Broker recommendations and saved vs part loaned deposit

katep23

Firstly, I know that we need to speak to a broker and am happy to do so but am after any recommendations. We don't know anyone locally who has bought a house recently so word of mouth is out

We are looking for a high value high LTV mortgage and are in Berkshire (near Reading) - can anyone recommend a broker?

The second part of the question is more to get a general idea, although I know a broker will ultimately be able to tell us I would just like to get some thoughts on this.

We currently have a 5% deposit; if we borrowed additional money to make the deposit up to 10% I appreciate this would be taken into account under MMR - this could potentially reduce our mortgage by £500 per month which would offset the affordability of the mortgage.

When taking into account loaned deposits, would a lender offset the savings in mortgage against the cost of repaying the loan?

By the way, the loan would be from family and would be declared as a loan rather than borrowing from a bank.

ethank

Lenders generally do not like people lending money to increase their deposit. Especially from family members, it creates an interest in the property and they are not party to the mortgage.

I take it that the family member is not expecting any security in exchange for their loan?

katep23

It's something we are looking into at the moment so I'm just trying to find out if it is even possible. If it happened, there would be no security.

ethank

As far as I am aware there are not many lenders that will accept loaned deposits - you may wish to try Santander.

You are not going to get any lender to offset the payments of the loan against mortgage interest. I would not even ask them, you are essentially telling them that you cannot afford the mortgage and the loan.

The very fact that you are lending part of your deposit makes you higher risk, expect your affordability to be challenged, potentially higher APR etc.

katep23

Sorry as I wasn't clear.

My point was that the loan repayments will be taken into account when working out affordability.

Say the mortgage with loan is £2,500 with £500 to be repaid or the mortgage without the loan is £3,000 - would this be viewed equally in terms of affordability?

ethank

Thank you for clarifying. I would assume that once you will tell the lender that you have a loaned deposit, they will ask you how you intend to repay the loan, and take that into account.

katep23

Thank you, so it's not a complete no but it would be better if we had 10% saved by the sound of it.

Regarding the mortgage broker, does anyone have any recommendations?