £30,000 deposit. So total would be £160,000 borrowing.


    Our combined income would £50,000 per yr
  • It seems that you think a decent credit rating is all you need for a mortgage of any size - that is far from being the case.
  • wwalker30
    wwalker30 Posts: 15 Forumite
    Tenth Anniversary Combo Breaker
    edited 22 February 2011 at 2:58PM
    thats constructive thanks, I was just asking a question?

    Not for sarcasm, this is a forum to ask question is it not.
  • With that income, you could likely borrow £160k. But you will need a deposit! If on 50k a year you've only saved £2k, it begs the question will you really be able to afford the mortgage payments
  • We have done the calculations and we can afford both the loan and the mortgage repayments, if we were to save for the £30,000 deposit for next 6.5yrs we would have the deposit. I would be 40, which then might make it harder to get a mortgage because I would be nearing 70 by the time we would be able to pay it off.

    Also in 6.5 yrs you might need a much higher deposit to start with.
  • ruggy83
    ruggy83 Posts: 16 Forumite
    I wouldn't consider getting a bank loan for a deposit, the mortgage lender will find out and turn you down. Your best bet is to save 10%, maybe look at cheaper properties, and start lower down the ladder. Could you downgrade your car? I've done this to build my deposit up. I used to drive a Lexus and have economised and gone to driving a 10 year old Clio. If you're desperate enough, im sure you can save at least £10k a year between you.
  • pinkshoes
    pinkshoes Posts: 20,232 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The mortgage company will ask where the deposit is coming from, and a deposit in the form of a bank loan is NOT accepted.

    If you have a joint income of £50k, surely it won't take you too long to save up a decent deposit. How many years have you been saving so far, as £2000 is pretty poor, so I presume not long!?
    Should've = Should HAVE (not 'of')
    Would've = Would HAVE (not 'of')

    No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)
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