Loan for deposit for mortgage?

danlightbulb

glosoli wrote: »

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.

About 4 years ago was when I got off the mortgage with my ex during the divorce process.

I think the point was not that I couldn't get a 95% mortgage, but that with 5k deposit that only gets me a 100k house which doesn't get much. With a 7k loan on top I would have a 12k deposit which would get me a 120k house at 90% LTV.

I shall get more advice I think, from additional brokers.

Yes, Santander was the one he mentioned. I actually bank with them, so maybe could enquire direct.

Keith99

danlightbulb wrote: »

About 4 years ago was when I got off the mortgage with my ex during the divorce process.

I think the point was not that I couldn't get a 95% mortgage, but that with 5k deposit that only gets me a 100k house which doesn't get much. With a 7k loan on top I would have a 12k deposit which would get me a 120k house at 90% LTV.

I shall get more advice I think, from additional brokers.

Yes, Santander was the one he mentioned. I actually bank with them, so maybe could enquire direct.

If you saved an extra £1k you could get the 120k house with 5%

danlightbulb

Are there any types of 5% mortgages I should specifically ask about? I was under the impression that government schemes meant jacked up rates. Has this changed?

glosoli

In my opinion its worth avoiding government shared equity schemes if at all possible however there are regular 95% mortgages available if you google it. Most have less than 4% introductory rates too.

Thrugelmir

danlightbulb wrote: »

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.

Maybe so. However your LL is responsible for the property maintenance, building insurance etc. That's money you are going to have to find.

danlightbulb

Thrugelmir wrote: »

Maybe so. However your LL is responsible for the property maintenance, building insurance etc. That's money you are going to have to find.

I've been saving £300 to £400 per month for the last year plus, so affordability isn't an issue I don't think. It's just the time it takes to save up a 10% deposit on something half decent. Being stuck renting when I could be paying off my own mortgage.

That's why I think it's silly they don't do 100% mortgages any more. If the affordability is good then the risk of doing so is no worse than a 95% mortgage.

FairyPrincessKimberley

I have just done HTB govt scheme and the rate i got was 2.24% no fees and £500 cashback!? so could be worth your while looking into whats available for your situation?

danlightbulb

Guys just resurrecting this as I have been reading round the forums a lot recently and have been realising that perhaps I am much closer to being able to buy a house than I previously thought.

I have had a play with some mortgage calculators on a couple of banks websites.

As it stands right now I have £8k credit card debt and £5k savings. But I could increase my credit card debt significantly and use that cash as a deposit, it seems.

If I put my salary plus £5k cash plus £8k debt into HSBC I can get a mortgage of just £45k (90% LTV).

If however I put in my salary plus £20k cash and £23k debt I can get a mortgage of nearly £150k. Effectively this would be me borrowing an additional £15k deposit from credit cards. I didn't expect this to be possible.

In conjunction with a good HTB scheme like the poster above has obtained (if I am eligible), this looks like a real option now.

What do I do now to find out more detail on the potential for this option? Is it independent mortgage advisor time?

kingstreet

HTB Mortgage Guarantee no longer exists.

HTB Equity Loan is for newbuilds only. You have to satisfy the Government affordability and lender affordability calculators.

Have you taken the £15,000 card debt into consideration in working out mortgage affordability? Many lenders will take £750 a month (5% of the balance into account) and reduce your mortgage borrowing power accordingly.

danlightbulb

kingstreet wrote: »

HTB Mortgage Guarantee no longer exists.

HTB Equity Loan is for newbuilds only. You have to satisfy the Government affordability and lender affordability calculators.

Have you taken the £15,000 card debt into consideration in working out mortgage affordability? Many lenders will take £750 a month (5% of the balance into account) and reduce your mortgage borrowing power accordingly.

So there is no HTB scheme I can use on a non new build house?

I was using the £20k deposit (+£15k credit card debt) as an example of the effect on what I can borrow using a simple calculator. In practice I have options here. I could go for a 5% LTV at £10k deposit and can't see a problem with the additional £5k credit card debt affecting my affordability too much.