taking out a loan for deposite for home

Snoop14

whats the advise on getting a loan (if I get it) so that I have a deposit for a home (first time buyer).


I am guessing what I need so thinking of taking a 13000 loan and start repaying immediately, just so its ready for a deposit. if I did how long would I have to leave it before I apply for a mortgage?


thanks in advance

forgotmyname

Your mortgage will probably be rejected if using a loan for a deposit.

Taking a loan to save for a deposit is madness. Your paying interest on that loan and it will reduce the mortgage also.

How long to leave it.. Until you have paid it off. So you may as well save instead.

Snoop14

I have no savings and I have been informed the landlord wants to sell rather than renew contract in march. so thinking of quick options

Candyapple

Snoop14 wrote: »

I have no savings and I have been informed the landlord wants to sell rather than renew contract in march. so thinking of quick options

If you have no savings there are no quick options - you have to find somewhere else to rent.

Gaz83

You're not allowed to use a loan for a deposit. Whether this is enshrined in law I don't know, but lenders won't accept it.

People will try to get around it by saying the money is for a car or something like that, but it's not rocket science for a lender to see that the loan's being used to fund a deposit.

Can't be done - not without lying about the purposes of the loan. And that's risking fraud.

Foxy-Stoat_3

If you have no savings, ie spare income, how are you going to afford pay for the loan?

You should start saving now, maybe a standing order into an ISA or buy Premium Bonds for what the loan repayments would of been, aim for 10% + £2,000 of the purchase price as a minimum.

Good luck

lee111s

It's a no go. Mortgage lenders will see you having been credited with a loan for x amount and miraculously you have a loan for x.

They often require evidence of your deposit such as a savings account statement.

bargainbetty

Ask your landlord to put it on the market as a rental investment property with a sitting tenant, at least to see if he can sell it with you in situ - I'm sure he won't mind who it sells it to or under what circumstances - you can at least ask?

If not, has he properly served you notice of the end of the tenancy? Bear in mind that he won't want it empty until it sells (it can take a couple of months to complete etc, and that's after it sitting on the market for a bit). You could ask him to return your deposit early on the grounds that you will need it for a short notice move, or even ask for a slight reduction on rent for the last couple of months in exchange for a no-argument departure (two weeks notice at minimum).

But no, you can't use a loan for a deposit.