First Time Buyer

kalyanvs1981

Myself and my my wife made 10% deposit to buy a home using personal loan. Our salaries are good enough to pay off the loan and mortgage amount without any problem. We also checked the affordability calculator and everything looks fine.

My question for you is, does the lender reject the mortgage application based on we making the deposit by borrowing personal loan?

We have taken the loan last week and have an appointment with the bank for mortgage next week.

We have also found the property and agreed the deal. Please advise?

mrginge

Does the answer to this question influence what you tell the bank about source of deposit?

kalyanvs1981

Yes it does.

GMS

Source of deposit will be asked. If you lie it is fraud and will cause issues now and in the future.

kalyanvs1981

I am not going to lie to bank. I will say some part of deposit is by borrowing personal loan. Question is, will they accept deposit as a borowwing from my personal loan?

Yorkie1

No they will not accept a loan as a source for the deposit.

If you lie and say you have saved it, they may well ask for proof of the savings - and when they find out that you have lied, the withdrawal /refusal of the mortgage offer will be the least of your worries because they will put a fraud marker against your name on a central database. This would make it much harder for you to get any credit e.g. a card, insurance.

Really, don't risk it.

missindecisive

I don't even think they will ask where your deposit has come from.
In all the years Ive had mortgages, they have never asked this.
They will be very interested in your income and will ask to see bank statements/wage slips to prove your earnings.

Yorkie1

missindecisive wrote: »

I don't even think they will ask where your deposit has come from.
In all the years Ive had mortgages, they have never asked this.
They will be very interested in your income and will ask to see bank statements/wage slips to prove your earnings.

I don't know when you last applied for a mortgage, but these days every mortgage application asks how much deposit you have, and where it comes from e.g. one's own savings.

mrginge

missindecisive wrote: »

I don't even think they will ask where your deposit has come from.

Erm. I think they will.

Fitzy83

Can't give you advice about whether they will accept the loan, but definitely don't lie to the lender or solicitor.

I had my deposit from savings and a gift. Had to provide my own bank statements for 3 months, bank statements from my parents and partner's parents for 6 months, certified ID for everybody.

Even if the lender doesn't ask, the solicitor will go through everything with a fine toothcomb (for money laundering regs) and if they find out you have lied, they will have to inform the lender and it'll be bye bye mortgage.