House deposit Loan from employer?

ashp_2

AnotherJoe wrote: »

If you had told them, they'd likely hang up the phone since you've seriously misled them on your salary, and on any outstanding loans you have, and on the source of the deposit !!

My employer would give the 7k a year rise purely to repay the loan I would however continue to recieve this after it is repayed so none of current salary would go towards paying off this loan. This is because we currently live in one of my employers houses rent free so if we move out he will give us the 7k a year rise. My boss did explain something about having to do this as a loan or in would come under "benefit in kind" and be liable for some sort of taxes.

I did do the agreement in principle online so I was not able to declare where my deposit was coming from. I did notice based on our current salary they were willing to lend 218000 but I also recalculated it with the 7k a year rise plus adding 550 loan repayment and the amount they would consider lending went up to 258k. But as you said this is probably irrelevant given that they would be unlikely to give us a mortgage based on our deposit source.

I have spent quite a few years trying to prepare a good credit rating we have previously had a 30k loan from our bank paid back at 1200pcm and we have continued to save that amount since it was repayed to try and demonstrate our ability to pay the mortgage.

The general consensus seems to be that this is a bad idea which is very unfortunate as it would of worked out great for us. Looks like we will have to wait a year or so.

getmore4less

ashp wrote: »

The loan would be 21000 and we would make this up to 23000 so we have a 10% deposit.

We obviously have no intention to leave our job (we both work for the same employer) but if this was to happen we would obviously be responsible for paying the loan back to my employer.

I would be looking very carefully at the terms of the loan particularly any clauses for full payment on demand like leaving or being made redundant or company folding.
Could well turn into a trap.

Also very risky 2 jobs and a big loan from the same source.

A loan will likely have BIK issues

That rent free accommodation could have BIK consequences.

How long have you been living rent free?

getmore4less

ashp wrote: »

The loan would be 21000 and we would make this up to 23000 so we have a 10% deposit.

so you have £2k saved up

ashp wrote: »

I have spent quite a few years trying to prepare a good credit rating we have previously had a 30k loan from our bank paid back at 1200pcm and we have continued to save that amount since it was repayed to try and demonstrate our ability to pay the mortgage.
.

Even adding the money for costs that's not long saving at £1200pm

A £25k bonus and no pay rise may be a better option

ashp_2

getmore4less wrote: »

I would be looking very carefully at the terms of the loan particularly any clauses for full payment on demand like leaving or being made redundant or company folding.
Could well turn into a trap.

Also very risky 2 jobs and a big loan from the same source.

A loan will likely have BIK issues

That rent free accommodation could have BIK consequences.

How long have you been living rent free?

We have a great relationship with our employer there will be no clause for demand of payment other than leaving the company. He is just trying to help us get on the property ladder. Without going into to much depth there is no chance of the company folding and hugely unlikely I would be made redundant. My boss said if he gave us the loan and put a little interest on it there would be no BIK issue.

I have lived rent free my whole working life (In my job accommodation is provided free)

We do have more than 2k saved up but there is obviously mortgage costs and we have some money to spend on the house so we have about 8k.

If there was some way we could get the deposit from my boss without it being a loan it could maybe work but I feel if we were to get it as a loan we will struggle to get a lender.

We do also have about 6k in ISA'S but we planned to keep this.

mrginge

getmore4less wrote: »

A £25k bonus and no pay rise may be a better option

Probably not wise if it ends up with the OP in a higher tax band.

ashp_2

mrginge wrote: »

Probably not wise if it ends up with the OP in a higher tax band.

This would indeed move me into the higher tax band

Whistler23

Are you taking into account the tax allowance, pension, childcare vouchers etc

getmore4less

mrginge wrote: »

Probably not wise if it ends up with the OP in a higher tax band.

ashp wrote: »

This would indeed move me into the higher tax band

2 employed and £55k gross between them and high rate kicking in at £80k+ plenty of room for staying within the 20%

That low interest rate has to be at least 3% unless they drop the rate again.

ashp_2

Clutching at straws a little bit here!

I was looking at the government website under relocation expenses and believe I could get 8000 from my employer withour paying tax. I am required to be as close as possible to work due to the nature of my job.

Bit of info from .gov

These are called ‘qualifying’ costs and include:

"the costs of buying or selling a home"
"moving costs"

These are only qualifying when:
"the employee’s new home is reasonably close to the workplace and their old home isn’t"
"For qualifying costs over £8,000, you may have to report and pay tax and National Insurance"

I could recieve the rest as a bonus which I could pay tax on. This means I would not have a loan.

mrginge

You are not relocating.