Mortgage deposit idea

Pixie5740

Chrisubank wrote: »

I struggling to see the harm in doing both.
The cost of borrowing the loan seems insignificant when faced with the fact the government give us a huge return on our "savings" AND we could be paying into our own mortgage rather than paying someone elses.

If you can afford to save £200 a month + make the loan repayments then forget about taking out a loan and just save the £200 + whatever the loan repayments would be as it won't cost you anything to save that money but it will cost you to borrow the money.

If you are still struggling to see the harm in borrowing money to put into a savings account then you need to financially educate yourself before even contemplating getting a mortgage.

DCFC79

Apply for a loan then OP and start looking for a mortgage and see what happens.

Or

Why not try out foxy stoats or Pixies suggestion and if you struggle to put away the extra money along with paying your bills then the idea wont work.

foxy-stoat

Chrisubank wrote: »

I struggling to see the harm in doing both.
The cost of borrowing the loan seems insignificant when faced with the fact the government give us a huge return on our "savings" AND we could be paying into our own mortgage rather than paying someone elses.

Your borrowing £10,000 and paying back over £1000 in interest - assuming you get the best rate. You will also certainly have to lie on the loan application form anyway - purpose of the loan.

If you are able to put away £400 a month then you will of saved up your deposit in just over 2 years.

Still struggling?

foxy-stoat

DCFC79 wrote: »

Apply for a loan then OP and start looking for a mortgage and see what happens.

You havent been reading the OP's posts - he will apply for mortgages in 4+ years after taking the loan out.

DCFC79

foxy-stoat wrote: »

You havent been reading the OP's posts - he will apply for mortgages in 4+ years after taking the loan out.

I have but I worded it wrong and realised it was incorrect when adding to my reply.

foxy-stoat

DCFC79 wrote: »

I have but I worded it wrong and realised it was incorrect when adding to my reply.

Arrrr, so many good ideas on this thread, amazed that this sort of thing hasnt been thought of before.

Chrisubank

foxy-stoat wrote: »

Your borrowing £10,000 and paying back over £1000 in interest - assuming you get the best rate. You will also certainly have to lie on the loan application form anyway - purpose of the loan.

If you are able to put away £400 a month then you will of saved up your deposit in just over 2 years.

Still struggling?

I'm not sure which decade you got your mortgage in. Today, in Feb 2016 £9600 doesn't even come close to a deposit!

Strummer22

Chrisubank wrote: »

£1292 / 60 months = £21
So over it will cost me £21 per month, to pay in £400 to the help to buy ISA, Govt will give us 100 per month. £79 per month profit?

15k will allow me 36months of payments. So 36x £79 = £2844.

That shaves many months off of the saving process.

It's only £79/m profit if you otherwise couldn't afford to put any money into the HTB ISA.

Pushing your earnings up in the other direction, though, is: you can get interest in a bank account on the balance of your loan that isn't in the ISA yet. 3% from Santander 123, for example.

But I don't know what would happen when you come to get the mortgage. Ideally you'd have none of the loan debt left. And I have no idea how a lender would react if they asked you about the loan you've now paid off, and you said you'd used it to do a form of stoozing. It's legal, and you'd no longer carry the debt when applying for the mortgage...

EDIT: and you do have to state what you want it for when you apply for a loan! Lying on the application is fraud. Try credit card stoozing instead if this is the sort of thing you have in mind - you don't have to state what the money's for.

foxy-stoat

The big question is, are you able to borrow £15,000 over 5 years at the best interest rate or not?

Go and apply for the loan and report back once you have completed the application form and got the money in your bank.

By the sounds of it you want to borrow £15,000 now, just to pay in £400 a month into the ISA - less £271 a month you will have to pay to service the loan.

Why not just find the extra £129 and pay £400 into the ISA.....Unless you want to invest the remaining £14600 on month one into a savings account that pays 1.25% interest - so about £15.21 interest, then on month 2 withdraw another £400 to pay into the ISA and so on.

Oh and on month 1 the interest on the loan will be £61.25 not £21.

foxy-stoat

Chrisubank wrote: »

I'm not sure which decade you got your mortgage in. Today, in Feb 2016 £9600 doesn't even come close to a deposit!

Got mine a few years ago - depends on where the house/flat you want to buy and if you can get a HTB 95% mortgage. £10,000 deposit may all you need to save.