Should we take out a loan to pay the deposit on a house?

Lynn240

Hi,
Me and my partner have put a reservation fee down on a house which was £100, we are now waiting to do the application for the mortgage (we have already had it down in principal) then we are exchanging contracts come february time and i have to put down £1000 towards the deposit and they have given us until the beginning of june to come up with the rest of the deposit which will be £3900 to pay. We dont have stamp duty or solicitor fees to pay. We could save up about £2,500 by then but it wouldnt be enough so we are talking about taking out a loan after we have exchanged contracts. Could that be possible at all without the mortgage company finding out, or is that classed as fraud or what? Not really sure? Advice will be very much appreciated. Thank you

joolsybools

I'm no expert but I would think you need to pay the whole deposit before you exchange contracts? Have you got a mortgage agreed?

HappyMJ

Lynn240 wrote: »

Hi,
Me and my partner have put a reservation fee down on a house which was £100, we are now waiting to do the application for the mortgage (we have already had it down in principal) then we are exchanging contracts come february time and i have to put down £1000 towards the deposit and they have given us until the beginning of june to come up with the rest of the deposit which will be £3900 to pay. We dont have stamp duty or solicitor fees to pay. We could save up about £2,500 by then but it wouldnt be enough so we are talking about taking out a loan after we have exchanged contracts. Could that be possible at all without the mortgage company finding out, or is that classed as fraud or what? Not really sure? Advice will be very much appreciated. Thank you

It won't be fraud but I highly recommend you cut everything out of your budget so you don't need to take out a loan.

Lynn240

We have a mortgage in principal we just need to do the proper application now, i only have to put down £1000 by february thats when they are going to exchange contracts then we have until the beginning of june to put the £3900 down.

Lynn240

HappyMJ wrote: »

It won't be fraud but I highly recommend you cut everything out of your budget so you don't need to take out a loan.

I have gone on at my partner about this but he is worried incase we are a thousand pound down then it falls through and we lose our money

ACG

The lender will ask where the deposit came from, they may also ask for evidence (ie bank statements), if all of a sudden they see a lump sum hit the account whether it be from a loan company or someone else it could well get questioned.

Lynn240

ACG wrote: »

The lender will ask where the deposit came from, they may also ask for evidence (ie bank statements), if all of a sudden they see a lump sum hit the account whether it be from a loan company or someone else it could well get questioned.

Even if we take out a loan after the mortgage has been accepted and we have exchanged contracts, this will happen in february then i have until june to come up with the rest of the deposit. Will all credit checks be done by then or will they do anymore.

joolsybools

I don't mean to be rude but if you are having such issues already before you have bought the place, should you really be buying the place?

Thrugelmir

Lynn240 wrote: »

We have a mortgage in principal we just need to do the proper application now, i only have to put down £1000 by february thats when they are going to exchange contracts then we have until the beginning of june to put the £3900 down.

Are you sure that the £1,000 isn't just a reservation fee?

Normally upon exchange of contracts the full deposit has to be paid.
The solicitor will determine the source of the deposit and inform your lender. So your lender could withdraw the mortgage offer.

Lynn240

Such issues, such as?

Lynn240

Thrugelmir wrote: »

Are you sure that the £1,000 isn't just a reservation fee?

Normally upon exchange of contracts the full deposit has to be paid.
The solicitor will determine the source of the deposit and inform your lender. So your lender could withdraw the mortgage offer.

No it was a £100 reservation fee and it is £1000 towards the deposit then have until beginning of june to put down the rest. They are doing it this way to give us a bit of time to come up with the deposit.