Should i get a loan as rates are so cheap?

glosoli

danlightbulb wrote: »

I don't have to lie thorugh my teeth no, I wouldn't do that. But I think its fair not to volunteer unneccessary information too. To say the deposit has come from a mixture of savings and debt trade offs over a period of several years would be fair. They'll see the loan on my credit report, but they don't see how my savings have fluctuated over time so its pretty one sided really. In reality, my savings, loans and credit cards will all be balancing off against each other in different combinations over a period of time.

Come on, these things should be straight forward. In several years in the profession of mortgage advising if one of my applicants came out with "debt trade offs" as to where funds came from it would be ringing alarm bells all over the place, what does that even mean?

danlightbulb

glosoli wrote: »

In response to the edits of your above post, people do move money around often between savings accounts and current accounts, however this layering process isn't going to fool a solicitor, if nothing else it will heighten their reasons to dig further and request statements for all of the accounts. At the end of the day all money has a source, and £10,000 isn't going to come into existence through moving money around. Eventually they would come across a credit from Bank PLC of £10,000 on one of your statements, and there would be some explaining to do if the applicant has said they saved it up.

Sure I get that, but how do they deal with a trade off situation?

So lets say I decide to save instead of paying off a CC. Or what if I pay off the CC and then borrow it back again. Its no different.

Or what if I pay the CC off with a loan which then allows me to save?

All that is really happening is money is moving in different directions, using the liquidity available to me.

lovinituk

Lots of mortgage lenders won't accept any matched betting winnings as income and others may be put off by the 'gambling' transactions on your statements. The last thing you want is for them to go digging deeper.

glosoli

danlightbulb wrote: »

Sure I get that, but how do they deal with a trade off situation?

So lets say I decide to save instead of paying off a CC. Or what if I pay off the CC and then borrow it back again. Its no different.

Or what if I pay the CC off with a loan which then allows me to save?

All that is really happening is money is moving in different directions, using the liquidity available to me.

If you pay off your credit card with your savings, you would have zero savings. If you then took a cash advance on your credit card, then the source of funds would be from your credit card and would have to be declared as such on your mortgage application.

From a financial point of view I could not see the benefit of clearing a 0% credit card with an interest accruing loan.

To keep things straight forward - why don't you just apply fir a regular 95% mortgage? You have the deposit required for that just now and avoids this whole smoke and mirrors approach.

danlightbulb

lovinituk wrote: »

Lots of mortgage lenders won't accept any matched betting winnings as income and others may be put off by the 'gambling' transactions on your statements. The last thing you want is for them to go digging deeper.

I won't be saying my matched betting funds are income. Its just that they've helped me save more/faster. The transactions is something I am wary of and I would be stopping the activity 6 months prior to applying for a mortgage.

At the very least, I will be applying for a mortgage with both savings (for the deposit) and credit card debt at 0%. I'm not sure how I would prove that the CC debt wasn't incurred to directly fund the savings account. I have made many balance transfers over the years, both to and from other cards and also to and from my bank accounts. Thats the point I was trying to make, that really, deep down, this is all the same money that is circulating around my various accounts.

Its very silly to say that funds have come from a loan in some situations. If that loan was 5 years ago for example and paid off, then the savings that 'technically' came from the loan would be equivalent to the monthly loan repayments over the same period. The money has still been saved, but just in reverse so to speak.

glosoli wrote: »

If you pay off your credit card with your savings, you would have zero savings. If you then took a cash advance on your credit card, then the source of funds would be from your credit card and would have to be declared as such on your mortgage application.

This seems to be a very 'linear' view point. I consider the way I manage my finances to be much more 'circular' for want of a better word. I manage my finances, including debt, in the way that gives me best value from the various combinations of debt and cash.

glosoli wrote: »

To keep things straight forward - why don't you just apply fir a regular 95% mortgage? You have the deposit required for that just now and avoids this whole smoke and mirrors approach.

The reason I want 90% LTV is that the rates are better and there are more lenders to choose from.

glosoli

How simple or complex the whole thing gets is entirely up to you, however hopefully you will understand that it's a solicitors responsibility professionally to be satsfied without a doubt where the funds came from.

I remember a case not so long ago where the deposit was coming from an applicants relative in Norway in the form of a gift, and they had to go to extreme lengths to verify the identity of the giftor, such as sending passports to the UK and many bank statements and further evidence. At the end of the day if it wasn't obtained then the process was stopped in its tracks.

lovinituk

danlightbulb wrote: »

Its very silly to say that funds have come from a loan in some situations. If that loan was 5 years ago for example and paid off, then the savings that 'technically' came from the loan would be equivalent to the monthly loan repayments over the same period.

But you're not in that situation. You are talking about applying for a mortgage 6 - 10 months after taking out the loan. It's not going to take much digging to unearth that.

If I was you I would stop worrying about some hypothetical argument that is nothing like your real situation.

Go and see a respectable independent mortgage advisor and listen very carefully to their advice.

Richey_

Have you played with affordability calculators on bank websites. Try it, then see how much they will lend you with no debt, £7k of debt and £17k of debt. Be honest with it and put in all bills including your child maintenance costs and see the difference in what they may lend you with and without the debts. A mortgage lender is unlikely to be fussed that the credit card is currently 0%, that will one day end. It's the debt that they will use as a multiple of and then deduct this from your affordability.

Be so careful around fraud, in January for example you wants a "secret" account for gambling that a mortgage lender would not be able to see, now you talk about "grey areas." Any or all of these if flagged could get you a CIFAS marker as well as your solicitor if they flag a concern around your deposit still wanting to get paid their fee...

danlightbulb

lovinituk wrote: »

But you're not in that situation. You are talking about applying for a mortgage 6 - 10 months after taking out the loan. It's not going to take much digging to unearth that.

If I was you I would stop worrying about some hypothetical argument that is nothing like your real situation.

Go and see a respectable independent mortgage advisor and listen very carefully to their advice.

Its very frustrating that I can afford a mortgage right now no problem, but the saving is taking the time. I actually think its quite financially savvy to bring forward the time I can buy a house because in the long run I'm better off. If I was borderline on affordability I could understand the problem with incurring debt, but I have decent headroom. I'm just trying to use the tools available to me to get the best outcome. Believe me I don't intend to bankrupt myself, I wouldn't consider a loan if I was worried about the repayments.

Richey_ wrote: »

... in January for example you wants a "secret" account for gambling that a mortgage lender would not be able to see, now you talk about "grey areas."

I appreciate the warning. All I wanted for matched betting was a bank account that didn't show up on credit reports. As there is no credit being provided by a basic bank account, it seems reasonable that it shouldn't show up. But still. I'm not doing anything illegal, if these mortgage lenders weren't so rigid in their criteria they could see Im actually very financially savvy these days. Learned most of it from here.

glosoli

danlightbulb wrote: »

This seems to be a very 'linear' view point. I consider the way I manage my finances to be much more 'circular' for want of a better word. I manage my finances, including debt, in the way that gives me best value from the various combinations of debt and cash

If you save up funds in an account of some description then this is cash savings.

If you use all of your savings to pay off a loan, and then obtain another loan, then its a loan.

If you do this to maximse returns, or to rob Peter to pay Paul, then that's great, but be prepared for people who work in the industry to take a more linear view as you would call it and process any application accordingly.