First time buyer- loan to pay deposit query

MrNorfolk

Hi everybody.

I am new to this forum. My wife is expecting and we are looking to relocate back to our home town to be nearer our families. Currently we are renting in the north of the country where prices are cheaper and landlords are more agreeable to pet owners. Unfortunately our home town is in the south east where the opposite of this! We are both in full time employment but obviously my wife will be going on maternity leave before finding new employment. As a mental health nurse with a specialism I have no concerns about getting a job in the new area.

Anyway here's the question. I have seen the new 95% mortgages on offer but we still dont have quite enough. Is it possible that my wife could get a loan under her name that we could then use for a deposit for a mortgage under my under my name? I am guessing the answer would be no or else all couples struggling to find a deposit would be doing it but I have no idea. I have had a mortgage and all my family are council tenants.

All advice appreciated. Thank you

MrNorfolk

It should read I have never had a mortgage! I am typing this on my mobile and proof reading my comments is proving difficult due to the sensitive touch screen.:)

somethingcorporate

No lender would take a loan as a source of a deposit.

If you cannot save 5% are you sure you can cope with the increased costs of being a home owner?

Keep saving, cut back on spending and then get yourself a good deal when one comes along.

brit1234

These 95% Newbuy schemes will leave you in negative equity and a con, they only benefit the builder. No self respecting bank will grant you a 95% mortgage when your 5% deposit is a loan. No bank really wants to offer Newbuy mortgages either.

Just get saving a deposit the next few years and save also about £4,000 for costs.

mildred1978

No no no no no no no.

MrNorfolk

Thanks for all replies so far.

Would the bank really know if the deposit is funded by a loan if it is under my wifes name and the mortgage application is a sole application under mine?

In terms of affording to be a home owner, We pay more for rent due to often having to pay a premium to lovely landlords for having pets.

The only reason I am trying to find a short cut is due to wanting to move back to near our families before the baby is born.

I am guessing by replies that this is unlikely! Surprised to hear of the newbuy being a con, will banks not lend them then afterall?

somethingcorporate

I am not talking about the difference in cost between renting and a mortgage - these are minor, I am talking about the costs of upkeep - boilers, redecoration, minor repairs. These are the things that can easily add another £2-3k a year onto the cost of owning (if not more)!

MrNorfolk

I can afford to be a homeowner. I just dont have the deposit. So was asking whether my wife could get a loan under her name and I then used that loan for a deposit for a mortgage application under my name only?

Yorkie1

On the mortgage application you have to declare the source of the deposit funds. Lying about this is mortgage fraud. Do you really want to risk a (worst case) criminal conviction, possible disciplinary action, and difficulty in ever obtaining credit again in the future?

It's just not worth risking it.

Furthermore, although I'm not entirely sure on this point, it's possible that as your wife is linked to you financially, her credit might be searched anyway - and will reveal the loan.

Also, are you sure that you'd be able to get a mortgage on your income alone if you've been unable to save sufficient deposit on your lesser outgoings up north?

MrNorfolk

Thank you Yorkie for answering my question. Having never applied for a mortgage or having anyone's experience to draw on I didn't know what questions where asked on application. I most certainly won't be trying this route now. Thank you

In reference to the 'can you afford' to be a homeowner questions. Yes. Thank you for your concern but yes yes yes! Please stop asking as that was never the question. Renting with pets is costly. At present both myself and wife have 50 mile commutes on rural roads causing great expense in fuel and car maintenance. Our home city that we wish to relocate too is small so we could poss dispense with both cars. We are both qualified professionals with reasonable paid jobs. I was merely considering finding a shortcut as finding landlords to take us and our pets is always a nightmare and we wanted to move before baby is born. Only reason. Now I know this isn't a viable way of shortcutting to a deposit we will carry on saving. Not being rude but please please please can people stop asking whether we can afford to be homeowners.:)

somethingcorporate

If you are both well paid professionals why do you not have a deposit saved? surely not just because you have pets.

It's a perfectly valid question to ask as the extra expense in home ownership is akin to saving for a deposit. You have failed in the latter so far so what makes you think you could afford the former?