First time buyer- loan to pay deposit query

DannyboyMidlands

In my opinion not saving even a 5% deposit when you both have good jobs is a pretty feeble effort. You just need to knuckle down and get on with it rather than scheming like you propose.

Even if the loan idea did work, you'll be paying closer to 6% interest on a 95% mortgage rather than something like 3% if you had a 20% deposit. Plus you'll have loan repayments to meet and no emergency fund. Madness.

MrNorfolk

DannyboyMidlands wrote: »

In my opinion not saving even a 5% deposit when you both have good jobs is a pretty feeble effort. You just need to knuckle down and get on with it rather than scheming like you propose.

This is the sort of post I was talking about. Who asked for your opinion? Answer the OP or don't. I refer you to my most recent post. I've been polite but quite frankly I have had enough of the judgemental attitudes of some.

DannyboyMidlands

Who asked for your opinion?

Erm you did. Let me remind you:

All advice appreciated. Thank you

My advice is that its a stupid idea and you should just save some money. If you don't appreciate that advice and actually just wanted to hear what you want to hear then tough, I'm giving it anyway.

Idiophreak

DannyboyMidlands wrote: »

Even if the loan idea did work, you'll be paying closer to 6% interest on a 95% mortgage rather than something like 3% if you had a 20% deposit. Plus you'll have loan repayments to meet and no emergency fund. Madness.

The loan repayments are a complete non-issue, though...I don't understand why you're getting hung up on them. If a lender didn't think they'd effect the OP's ability to repay, why are you so sure otherwise?

Even at 6%, it's quite likely paying a mortgage will be cheaper than rent in a comparable property, especially with the pet issues OP has and if they're willing push the term out to start with. In a few years, they could switch onto a more favourable rate with a better deposit, it would just take them less time to get there. They'd also have made a small amount of repayments to the mortgage and have had the stability of home ownership for that time. It's just not as black and white as you're making out.

DannyboyMidlands

On second thoughts, why am I being such a killjoy?

100% mortgages all round.........I mean saving is so hard these days.......what with the rising cost of everything.......and we deserve it............ and have some pets............we can take it over 35 years............. in a few years time, on one income and with kids, everything will be fine...........and rates will definitely still be low then.

What could possibly go wrong?

Idiophreak

DannyboyMidlands wrote: »

On second thoughts, why am I being such a killjoy?

100% mortgages all round.........I mean saving is so hard these days.......what with the rising cost of everything.......and we deserve it............ and have some pets............we can take it over 35 years............. in a few years time, on one income and with kids, everything will be fine...........and rates will definitely still be low then.

What could possibly go wrong?

You're really missing the point...and where you're missing it is where you say "all round". There really is no one-size-fits-all.

There are plenty of people about who could afford to service a 100% mortgage. Yes, even with rates rises. Yes, even if their partner popped a sprog. Yes, even with pets.

Affordability isn't what's stopping lender's offering 100% mortgages.

MrNorfolk

DannyboyMidlands wrote: »

Erm you did. Let me remind you:




My advice is that its a stupid idea and you should just save some money. If you don't appreciate that advice and actually just wanted to hear what you want to hear then tough, I'm giving it anyway.

No what you have done rather than offer 'tough' advice is choose to be rude and ignorant and dress it up as advice. You did not answer the question but instead attacked my "feeble" actions. That is just rude. I am sure you will convince yourself that you are just saying it like it is or being blunt or shooting from the hip but in fact you are either just a bored troll or just a rude judgemental man with no social skills. You can offer advice that people do not want to hear without being offensive and damning them as 'feeble' or stupid. However you have chosen not to do that which is quite revealing and probably requires some personal reflection on your part.

Anyway, I am done with this thread. Thank you those who have taken the time to answer without judgement, rudeness or patronising. I do appreciate it. Shame one can not ask an innocent question here without being subjected to flaming by troll.

Thrugelmir

Idiophreak wrote: »

Willingness is a different matter. I don't believe the amount of saving you have has much to do with your ability to repay a mortgage.

On the whole its a reasonable indicator as to the attitude of the potential borrower towards money. People you may be surprised to hear do fall into several distinct camps. The major lenders have sufficient statistical data with which to set their internal credit scoring algorithms.

Lenders choose their customers not the other way round.

Idiophreak

Thrugelmir wrote: »

On the whole its a reasonable indicator as to the attitude of the potential borrower towards money. People you may be surprised to hear do fall into several distinct camps. The major lenders have sufficient statistical data with which to set their internal credit scoring algorithms.

Lenders choose their customers not the other way round.

I quite agree that lenders can afford to be picky - and they should be...and this is why they often refuse to lend to people without deposits, or with deposits raised from credit...because they can afford to cherry pick the very best candidates.

That still doesn't mean, though, that not having a deposit indicates an unwillingness to save, nor an inability. It may just be that the person hasn't had time to save yet. This is why, given a decent income and a modest request on the mortgage amount, lenders *will* still lend to people with outstanding loans, credit cards etc...because even without a "proper" saved deposit they're confident in the person's ability to making the repayments.

I guess it's a balance of your willingness vs ability.
If the bank deem your ability to repay is good enough, they won't worry so much if you've demonstrated willingness.
If, however, you're ability to repay is a bit more touch-and-go, they'll require more proof of your willingness (ie more "proper" deposit).

DannyboyMidlands

MrNorfolk wrote: »

No what you have done rather than offer 'tough' advice is choose to be rude and ignorant and dress it up as advice. You did not answer the question but instead attacked my "feeble" actions. That is just rude. I am sure you will convince yourself that you are just saying it like it is or being blunt or shooting from the hip but in fact you are either just a bored troll or just a rude judgemental man with no social skills. You can offer advice that people do not want to hear without being offensive and damning them as 'feeble' or stupid. However you have chosen not to do that which is quite revealing and probably requires some personal reflection on your part.

Anyway, I am done with this thread. Thank you those who have taken the time to answer without judgement, rudeness or patronising. I do appreciate it. Shame one can not ask an innocent question here without being subjected to flaming by troll.

What's a troll? Somebody who you don't agree with?

I'm sorry that you took such offence but stand by what I said. I think that borrowing the deposit money is a stupid idea, it just is, no other way to say it. All you need to do is knuckle down and save some money. Pull your socks up man.