I would like to borrow some money!

stevebrown1982

Hi,
I think I know the answer but I thought I'd try here before giving up!
My wife and I would like to buy a house and with our savings, ideally we would need another £35,000 deposit to get the house we want. Our circumstances have improved in the last few years and we have cleared all of our credit cards, paid off the cars and uni debts and now have disposable cash each month yet we don't have the deposit to put down on a house.
Ideally I would like a way of borrowing some money without it showing on the credit report as if I had the cash, the bank has agreed they would lend me the money. Without the cash (deposit) they will not.
With our current situation I could happily pay back £40,000 over the next 5 years on a £35,000 loan but even peer to peer lending seems to put a register on your credit file.
Other than asking family for money, which they don't have this much, is there anyway of securing this money so the banks don't see it as a loan and therefore I could get a mortgage?
If there is no way, then we'll just have to wait a further 5 years to save the deposit but wanted to exhaust all avenues before putting this to bed.
Any suggestions greatly appreciated.

DCFC79

I don't believe there is a way of doing what your after.

Whether you can get the £35k loan depends on the salaries involved.

Pixie5740

If you want credit then it will show up on your credit files. Not only this but mortgage lenders will not accept a borrowed deposit and since your solicitor (who also works for the mortgage lender) will need to know the source of your deposit then the mortgage lender will know if it's borrowed or not.

dealer_wins

The whole point of a deposit is so that you have a financial interest on keeping up the mortgage payments and the state of repair of your home.

You cant borrow a deposit, either from finance companies or family.

If you could "Happily pay back £40000 over the next 5 years", then with a savings blitz you would have a sufficient deposit in under 3 years. Save like a madman for 3 years!!

And who knows your house could be £50K cheaper in 2018, the market is a bit high at the moment.

sxcizme3010

You cant borrow without it showing on your credit file unfortunately. You can however borrow a deposit from a family member as I did. The solicitor will ask where it came from and we just said savings - that was sufficent enough and we got our mortgage :-). I however agree with advice that has been given. Just save up for it - itll be worth it in the long run :-)

CHR15

If you could borrow 35k without a single trace, nobody would have a credit file. everyone needing to borrow would be borrowing from them

David301

Purplesky_2

Not only is this totally impossible, it's impossible for a very good reason. To protect you. Yes, it's frustrating having worked so hard to get out of debt and feel like you have nothing to show for it. But you know what would be worse?
Getting another loan so that you can get yet another (huge) loan, and then fighting your way out of that, only to find that the huge loan cost you 1.25-2 x the value your property was when you bought it and the property might still be the same price. I assume that you're looking at a 5-10% deposit there. Maybe not.

This is due to an effect called levered losses.
You own 10% of a thing and you have a loan on 90% of it. the price drops by 10%. You now have no 'ownership' of the thing, but you have use of it, and you can keep paying the loan, and eventually you might get some ownership back. Or the price of the thing drops again.
Now, not only have you lost all your money in the thing, you've also got to find the money from somewhere else to pay the loan (And fees for it to be sold by someone, a solicitor to conduct the transaction because it's a high value thing) and you still have to find a place to live on the other side.
The price might rise (and it probably will, but until it does, you're stuck), and you get the balance.

Also, giving yourself time for some of your history to fall off will affect the rate you get offered for your mortgage: a not unimportant consideration. The time spent saving is working for you two ways!
Moreover, please consider the fact that you will have to pay for solicitors fees, stamp duty, moving costs, insurance(s), furniture, appliances, repairs, mortgage and surveyor fees, possibly a mortgage broker etc etc etc £35k does not necessarily contain all that.

Finally, good luck buying a home. It is extremely rewarding, and definitely something to work towards.

stevebrown1982

Cheers for the feedback and certainly backed up my original thoughts.

Knowing that you can borrow from family to secure a deposit and this doesn't show up anywhere to prevent a mortgage being given demonstrates to me - in simple terms - that there is a way around it (if only my family had the cash to loan!)

I considered looking at peer to peer from the point of view that it's not all that different from 'a friend' loaning money and if it's a friend there may be a way round the credit agency - even if I pay back slightly more - ultimately I would be saving more than I'd be paying in extra repayments by not having the rent and saving at the same time.

But it's back to plan A and saving like a madman as suggested earlier in the post.

I appreciate the extra costs, we have a savings pot already for this, the £35k was the shortfall.

Thanks again

Purplesky_2

Actually, you're not allowed to have a loan from friends/family either. You have to have a letter stating that it's a gift. That's a hell of a gift.

Herzlos

There's no legal way round it. You'd need to either get an unregulated loan or make a fraudulent submission.

Friends or family can gift you it (with a letter stating they don't want it back, and it being involved in any estate should they pass away within 7 years). So you can ignore the temptation of getting a family member to borrow the £35k and give it to you, unless they are also going to be making the repayments.