Is this possible?

darrendonald2

Question:

Is it possible to get a personal loan (from anywhere) that does not show up on my credit report so that I can use the personal loan as a mortgage deposit?

I don't want banks to see that I have a loan when I apply for a mortgage or they will not give me a mortgage.

Here's the facts ...

For about eight years I have invested in property. I purchase in town centres so that rental yields are high and (most importantly) I experience very little void periods. The big stumbling block in growing a port-folio is the 20% deposit needed for a BTL mortgage.

This is frustrating because I know that rental yields can easily cover mortgage repayments AND a personal loan, but banks simply won't lend to you if you use a personal loan for your 20% mortgage deposit.

It does work:

I recently bought a £110,000 property and borrowed £88,000 from the bank. I needed to put in 20% (£22,000) which I did so with my own money. Suppose I got a personal loan from HSBC for £22,000, the (actual figures) would look like this;

INCOME

• £1000/month - Rental income I am currently receiving

OUTGOING

• £340/month - Repayments on the mortgage (fixed for 4 years)
• £529.41/month - personal loan repayments spread over 4 years

PROFIT

• £130.59/month (without using my own money)

The only trouble is, if you have an existing personal loan you can not get another mortgage. When you apply for a mortgage, the bank will see that you have a loan on your credit report.

So, the only way to get around this, as far as I know, is to borrow from friends. Banks won't see this. I have asked my friends (who don't plan on buying a property) to take out a loan for £15,000 and give it to me. I would then pay their loan off via direct debit plus an extra £1000 as a thank you. No one wants to do it though

So, back to the question. Is it possible to get a loan (from anywhere) that does not show up on my credit report so that I can use the loan as my mortgage deposit?

Apples2

I'm completely shocked that none of your friends are prepared to take out a£15,000 loan and give it all to you.!!!

I'm even more shocked that you could even think of abusing your so called friends in this manner in any case.

dealer_wins

The whole point of a 20% deposit out of your own funds is so that the mortgage company knows you wont just walk away if your rental income doesnt come rolling in for whatever reason.

Its the same principal when borrowing for any business reason.

Asking your friends to lend you money is not on, and it seems your friends aren't stupid anyway LOL

Clive_Woody

darrendonald2 wrote: »

Question:

Is it possible to get a personal loan (from anywhere) that does not show up on my credit report so that I can use the personal loan as a mortgage deposit?

I don't want banks to see that I have a loan when I apply for a mortgage or they will not give me a mortgage.

Here's the facts ...

For about eight years I have invested in property. I purchase in town centres so that rental yields are high and (most importantly) I experience very little void periods. The big stumbling block in growing a port-folio is the 20% deposit needed for a BTL mortgage.

This is frustrating because I know that rental yields can easily cover mortgage repayments AND a personal loan, but banks simply won't lend to you if you use a personal loan for your 20% mortgage deposit.

It does work:

I recently bought a £110,000 property and borrowed £88,000 from the bank. I needed to put in 20% (£22,000) which I did so with my own money. Suppose I got a personal loan from HSBC for £22,000, the (actual figures) would look like this;

INCOME

• £1000/month - Rental income I am currently receiving

OUTGOING

• £340/month - Repayments on the mortgage (fixed for 4 years)
• £529.41/month - personal loan repayments spread over 4 years

PROFIT

• £130.59/month (without using my own money)

The only trouble is, if you have an existing personal loan you can not get another mortgage. When you apply for a mortgage, the bank will see that you have a loan on your credit report.

So, the only way to get around this, as far as I know, is to borrow from friends. Banks won't see this. I have asked my friends (who don't plan on buying a property) to take out a loan for £15,000 and give it to me. I would then pay their loan off via direct debit plus an extra £1000 as a thank you. No one wants to do it though

So, back to the question. Is it possible to get a loan (from anywhere) that does not show up on my credit report so that I can use the loan as my mortgage deposit?

Building a potential house of cards.

Don't ask your mates to borrow money for, best way of losing your mates.

Don't get carried away, sounds like it's going well at the moment but there is no such thing as a 'sure thing'. Save up and when you have the cash look for your next purchase. Take you time and keep your friends.

gazman100

Plus you'd almost certainly have to declare (or lie about) the loan on your mortgage application.

_Andy_

No it won't work. No lender will accept a personal loan as a source of deposit.

ch3101

Why don't you consider remortgaging one of your current properties to release some funds?

_Andy_

"The only trouble is, if you have an existing personal loan you can not get another mortgage."

Absolute nonsense

[Deleted User]

darrendonald2 wrote: »

Is it possible to get a personal loan (from anywhere) that does not show up on my credit report so that I can use the personal loan as a mortgage deposit?

Well borrowing from an illegal loan shark won't show on any credit report, but he'll probably shoot your knee caps off if you fail to pay the exorbitant interest!;)

happycamel_2

Remortgage a property you'd paid some capital from or save that £130 a month from how ever many properties you have. The mortgage company want to know you have a stake in the success of the property. Also, I'd caution you against seeing the £130 as profit, it needs to cover building maintenance, any service charges, tax, insurance as well.

pauletruth

that sounds good until interest rates go up factor a 2% increase in interest and see if its still viable the how do you cover the periods when they are empty or need work.

plus its fraud to lie on a mortgage application. go slower and build your empire with your own money.