personal loan to buy house in cash

savingfor

Please excuse my naivety asking this question. What's the biggest personal loan I could get based on my income? I would be using the money to buy a house or flat in cash together with savings so repaying the loan should be affordable since I wouldn't be paying rent or a mortgage.

I currently earn around 14K per annum. I know I should try and earn more and get a mortgage, and I'm not averse to this. However I just want to see if there is another way of doing things, that is less dependant on all the stars aligning, especially as I am considering moving abroad and buying there. The conventional route doesn't seem to work that well for me. If I were to earn more, how much could I get? Is there some formula? I'm talking ball park figures.

dealer_wins

£7000, so that will bag a nice shack in Burnley!!

CHR15

Tent in a ball park is the closest you will ever get to this hilarious notion

tell_it_how_it_is

dealer_wins wrote: »

£7000, so that will bag a nice shack in Burnley!!

"Location: Kilburn London". Nuff said!!

simpywimpy

Actually you can't buy a nice shack in Burnley for that price Dealer Wins!!

BillJones

savingfor wrote: »

I currently earn around 14K per annum. I know I should try and earn more and get a mortgage, and I'm not averse to this. However I just want to see if there is another way of doing things, that is less dependant on all the stars aligning, especially as I am considering moving abroad and buying there.

As above, providing you have no other debts, £7k may be possible.

However, if you are moving abroad then lending will be based on the wage in your new job overseas. How much will you be earning there (and could you tell us where you are going?)

booksurr

a personal loan for someone earning £14k will never be for more than you earn.
a personal loan will have an interest rate far in excess of the rate on a mortgage

your idea is a non starter

even if you can buy a "house" in the UK for about £20k, the most likely option would be a "park home" (ie. static caravan) but buying one of them would be stupid as you will lose your money when you try to sell up and furthermore you would live like a pauper because of all the extra costs associated with such "property"

you are not earning anywhere near enough to be able to afford to own property in the UK

chalkie99

booksurr wrote: »

a personal loan for someone earning £14k will never be for more than you earn.
a personal loan will have an interest rate far in excess of the rate on a mortgage

Crazy as the OP's thinking may be, the two statements made above are, at best, an urban myth.

There have always been posts about lenders working to 50% of earnings rule, so many that I accepted that as true, and there have been several on various threads in the last few days.

However, recent experience has shown differently. A family member wanted to apply for an 8k loan on a 7k annual salary (part time worker, no other income) and to add to the problem they are not a house owner. I tried to prepare them for disappointment but stood and watched while they made an online application.

To my great surprise the loan was instantly approved (with their own bank) at the headline rate of 4.5% APR and the money was in their account the next morning.

That 4.5% is actually less than the SVR mortgage rate I have with the same bank.

I'm not suggesting that this applies to the OP or is even a good idea for anyone but others should be aware of the inaccuracies sometimes presented as fact.

Tixy

chalkie99 wrote: »

There have always been posts about lenders working to 50% of earnings rule, so many that I accepted that as true, and there have been several on various threads in the last few days.

I have seen people refer to it as a rule, but I would say it was better phrased as general guidelines, or typically likely rather than a rule.

But I'd say it is more than an urban myth. It is true that for most people it gets harder to obtain credit when they want to borrow more than half their annual salary.

Fishingtime

savingfor

You are either living in cloud cuckoo land or a troll

Gaz83

chalkie99 wrote: »

Crazy as the OP's thinking may be, the two statements made above are, at best, an urban myth.

There have always been posts about lenders working to 50% of earnings rule, so many that I accepted that as true, and there have been several on various threads in the last few days.

However, recent experience has shown differently. A family member wanted to apply for an 8k loan on a 7k annual salary (part time worker, no other income) and to add to the problem they are not a house owner. I tried to prepare them for disappointment but stood and watched while they made an online application.

To my great surprise the loan was instantly approved (with their own bank) at the headline rate of 4.5% APR and the money was in their account the next morning.

That 4.5% is actually less than the SVR mortgage rate I have with the same bank.

I'm not suggesting that this applies to the OP or is even a good idea for anyone but others should be aware of the inaccuracies sometimes presented as fact.

Could you let us know which bank approved this £8k loan? I just want to make sure that I don't have any shares in them.