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taking out loan as deposit for house

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Legacy_user
Legacy_user Posts: 0 Newbie
in House buying, renting & selling
Hi

Could I please ask advice on how best to go about taking out an unsecured loan as the deposit for a house please?


Also could I politely ask people don't jump on me as I know this approach is not the established wisdom but it has got my friend on the property ladder and I am getting older and running out of time.

Whilst this might not be the cheapest way of doing this it might be my only way.

I am aware that people will be able to read my previous posts so there's no need to try and "catch me out". I realise my finances are in bad shape. I don't need it pointing out. I remember when MSE was a non-judgemental site.

Happy to answer questions that will help people to give me the right advice.

Thanks in advance

AoB
«1

Comments

  • da_rule
    da_rule Posts: 3,618 Forumite
    Sixth Anniversary 1,000 Posts
    What exactly is it you want to know?

    If you want to take a loan out, you apply to a lender and get the loan. If they ask you what it is for then you tell them the truth.

    Obviously this may cause problems with the mortgage in relation to affordability.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Apply for one and find out. Sometimes there's nothing better than experience to learn at first hand.

    A lenders view is going to be unsurprisingly negative. A rejection is highly possible. If the deposit comes from such a source.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    It's not so much that the approach is not "established wisdom" as much as the majority of mortgage lenders will not accept a borrowed deposit.

    You also have the issue of finding a lender willing to give you a loan for the purpose of purchasing a property.
  • HampshireH
    HampshireH Posts: 4,938 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    If your friend has done it and then successfully got a mortgage it sounds like they may be the best person to speak to.

    Results may differ depending on how similar your money management has been
  • Bass_9
    Bass_9 Posts: 151 Forumite
    Did your friend lie to the lender? It would be interesting to hear what approach they took.
  • RubyHouse
    RubyHouse Posts: 60 Forumite
    Second Anniversary 10 Posts
    It is certainly not the done thing but I do also have a friend who bought a house this way.
    They borrowed £10K from the bank towards their deposit and also made use of the help to buy scheme.
    They had no other debts, a clean credit history and zero dependents. The total was a low income to loan value to this also worked in their favour.

    You could always check out your incomings / outgoings and see how this would look to the bank?
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    can you afford the repayment both from the loan , your debt and the mortgage, it is all based on affordability.


    Hit the debt free wannabee forum to hit that debt
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    Ashamed_of_Bristol wrote: »
    I realise my finances are in bad shape. I don't need it pointing out.
    Is your signature accurate, as to your current financial position?
  • Penelopa.Pitstop
    Penelopa.Pitstop Posts: 1,166 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It worked for my friends. Took loan 3-4 months before mortgage. Then declared the amount as savings, no one questioned it.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Penelopa.Pitstop wrote: »
    It worked for my friends. Took loan 3-4 months before mortgage. Then declared the amount as savings, no one questioned it.
    I assumed the question was "can it be done legitimately", not "can I get away with mortgage fraud".
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