First time buyer...I hope....no deposit...help!

JenAtkins

This may be a bit risky but its what I did to buy my first property and it worked well as I did the property up and ended up making a profit and did not suffer with negative equity on it. Which has in turn helped me to put a proper deposit on my new house that I am in the middle of buying.

If yourself and your partner can afford the monthly repayments it may be worth getting a unsecured personal loan for the deposit and then using that as your 10% and then going for the mortgage.

I would recommend seeing a financial adviser as that is what I did, and they will work out your affordability. If you can afford your loan repayment coupled with a mortgage repayment then it could be an option!

What I did was get a loan for 10k over 5 years which worked out at 200 per month and then got a 108K mortgage (did have a bit of savings) the mortgage was £625 a month over 30 years so my monthly repayments were around £825 in total which i know might be a bit more than rental but its worth seeing if you can do it for your budget!!

Annisele

JenAtkins wrote: »

If yourself and your partner can afford the monthly repayments it may be worth getting a unsecured personal loan for the deposit and then using that as your 10% and then going for the mortgage.

That used to be relatively common - but I don't know of any lenders that will still accept a personal loan as a source for the deposit. Sorry OP; I'm with the people who say "save".

opinions4u

JenAtkins wrote: »

This may be a bit risky but its what I did to buy my first property and it worked well as I did the property up and ended up making a profit and did not suffer with negative equity on it. Which has in turn helped me to put a proper deposit on my new house that I am in the middle of buying.

If yourself and your partner can afford the monthly repayments it may be worth getting a unsecured personal loan for the deposit and then using that as your 10% and then going for the mortgage.

I would recommend seeing a financial adviser as that is what I did, and they will work out your affordability. If you can afford your loan repayment coupled with a mortgage repayment then it could be an option!

What I did was get a loan for 10k over 5 years which worked out at 200 per month and then got a 108K mortgage (did have a bit of savings) the mortgage was £625 a month over 30 years so my monthly repayments were around £825 in total which i know might be a bit more than rental but its worth seeing if you can do it for your budget!!

Times are very different now. Even back in the day most lenders wouldn't accept a loan as source of deposit.

Now? Only one or two who would entertain it.

From a statistical viewpoint customers who save a deposit are several times less likely to default than those who borrow from a loan company. Mortgage lenders know this.

Taking on a mortgage in a low rate environment when saddled with a new unsecured debt because you couldn't afford to save is asking for trouble.

JenAtkins

It was only 2009 when I did this. I understand now that it may be a bit harder but it still could be worth a try as long as you have both solid incomes! There are plenty of home owners out there who have UPL's and credit card debts and they still manage to get mortgages!

I'm not saying its the best way to do things, I do agree that saving is the best way to buy a house but I know sometimes desperate times come for desperate measures. Some people don't have the luxury of being able to save if they are having to pay out on rent or when parents can't help towards deposit.

Many mortgage lenders will still lend as a lot of them check affordability rather than how many multiples of income, so if the OP can afford a loan and their mortgage as well as all the bills that come with owning a house then it may still work. All I'm saying its worth looking in to! It worked well for me as the profit I made on my first house allowed me to put a proper deposit on my second one!

jamesd

clairelouise29 wrote: »

Hi, thanks for responding, I just can't see any way that we could get £13,000 together. Was hoping there may be some scheme or magic way that we could get on the property ladder or perhaps some advice on shared ownership or something.

None that would be acceptable unless one of you has a parent who would give you the money. Even that would be unacceptable to some lenders.

What you can do is rent another place, the cheapest you can stand, for a few years. Then save and in the year prior to buying, use 0% for purchase credit cards for all possible spending. Use the money you're putting on the cards to boost the amount you have available for deposit and buying costs.

The money on the cards won't count as a borrowed deposit, so it won't block you from getting a mortgage for that reason. The debt will affect affordability calculations and reduce the total mortgage amount you can get.

Then buy a place that is deliberately inexpensive and continue to save money using the low outgoing costs to you can upgrade to a better place later.

Doing this you might be able to avoid the expensive 10% deals.

I'm paying almost the same in mortgage payments, interest only, as my Council Tax bill for the place I own. Less than I pay in utilities for the place where I live. Not permanent places to live.

jonnysaving

There's no quick fix I'm afraid. Draw up a budget and start saving what you can afford. Start thinking money saving and assessing whether things are essential or just nice to have. It gets easier with time and once you have 2 stable incomes saving gets much easier.

It will take some time though but it will be worth it in the long run. (My wife and I have been saving for 5 years)

Good luck.

evenasus

JenAtkins wrote: »

If yourself and your partner can afford the monthly repayments it may be worth getting a unsecured personal loan for the deposit and then using that as your 10% and then going for the mortgage.

Sorry, but I think that's a silly way to go.