Mortgage deposit idea

ReadingTim

Stu_N_ wrote: »

I still think the main issue is: either you'll have to lie on your loan application to get it approved, or a lender/broker will think what you did was 'weird' and refuse to help you get a mortgage.

Much safer and more profitable using credit cards to stooze.
1) You can borrow on cards at 0% - you were looking at a loan at 4.9%!
2) You can do a money transfer from a credit card (so it's like a loan) for a one-off fee of under 2%.
3) You don't have to tell the credit card company what it's for.

Stoozing will have its own risks - increasingly large balance transfers (even with the old credit card account closed) will leave traces on your credit file which may make the mortgage provider nervous, somewhat negating your efforts.

And that's what it's all about really: effort, risk and return.

Yes, it's perfectly possible to extract a marginally higher rate of return if you're willing to accept the risk and put in the effort to research the products, operate within the T&Cs, observe the necessary deadlines and game the rates to your advantage. But how small is that advantage, how slim your margin, and is it worth the time, effort and risk?

Many people conclude that it is not, which is why they tend not to bother, but by all means put your money where your mouth is and go for it. Please let us know how you get on, as success stories seem a little thin on the ground, yet I'm sure there are lots of successful punters out there keen to demonstrate that 'they told us so'. Until then, such ideas tend to fall into the "get rich quick" category of [STRIKE]scams[/STRIKE] schemes.

Strummer22

Chrisubank wrote: »

The reason for my loan is "Home improvement" might be stretching the through, but its not dishonest!

This gets a LOL from me. Clever thinking! Still might not stand up to scrutiny.

Chrisubank wrote: »

Barclay card are offering me 5k balance transfer until November at 0%.

5k would pay for the first 6 months of this scheme. So you are 100% correct.

600 profit in month of the scheme.
Then 500 for the remaining 5 months until the Barclay card money runs out.

The fee for a 5000 transfer is 2%? So thats 100.

Leaving 1k profit, after I've repaid the 5k barclaycard "loan"

You are a genius!

Not sure we're on the same page. A balance transfer is not the same as a money transfer. Barclaycard will transfer an existing balance from a card onto theirs, but won't transfer cash into your account. You'll need an appropriate Virgin Money or MNBA card for a money transfer, I think they're the only two lenders who do it.

mrsp1987

Chrisubank wrote: »

The main issue with my suggestion, which ReadingTim pointed out, is if the Govt change the policy. I'm guessing that isn't going to happen. We aren't due a government change within the timescale I'm talking about!

It doesn't matter if we're not due a change of Government anytime soon. There is also the possibility that the Govt might just go, 'Nah, don't want to do this anymore,' and just pull the plug. Plus with the Govt we've got at the moment I wouldn't trust them with Monopoly money.
There is also the, slim I will grant you, chance of a Vote of No Confidence in the Government which may trigger an unexpected early election.
Just because it's unlikely doesn't mean it can't happen. You need to be aware that not everything will remain the same for the course of the loan.

CLAPTON

seems to me to be the basis of a good idea

I haven't put the numbers into a spreadsheet to see the actual gains but I would guess the returns are pretty good.

Thrugelmir

Chrisubank wrote: »

The interest on the loan, 4.9% for example, is minuscule compared to the return on the ISA.

As a non-homeowner what are the odds of borrowing at that rate on an unsecured basis?

Chrisubank

Thrugelmir wrote: »

As a non-homeowner what are the odds of borrowing at that rate on an unsecured basis?

No idea.

Using the eligibility calculator on this website. 1 option suggests 90% eligibility. Another 9 suggest 70%. All 3.3% APR.

I'm going to do some reading on this "stoozing"

If I find some "money transfers credit cards" then I'll repay them before the end of their offer.

Presumably its only going to look good our credit files if we are borrowing more and paying it back fully?

Chrisubank

Currently looking at a Virgin Money 38 month balance transfer card.

Anyone else have one of these?
Any idea the sort of credit limits available?
I cant seem to find any info after 5 minutes of googling.

It seems there is a 60 day limit to transfer to our current account too.

Gaz83

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!

Our deposit was £6,000, in December 2013.

Chrisubank

Gaz83 wrote: »

Our deposit was £6,000, in December 2013.

Which part of the country is this in?

I know here in central London we are likely to get a fairly basic 1 bed apartment for a 32k deposit. 450k ish.

Still, we will be saving about 1k per month just by mortgaging rather than renting.
That is before you add into the property value increasing every year.

Damn I wish we never started renting in the first place! If only life were different eh?

Gaz83

Chrisubank wrote: »

Which part of the country is this in?

I know here in central London we are likely to get a fairly basic 1 bed apartment for a 32k deposit. 450k ish.

Still, we will be saving about 1k per month just by mortgaging rather than renting.
That is before you add into the property value increasing every year.

Damn I wish we never started renting in the first place! If only life were different eh?

I stay in Falkirk, in Central Scotland.