Would a mortgage application fail if funded by a loan?

sugarbabe84

I've started closing my various other accounts and collecting funds from these to put into my one HSBC account which I will concentrate on.

I registered to go on the electoral roll in Lambeth which is where I live now.

I've also decided to invest in Lloyds shares, hoping they will go up over the next 6 months.

I opened 0% balance transfer credit card with Asda, this has wiped off the 1k in my HSBC credit card, so I will be closing that one. Can anyone tell me how the Asda credit card will impact the mortgage assessment? Considering it 0% on balance transfers.

I'm planning on putting £500 in my savings account in feb. Another in march so I'm hoping by the time I apply for the mortgage, I would have laid down 1500 from my own pocket and then the rest would come from a loan.

I want to submit the loan application in Feb and if successful, perhaps the mortgage application in May.

sugarbabe84

kingstreet wrote: »

So what's the purchase price of your 25%?

What's the rent on the unowned 75%?

What's the monthly loan payment?

As an example, if you earn £23k, with £200 rent and £200 loan, the most the best-known SO lender will give is £61,268 over 30 years.

Often SO is more about affordability as the rent is treated as an expense, as is your other credit.

The total monthly cost would be 973. Rent + mortgage + service charge.

25% share worth 68k

Please tell me what you think of my plan, in post above.

Din85

The lender won't know that the Asda card is 0% on your balence transfer, it will make no difference at all.

All I know is, when I spoke to a broker, I was told the deposit must be from my own pocket, or a gifted deposit by a family member that has no interest in having the money repaid (this is the case for me).

Absolutely no borrowing for a deposit.

kingstreet

I need to know the rent, the loan payment and any other credit or other commitments you have, such as childcare, student loans or maintenance.

The mortgage payment and service charge are irrelevant to the affordability calculator.

TBH on your previous post, you are fiddling about, but I'm not convinced about overall affordability and that is a far bigger issue. Buying shares is a risky thing at the best of times, even with money you are prepared to lose. What happens if the value drops, just as you need the money?

sugarbabe84

kingstreet wrote: »

I need to know the rent, the loan payment and any other credit or other commitments you have, such as childcare, student loans or maintenance.

The mortgage payment and service charge are irrelevant to the affordability calculator.

TBH on your previous post, you are fiddling about, but I'm not convinced about overall affordability and that is a far bigger issue. Buying shares is a risky thing at the best of times, even with money you are prepared to lose. What happens if the value drops, just as you need the money?

Fortunately I don't have any children . I'm just a single person trying to get my own place . Had enough if sharing and yet paying £700 a month.

The loan repayment would work out at £200 a month.

The rent is £468.

Yep, I'm just going to let my shares sit for a while. Lloyds isn't paying dividends yet anyway

jamesml

I'll be amazed if this goes through to be frank. 0% on BT's is great for saving you interest but is going to make no difference to an UW.

If you are able to pay £500 chunks off your existing debts recently and over the next few months then stick with that for another couple of months. Restructure your finances to save you interest if you can, and make sure you put the interest savings into your savings accounts as well.

As for shares, I can't see why you are bothering right now to be absolutely honest. You should only invest money in shares you can afford to lose - and right now you can't afford to lose that. I would have thought you'd be better off getting it paid off your debts and saving you interest, or sat in your savings accounts.

So far you've shown no ability to save towards this deposit - suck it up, save your backside off and then go for it when you are in a good financial position. Even 6 months sounds like it could put you in a much better position. 6 months isn't a long time and you'd be better off with 1 successful application then a decline now and having to answer yes to the 'have you ever been declined before' question later on when your finances are in better shape anyway.

Just my 2p - I'm no expert by any stretch. Sorry if its not what you want to hear right now.

kingstreet

sugarbabe84 wrote: »

The loan repayment would work out at £200 a month.

The rent is £468

On a salary of £23,000, the best-known lender in shared ownership, Leeds Building Society will lend you no more than £27,500 (over 35 years) with rent and loan payments totalling £668 per month.

This proposition is not affordable.