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Loan for deposit for mortgage?
danlightbulb
Posts: 950 Forumite
I've been to see a mortgage broker today. I don't have much deposit, just 5k, but otherwise my salary and credit history is very good.
He suggested that there were a couple of mortgage companies that are willing to accept a bank loan used to fund the deposit. With a 7k loan on top of my 5k savings, that would mean a 10% deposit on a 120k house. Which is better than a 5k (5%) deposit on a 100k house.
I didn't think this was possible, so I thought I'd see what you guys thought about the option?
A 108k mortgage was coming in at about £440 and a loan over 6 years would be about £120. combined, that's the same as I'm paying in rent anyway.
He suggested that there were a couple of mortgage companies that are willing to accept a bank loan used to fund the deposit. With a 7k loan on top of my 5k savings, that would mean a 10% deposit on a 120k house. Which is better than a 5k (5%) deposit on a 100k house.
I didn't think this was possible, so I thought I'd see what you guys thought about the option?
A 108k mortgage was coming in at about £440 and a loan over 6 years would be about £120. combined, that's the same as I'm paying in rent anyway.
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Technically possible.
Practically in your case I suspect it won't work due to scoring.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Could you not use one of the government schemes to improve your LTV?0
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My understanding was that you cannot take out an unsecured personal loan agreement for the purpose of purchasing a residential home, as any loan used to aid in the purchase a residential home much be covered by mcob rules... may be wrong though0
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My understanding was that you cannot take out an unsecured personal loan agreement for the purpose of purchasing a residential home, as any loan used to aid in the purchase a residential home much be covered by mcob rules... may be wrong though
That's what I also thought. But the broker said a couple of mortgage companies have been specifically promoting this option to him in the trade.0 -
danlightbulb wrote: »No I'm not a first time buyer. Had a mortgage before when I was married.
What about my scoring would make it not work for me? The mortgage broker (connells) seemed to be fairly confident about it.
Im certain some of the gov schemes will still be valid for you..."I want to die peacefully in my sleep like my grandfather, not screaming in terror like his passengers."0 -
Can I ask when you last had a mortgage? There are a few companies I can think of who can do 95% mortgages aslong as you have not had a mortgage in the last twelve months, and the rates are competitive too.. seems better than this proposal being suggested, presumably these lenders promoting risky scenarios have higher interest rates to boot.0
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danlightbulb wrote: »No I'm not a first time buyer. Had a mortgage before when I was married.
What about my scoring would make it not work for me? The mortgage broker (connells) seemed to be fairly confident about it.
You don't have to be a FTB.
Don't get us started on Connells!I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
danlightbulb wrote: »That's what I also thought. But the broker said a couple of mortgage companies have been specifically promoting this option to him in the trade.
You can use loans for deposits. There are some lenders that accept this. Even a couple of main stream lenders (Santander & HSBC).0 -
You can use loans for deposits. There are some lenders that accept this. Even a couple of main stream lenders (Santander & HSBC).
This.
Would also be weary of Connells.I am a Mortgage & Protection Broker
MSE doesn't check my status so you have to take my word for it. Any information posted is for discussion only and should not be seen as advice. I am FCA Registered, registration details available on request.0
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