Deposit from a loan?

bflare

Hello & sorry if this has been asked before. I am a 39 year old male whos been renting privately for 5 years. I was relatively happy renting until I calculated that I have paid over £30,000 in rent over the last 5 years for a one bedroom flat. Also because I have a 10 year old son who stays on a weekend the flat is now too small. So, my plan for this year was to look into buying my first property but I have absolutely no savings for a deposit. I have searched the net regarding using a loan as a deposit & it appears to be a no no. Is this the case even though I have absolutely no problem paying back the loan plus the mortgage. I have had a loan for the last 4 years & it is due to run out this year so I will be getting a new one anyway to replace my car so what would be the problem If I just used some of this loan for a deposit? I have had a AIP from Barclays & this took into consideration my outgoing debts so Why would they be an issue? Thanks.

Pixie5740

You need to have some skin in the game.

Your solicitor will also (probably) be acting on behalf of the mortgage lender. The solicitor will need to carry out money laundering checks so (s)he will find out the source of the money.

If you can afford to repay a loan could you not just hold off buying a new car and rather than taking out a loan save the money instead until you have a 5% or 10% deposit plus solicitors fees plus surveys....etc?

Pixie5740

That said I think Santander do allow you to use a personal loan as a deposit if you can meet affordability.

If you have family who could help you out then Barlcays Springboard mortgage might be an option.

bflare

Pixie5740 wrote: »

That said I think Santander do allow you to use a personal loan as a deposit if you can meet affordability.

If you have family who could help you out then Barlcays Springboard mortgage might be an option.

Thanks for your reply. I was considering trying to save up for the deposit instead of getting a new loan but it's just the time scale & my current car is probably not going to last much longer.


I googled Santander & I found an article saying that they do allow loans as a deposit. They just factor it into affordability. I ran a online check & it came back saying they could borrow me what I need.

ACG

There are a couple of lenders where it fits criteria, but fitting criteria and passing the credit check/affordability etc can be worlds apart.

[Deleted User]

bflare wrote: »

it came back saying they could borrow me

Well, as long as they give you back when they've finished with you.

bflare

ACG wrote: »

There are a couple of lenders where it fits criteria, but fitting criteria and passing the credit check/affordability etc can be worlds apart.

My credit rating is pretty good & after paying all my bills, child maintenance etc I still have £400 a month disposable income & that includes my current loan of £225 a month. Does this sound like I would be in a good position? Thanks.

bflare

Deleted_User wrote: »

Well, as long as they give you back when they've finished with you.

hahaha depends how useful I am

Neutrinno

bflare wrote: »

My credit rating is pretty good & after paying all my bills, child maintenance etc I still have £400 a month disposable income & that includes my current loan of £225 a month. Does this sound like I would be in a good position? Thanks.

Ignore the credit rating it means nothing, each lender scores you differently so it's the information on the report that is important. Have you ever had any arrears, defaults, CCJ's, IVA's/bankruptcy etc?

You will be treated as high risk by the lenders if you are applying with a 5% deposit.

laidbackgjr

bflare wrote: »

My credit rating is pretty good & after paying all my bills, child maintenance etc I still have £400 a month disposable income & that includes my current loan of £225 a month. Does this sound like I would be in a good position? Thanks.

It sounds ok - but if you have £400 spare income each month - how come you have no savings? If you could save this spare £400 a month then you'd have a pretty good deposit in a couple of years.

bflare

Neutrinno wrote: »

Ignore the credit rating it means nothing, each lender scores you differently so it's the information on the report that is important. Have you ever had any arrears, defaults, CCJ's, IVA's/bankruptcy etc?

You will be treated as high risk by the lenders if you are applying with a 5% deposit.

I have had no CCJ's, bankruptcy. I had a default to a mobile company from around 10 years ago but that's now statute barred. I have no idea what a IVA is?