Borrowing money for a deposit!

snowcat123

Hi,

OK so here's the deal:

- We can get a £200k mortgage
- We need 25%
- We don't have 25%! We have 0%!
- Can't ask friends or family!

Is there a way? An unsecured loan? There must be something?!

:mad:

jc808

There is - wait a year and save £50,000

Tixy

No mortgage lender will accept you borrowing your deposit. They ask where the funds come from, and they'll check your credit files beforehand and if you've recently taken out new unsecured loans equal to your deposit they are pretty much guaranteed to withdraw the mortgage offer.

The way round it is to save up first.

BoGoF

25% = £50,000......no chance of a loan.

Anyhow, lenders won't accept a loan as a deposit

snowcat123

Based on our current circumstances it'll take 6 years to save this amount of money - in the meantime I will have paid nearly £70k in rent!

BoGoF

Well, you either make sacrifices.....stop all non essential spending and save it or you don't get a mortgage

TadleyBaggie

snowcat123 wrote: »

Is there a way? An unsecured loan?

Mortgage lenders will not lend when they discover the source of the deposit is a loan (even from family or friends). If you don't have the ability to save and now you have the added burden of paying back a loan, they would be concerned that you might be unable to pay the mortgage some way down the line.

Giddytimes

You should be able to apply for a decent mortgage with 10-15% deposit.

The only other way around it is to ask a family member to act as guarantor, that way you will have access to 100% first time buyer mortgages.

jamiefly

and you'd have paid £60k in interest on £200k of debt at 5% give or take.

Rent from a landlord or the bank. Either way it's the same thing really.

Tixy

snowcat123 wrote: »

Based on our current circumstances it'll take 6 years to save this amount of money - in the meantime I will have paid nearly £70k in rent!

Thats a common problem for people. Perhaps you can take an indepth look at your finances, maybe post a statement of affairs on the debt free wannabe section of the forum, where people might be able to advise on ways you can cut down on your current outgoings so you can save up quicker. They have lots of tips on increasing income, getting things cheaper, knowing where to try cutting back etc.

Very little chance of seeing 100% mortgages return in the next 10years, so the sooner you start saving the sooner you will be able to buy.

dealer_wins

There are several reasons why mortgage companies want the 25% deposit being put up by you and not a loan company. One of the main ones is so you dont walk away if the value of your house falls.

The best idea is to live very frugally for as long as it takes to build up a sufficient deposit.