Credit cards for deposit payment

ceepsprice

I heard somewhere about trying to get a 0% credit card to use as a deposit towards a mortgage, therefore reducing overall mortgage interest rate. Is this true or a bit of an Urban myth?
My wife and I are looking to buy the house we rent soon (within the next month or so), it is all a little bit complicated as at the moment we rent the house off her parents who live in what used to be her Gran's house, when her Gran died her house went to my wife's parents but as part of the will agreement the house we are currently living in goes to her Uncle in about a month's time.
Confused yet?!!!
We have spoken to her Uncle and have a good relationship with him, he is looking to sell it as he wants to buy a house in Cornwall, he agreed a while back to sell the house to us, he asked us to get 3 valuations and said we would take an average. He is keen to sell to us as we are 1st time buyers and obviously we have the family bond.
The house is going to cost around £170,000, between us we earn around £50000 a year, we currently have about £5000 savings.
We have several credit cards which we pay off each month, 3 of them are at £0 and have been for ages. 2 we use regularly (basically on day to day items and we collect the cashback or rewards).
I have heard that a 10% deposit helps to cut costs a great deal, that would mean needing to get £17,000, we will not be able to get this amount unless we do this credit card thing!!
Any suggestions?!

Thanks all!

kingkano

How would you repay the 17k though? thats a heck of alot to get thru, what with a mortgage repayment as well.... I think banks do ask where your deposit is coming from and hence credit cards woudlnt be the best answer.

AndyWallace

You could ask the uncle to fund part of the deposit from the equity. As you are sitting tenants many lenders will allow this to be done.

Andy.

ceepsprice

Cheers for the info, don't really understand it though could you put in complete idiot terms for me!!!
Cheers

toonfish

basically he "sells" it to you for 10% more than you actually pay him - gifting you the rest as your deposit.

ceepsprice

Do you mean by this that I go the mortgage lender and say I want to buy the house for £190,000, I've got £19000 and therefore i need £171,000 mortage.
Am i understanding this correctly, if I am then I know its something that my wifes Uncle would be happy to do.

Mr_helpful

type gifted deposit mortgage into google or msn and learn from those sites

Madjock

You could have all sorts of problems if you use a credit card advance. The lender will want to know the source of the deposit, and if you produce a bank statement showing the 17k sitting there, they will want to know where it has materialised from. Go with the gifted deposit option and make sure your uncle's solicitor knows what to do.

maninthestreet

Surely using the CC for the deposit will count as a cash advance, and would be subject to additional charges, as well as probably not qualifying for 0% interest?

kingkano

maninthestreet wrote: »

Surely using the CC for the deposit will count as a cash advance, and would be subject to additional charges, as well as probably not qualifying for 0% interest?

Not always. You can use a credit card cheque to pay yourself the money and some cards treat that as a balance transfer/purchase.

Madjock

but the lender will still see it as further borrowing.