Loan to top up mortgage deposit?

dazanteney4

Hello,

My dad had an interesting idea and i wasn't 100% sure if it could be done so i thought id ask.

We are first time buyers, i have no debt against my name and my partner has a small £80 loan with two years left. Could we take out a loan for around £3500 to top up our mortgage deposit? Or would the mortgage people reject you straight away for taking this out before getting a mortgage? I'm pretty sure i would get the loan no problem.

jacobtheamish

The loan would be a monthly commitment, so it would reduce the mortgage amount the lender would offer you.
If you can not raise the deposit through saving, a gift or some sort of government scheme. Then you are not ready to buy at the value you are considering.

dazanteney4

jacobtheamish wrote: »

The loan would be a monthly commitment, so it would reduce the mortgage amount the lender would offer you.
If you can not raise the deposit through saving, a gift or some sort of government scheme. Then you are not ready to buy at the value you are considering.

The amount we can borrow is around the £180k mark where as what we want to borrow is only £130k.

saverbuyer

has a small £80 loan with two years left.

Seriously?

Foxy-Stoat_3

saverbuyer wrote: »

Seriously?

I dont think they borrowed £80 over 2 years, its probably £80 a month with 2 years left.

jacobtheamish

Lenders do not like it, they will see that your deposit is from a loan and likely reject your application on that basis. Why can you not save up for the deposit, are your current living costs that high?

dazanteney4

Foxy-Stoat wrote: »

I dont think they borrowed £80 over 2 years, its probably £80 a month with 2 years left.

That is correct.

dazanteney4

jacobtheamish wrote: »

Lenders do not like it, they will see that your deposit is from a loan and likely reject your application on that basis. Why can you not save up for the deposit, are your current living costs that high?

Where i live now is costing me to much, it currently costs me over £120 a week to get to work. If we moved this would go down to nothing as i could ride my bike.

Foxy-Stoat_3

jacobtheamish wrote: »

Lenders do not like it, they will see that your deposit is from a loan and likely reject your application on that basis. Why can you not save up for the deposit, are your current living costs that high?

You don't need to say where the deposit came from....if quizzed you could always say you just took the loan out to buy a new-secondhand car.....as long as you earn enough for the level of mortgage you require and can afford the repayments ok I can't see them rejecting if all the sums add up.

GMS

Foxy-Stoat wrote: »

You don't need to say where the deposit came from....if quizzed you could always say you just took the loan out to buy a new-secondhand car.....as long as you earn enough for the level of mortgage you require and can afford the repayments ok I can't see them rejecting if all the sums add up.

Otherwise known as mortgage fraud.

Solicitor will need to confirm the source of deposit so even if you got an offer on this basis it would be likely to be withdrawn.

Lying on a mortgage application could mean issues with credit for years to come.

Foxy-Stoat_3

Really?

If I had saved say £20,000 in a savings account for a deposit over a number of years and took out a loan for £3500 to buy a car then applied for a mortgage a few months later with £23,000 deposit....thats mortgage fraud?

I wasn't asked where my deposit came from when I took my mortgage out....have things tightened up in the last few years?

Its not as if the OP has zero money and took out a loan for all the deposit, the OP has saved a good chunk (guess)