Loan for Mortgage

gillianb_2

Hiya

Needing some advise. Me and my boyfriend have been paying £450 rent in a private let for over 4 years and have been given the chance of a 25% shared ownership - problem being we only have £800 deposit. We have been to the bank and got our mortgage approved and between rent and mortgage paying only £410. Problem we have is the other 3k we though we would get the rest from family and friends but no one is in the position for us to borrow from them. Is it possible to get a short term loan to pay this off? These houses are rarely avail and we have fallen for it if we wait to save the money which will more than likely take 1/2 years we could pay the loan off by then. Do you need to provide proof of deposit in Scotland? We are going to the bank on Wed to sign all the paper work just need to know if they will accept the loan or would it be better if we get someone to take the loan out for us? Other forums say that yes you can use a loan but needs to be declared when going for the mortgage - if this is the case and we try to get approved again with the monthly payments included will another credit check need to be done? We earn around £1900 per month after tax and have got a prev loan that we got approx 8 years ago that has 2 years left on it- would it be better getting a larger loan paying this off so the monthly payments are the same as the payments we declared on our exisiting loan? Sorry for info overload we're 1st time buyer just want to make sure what we are doing is right. We could definetly easily afford the loan no question but will the bank see that?

Thanks

CHR15

gillianb wrote: »

if we wait to save the money which will more than likely take 1/2 years we could pay the loan off by then.

If that were true you would have already saved the £3k over the last couple of years.

gillianb wrote: »

We could definetly easily afford the loan no question but will the bank see that?

Again, be careful of such a statement. If it were all going to be so simple, it would already be in the bag., you wouldn't be looking for a loan.

You are much better off saving for your deposit and save on the interest payments you would be making.

Loans to pay mortgage deposit seldom works, fortunately.

gillianb_2

Thankyou for your reply. We only started saving in Feb we are looking for a quick fix instead of continuing putting away £100/£150 a month for the next year or 2 thought as such a low deposit needed loan would do the trick and pay that off the same way.

CH27

Have you had your mortgage approved because taking a loan out could effect the decision.

JuicyJesus

Most banks will absolutely refuse to even consider a loan for the purpose of a mortgage deposit, for obvious reasons. What is the point of a deposit if that's borrowed as well?

paddyrg

If you find it tricky getting aloan for the mortgage deposit, it may be a blessing in disguise. Try having a look at the https://forums.moneysavingexpert.com/discussion/3177256 thread, at least clue yourself up in advance. Shared Ownership sounds like a great idea/deal, but be aware not all operators are terribly scrupulous and there are quite a few scams/harsh practices out there. If you go in with your eyes wide open and informed you can make your decisions wisely, one way or the other :-)

_Andy_

This will be a decline. The lender won't accept a personal loan for a deposit. The source of the deposit will need to be declared to the lender (I'm assuming you've lied and said savings) and to the solicitor.
God only knows why you let yourself get to this stage knowing full well you could't do it.

gillianb_2

Thanks for your replies

Yes we have already started the mortgage process and due to go in on Wed to sign the paperwork no one has yet asked where the deposit was from? If he does should I tell him the truth some savings and rest credit will they need bank statements? I was only told to bring in payslips and proof of ID. I have done some further research online found that so long as monthly outgoings for loan declared from the off there should be no problems, I have done this as have had various quotes for the loan. I have seen you can use a loan although not advisable. I spoke with a mortgage advisor from Lloyds who told me "I cannot advise you to get a loan and our bank will not provide you with the mortgage AND a loan but if you read in between the lines........" I do not know if she's right or not but had to give it a shot. Thanks for that link Paddy lots of different opinions on there luckily 1 of my friends owns the house 2 doors down and been in the scheme for 18 months so he's been guiding us along he's actually better off than when he was renting so fingers crossed if we do manage to get this we can start working on something of our own in the near future and no more paying someone elses mortage!

_Andy_

So the guy in Lloyds condoned fraud. Great.

CH27

Have you factored interest rates rises into your calculations?

gillianb_2

Hiya

The mortgage is on 3 years fixed rate after that will look into opts avail at the time. The rent stays the same so long as I stay on 25% and will go down if we decide to take further shares. The 2 year loan is also on a fixed term rate.