using loan for deposit.

barcareal

Hi.

Was just wondering what is the likelihood of using an unsecured personal loan for a house deposit. I have one loan and that is the only form of debt I have. I would be paying nearly 70 a month less on a mortgage and insurance etc than I currently pay rent. I would use 7000 of the 12500 pound loan on a deposit. The house is up for 65000 I have only just got this loan and I was going to buy a car but have decided against this. I have only taken the loan out in the last week. I used 5k to pay off a loan on a higher interest rate and my credit card. I earn 20k per year. Any help would be appreciated.

barcareal

I have never missed a payment on anything.

opinions4u

I am not aware of any lender that will offer a mortgage where the source of deposit is a personal loan.

To lie about the source of deposit would be act of fraud.

USM

As above, lenders won't accept loans as deposits - you need to save this yourself.

Secondly, no chance at all of getting a 12k loan on such a low salary.

barcareal

I already have the loan.

barcareal

aaccording to boe 16% of ftb are using loan as deposit. this is why I ask.

EatingGlitter

My OH was telling me about a guy he works with who bought a flat recently. He bought a flat for £120k on earnings of £22k + £8k guaranteed overtime and paid for his deposit by way of loan.

The mortgage was through a broker and arranged with Halifax in the end... however, I wouldn't advise this as an option as the reason there are no 100% mortgages etc anymore is because people overstretched themselves and this would be doing just that.

barcareal

EatingGlitter wrote: »

My OH was telling me about a guy he works with who bought a flat recently. He bought a flat for £120k on earnings of £22k + £8k guaranteed overtime and paid for his deposit by way of loan.

The mortgage was through a broker and arranged with Halifax in the end... however, I wouldn't advise this as an option as the reason there are no 100% mortgages etc anymore is because people overstretched themselves and this would be doing just that.

I agree most people would be overstretching but I am currently paying more in rent by a fair bit than if I bought a house for 65k. I have never missed a payment for anything and have paid off loans that totalled the amount of this new loan.

Loanranger

Interest rates can only go one way. If the mortgage rate went up to say 10% or higher say 15%, could you still afford the repayments on the mortgage and on the loan? Your current rent would then look quite attractive.
I have lived through mortgage rates of 15% so while that high rate is unlikely it's not impossible.

barcareal

Exactly the reason I would get a five year fixed.

dimbo61

Renting a property is not the same as owning your own place
If you have a burst pipe its the landlords responsibility to get it fixed, gas safety check every year. Any repairs are down to the landlord, building insurance etc