House-buying idea - maybe new, maybe not...

mjdh1957

laurarobby wrote: »

what a wonderful idea!!!

we are in the same situation pay more in rent then we would a mortgage. we could save a deposit but would take about 5yrs. we are hopefully borrowing the deposit from family and would pay them back monthly over the 5yrs (including a little intrest) this is the only way we would be able to get a house anytime soon. maybe once the house is bought etc we could get a loan and pay the majority back straight away and then owe the bank instead (not sure if that is possible) but we can afford to pay both off monthy. but will see what mr banker says!

If you tell the banker that you are borrowing the deposit they will almost certainly say No. And your solicitor will ask where the funds come from as well, so if you lie you are committing fraud.

Idiophreak

laurarobby wrote: »

ok so what ur saying is we cant buy a house even with help from family? how do they no we will be paying back or not?

dont realy know about eqity or anything i do know we can only get 10% deposit though

It's really tough. I can well sympathise with your position - I was there a couple of years ago -being able to afford to repay both a deposit and a mortgage...but banks just don't see it that way. You're falling in the gap left by the withdrawal of 100% mortgages.

There are still options available to you, though:
1) rent and save until you can afford the deposit on your own -most recommended solution on these boards.
2) do something illegal - either take a loan for another purpose and use it for a deposit, or declare a loan as a gift - least recommended solution.
3) do something...in between. EG switch all your spending to credit cards and save all the money you'd normally spend...then you can apply for the mortgage, say that your deposit's coming from savings, but still have the credit cards accounted for in the credit check. Seen a few discussions on the topic, never seen a conclusion on whether it's legal or not.
4) Sweet talk your family into giving you the money instead of loaning it - maybe a long shot?
5) Look into FTB schemes available through government or new build properties.

Personally, I've a lot of positive experience with option 5, but a lot on here will advise against.

sugarwalsh

I can't help but notice you are paying some debt off, laurarobby and you are getting married, I don't know whether you can ask your guests for cash as gifts? You could then pay off your debt and start saving towards your deposit. I know you have seen a house on another thread, but sometimes it pays to be patient.

Check what the maximum 'gift' someone can give you for your wedding is, you might get your deposit that way.
megan

laurarobby

sugarwalsh wrote: »

I can't help but notice you are paying some debt off, laurarobby and you are getting married, I don't know whether you can ask your guests for cash as gifts? You could then pay off your debt and start saving towards your deposit. I know you have seen a house on another thread, but sometimes it pays to be patient.

Check what the maximum 'gift' someone can give you for your wedding is, you might get your deposit that way.
megan

ok soo looks like were screwed then as we were just goin to get a "gift" and repay it!

our debt is payed off as of november 6th! andwedding is just about paid for! plus i cant as guests for money! its just not right

Idiophreak

laurarobby wrote: »

our debt is payed off as of november 6th! andwedding is just about paid for! plus i cant as guests for money! its just not right

Are you sure? I've been to a few weddings where they've asked for contributions to a deposit as gifts...Never thought twice about it, it seems quite fitting for this day and age...We asked for contributions to the honeymoon spending fund for ours - and raised a surprisingly large chunk of money, so it's worth thinking about.

sugarwalsh

When my sister got married last year my Grandma gifted her £3000. You can supply a gift list and those who wish to give money will do so regardless. So, no, you are not 'screwed', it just requires a little patience and lateral thinking!

Megan

sonastin

whether it is a loan or a gift is a question of semantics and interpretation as much as fraud.

If you find yourself struggling financially, would your family let you off paying them back for a few months/years until you get back on your feet? Or do you have a formal agreement in place which requires you to pay them before you pay for, e.g. food? Would the still insist that you paid them back if the house was repossessed and would they try to put a claim in with the bank for a share of the proceeds of the sale?

If it is the former, one could argue that they've given you a "gift" this month of £X because they care. And in future months, you give them a gift of £x because you care. Some months you might not be able to give your gift, some months you might choose to give £x+y but it doesn't necessarily have any bearing on the original gift. Just because you choose to stop giving regular gifts back to your family when the total you gave them is equal to their original gift is more like coincidence.

It's also nothing to do with the bank because they don't need to take it into account in their affordability criteria - how you spend your disposable income is your business. If you buy finest ranges and only spend on yourself or buy value ranges and give something to your family, its none of their business. And if the debt to the family isn't secured on the property, the bank get to do with it as they want when they come to repossess. It is only when this is a formal loan arrangement and/or you find yourself prioritising paying off family before you pay your debt to the bank that it is an issue to the bank. If you enter into the agreement with the intention that the family get paid back first, then it is fraud.

Yorkie1

I think you are interpreting that too loosely sonastin. If there is an agreement that the deposit money will be repaid, then it is a loan, irrespective of mental prioritisation.

Don't forget that the family will also have to write a letter or even make a statutory declaration that the money is a gift. If that is not true, that constitutes fraud too.