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Bank Loan for mortgage deposit.
alikenney87
Posts: 1 Newbie
in Loans
Myself and my girlfriend are looking to purchase a house under the governments new help to buy scheme in certain areas.
We have found some houses around 180,000, with the governement funding 20% meaning we would need 5% as a deposit on the house. So we would need around £9000. We currently do not have a lot saved up and are considering obtaining a bank loan in order to fund the deposit. We have worked out the outgoings and even with the repayment of the loan, mortgage, bills etc we would still be better off than we are now renting.
Is it possible to do this? Are the mortgage companies guarateed to decline us when they see we have taken this loan? Do you have to have a deposit saved before you APPLY for a mortgage? We are first time buyers and desperate to get on the ladder. Any advice from somebody who knows more would be much appreciated. Many thanks
We have found some houses around 180,000, with the governement funding 20% meaning we would need 5% as a deposit on the house. So we would need around £9000. We currently do not have a lot saved up and are considering obtaining a bank loan in order to fund the deposit. We have worked out the outgoings and even with the repayment of the loan, mortgage, bills etc we would still be better off than we are now renting.
Is it possible to do this? Are the mortgage companies guarateed to decline us when they see we have taken this loan? Do you have to have a deposit saved before you APPLY for a mortgage? We are first time buyers and desperate to get on the ladder. Any advice from somebody who knows more would be much appreciated. Many thanks
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alikenney87 wrote: »Is it possible to do this? Are the mortgage companies guarateed to decline us when they see we have taken this loan? Do you have to have a deposit saved before you APPLY for a mortgage? We are first time buyers and desperate to get on the ladder. Any advice from somebody who knows more would be much appreciated. Many thanks
You will be asked where your deposit is coming from on the application. If you say loan then it is 99.99% certain that you will be declined.
If you are silly enough to lie and say it is from savings and get approved for the mortgage, then when it proceeds, your solicitor will ask for proof of where the funds came from and you could well have a lot of explaining to do when it shows up that it was actually from a loan and not savings.0 -
I would also bear in mind that if you are incapable of saving up £9000, it is unlikely you can afford to service a £180,000 mortgage.0
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Go and apply for a loan and see where you get and you will be back on here to say how you have been deprived of a house.
Why dont you currently have alot saved up ?
Maybe look at your spending and cut back.
You say you have worked out the outgoings but you don't know what % for a mortgage you would get.0 -
A mortgage+loan for the deposit = 100% mortgage.
Selling these products was a contributing factor of the global financial meltdown, hence they were withdrawn.
Saying you saved it up when you didn't would be mortgage fraud, buying a house with a mortgage is not really like buying anything else and has different rules.
Even if you were given it by a relative/won it on the lottery you have to say so.
It is not the end of the world, £9000 can be saved between you in a reasonable timeframe if you try hard and if you really want a house you will try hard. Could you (Horror of Horrors) move back in with parents until you save it up?ISA £1675
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No mortgage lender will accept that.
Nor do I know of any personal loan provider that will lend for that purpose anyway.
Back to the drawing board I'm afraid.0 -
bank of mum n dad ?0
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If you were really desperate you'd be making some progress with the saving. Don't forget stamp duty, surveys, legal costs and product fees.We are first time buyers and desperate to get on the ladder
A few issues with this.considering obtaining a bank loan in order to fund the deposit
1) I'm not aware of a loan company that would allow a loan for this purpose. To state a different purpose is fraudulent.
2) I'm not aware of a mortgage lender that would accept a deposit sourced in such a way.
3) If they do they will almost certainly reduce the amount they will lend you.
Starting home ownership with an extra lump of debt isn't a good idea. What are your plans for making sure you have enough money to maintain and repair your property? How are you going to manage when mortgage payments go up? Or income falls / stops?0 -
Go and apply for a loan and see where you get and you will be back on here to say how you have been deprived of a house.
Why dont you currently have alot saved up ?
Maybe look at your spending and cut back.
You say you have worked out the outgoings but you don't know what % for a mortgage you would get.
A bit harsh, the poster has one post, you have just short of 20,000. It was an honest question looking for an honest answer.0 -
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