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Deposit issues - loan?

Please help- we have had an offer accepted on a property, we have got the 5% deposit we need and have had an agreement in principle on a mortgage - this lender is happy for us to top up our deposit with funds from a loan - we are struggling to find a lender happy to lend us the extra money we need. Does anyone know of any lenders who will approve the loan for this purpose Can anyone help with this? Thanks in advance!
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Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Why do you need to top up your deposit? If the lender will advance you the amount that you require.
  • System
    System Posts: 178,227 Community Admin
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    We only have 5% and they won't quite lend us the full amount we need, sorry did not word correctly in initial question.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • bengalknights
    bengalknights Posts: 5,021 Forumite
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    I would suggest going to a broker it seems your mortgage offer is less than what you require and if you take out a loan it could backfire on the decision in principle stage.
  • System
    System Posts: 178,227 Community Admin
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    We have already gone through a broker, he has organised the agreement in principle but we need to secure the loan , so just need the name of a lender who will loan money for this purpose
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • BikingBud
    BikingBud Posts: 2,251 Forumite
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    Hlw23 wrote: »
    Please help- we have had an offer accepted on a property, we have got the 5% deposit we need and have had an agreement in principle on a mortgage - this lender is happy for us to top up our deposit with funds from a loan - we are struggling to find a lender happy to lend us the extra money we need. Does anyone know of any lenders who will approve the loan for this purpose Can anyone help with this? Thanks in advance!

    Hlw23 wrote: »
    We only have 5% and they won't quite lend us the full amount we need, sorry did not word correctly in initial question.

    You either have the required deposit or you don't.

    I read this as you cannot afford to cover the offer you have extended, please advise otherwise if I am missing something.

    Seems like you're over committed and cannot really afford the property:(
  • SpiderLegs
    SpiderLegs Posts: 1,914 Forumite
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    Could you not just find a cheaper house? You can’t afford this one.
  • If you take out a loan now that will show up on your mortgage approval as a debt which could affect the approval (sorry shoddy wording).

    Basically it sound like you need more money for a deposit, but not sure how taking out a loan for this is a good thing?
  • Bossypants
    Bossypants Posts: 1,276 Forumite
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    No lender is going to make you an unsecured loan to fund a house purchase, because that's what mortgages are for. If you've been assessed as not being able to afford to borrow the amount you need as a mortgage, no lender is going to want to get themselves into hot water with the regulator by going around mortgage affordability rules like this.

    If you can't obtain the money by other means (sell something? Gift from family?), then you can't afford to buy this house. I'm sorry, I know it's a hard pill to swallow when you've already emotionally committed to a place, but that's the way it is.
  • System
    System Posts: 178,227 Community Admin
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    BikingBud wrote: »
    You either have the required deposit or you don't.

    I read this as you cannot afford to cover the offer you have extended, please advise otherwise if I am missing something.

    Seems like you're over committed and cannot really afford the property:(


    We have saved £13,000 for a 225,000 property - which is actually over the 5% that we need. Issue is lending criteria has changed since our decision in principle 2 months ago and only found this out after we had put in an offer , since then have had to go through a broker and only option is to go through Santander who will accept top up deposits from loan - hence on here asking if anyone has sensible suggestions as to how to obtain this loan as many will not loan for this purpose.

    Benefits of obtaining a loan are that you immediately have higher equity in your property. We can easily afford the mortgage payments combined with the loan before anyone highlights this to me.

    Please do not comment if you have no helpful advice - e.g. Telling me that I cannot afford the property or that I have 'over committed'.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • BikingBud
    BikingBud Posts: 2,251 Forumite
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    Hlw23 wrote: »
    We have saved £13,000 for a 225,000 property - which is actually over the 5% that we needed. Issue is lending criteria has changed since our decision in principle 2 months ago and only found this out after we had put in an offer ,

    So do you have the required deposit?

    Why would you not confirm affordability before you committed?

    I wonder why mortgage providers often require deposits of 10%!

    Benefits of a higher deposit; you immediately have higher equity, not linked to an interest bearing loan from a third party

    I wonder if the mortgage lenders are concerned about LTV rates especially as the housing market remains over inflated.

    How would they protect their interest if prices drop by 10%.
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