Deposit conundrum

mrsmortgage

We've got a mortgage in principle, however the maximum amount they'll lend us is (and our deposit) is not big enough to buy a house for our needs.

So our options are to either buy a 3 bed knowing we'll have to move in 3 years no matter what

Or

Ask my cousin for a loan (to up the deposit) and pay him back ASAP.

The loan+mortgage is still slightly lower than our current rent, and with our current expenses we can save up to £500 a month, give or tale, so we k ow we can manage the payments.

However, to pay him back (he's charging an APR of 14%) we'd have to get a personal loan at 2.6-3% once the house is bought. The uncertainty is that we don't know if we'd be able to get a loan for the full amount £15k.

gj373

As I understand it the mortgage company may look for evidence as to where you received your deposit and may not be happy that it is a loan.

mrsmortgage

He wouldn't classify it as a loan but rather a "gift". There might not be need for that as I'll be using the charge on my ex marital home as proof of most of my deposit (£30k). ExH is happy to write a letter explaining he'll give me the 30k to release the charge (in fact he'll only give me £18k but that's a different matter).

gj373

mrsmortgage wrote: »

He wouldn't classify it as a loan but rather a "gift". There might not be need for that as I'll be using the charge on my ex marital home as proof of most of my deposit (£30k). ExH is happy to write a letter explaining he'll give me the 30k to release the charge (in fact he'll only give me £18k but that's a different matter).

If I were you I'd be honest with mortgage provider, broker, solicitor etc rather than trying to look for "workarounds".

mrsmortgage

If I were to do that, we could only be in the "we can only afford a house to live in the next three years" scenario.

Kentish_Dave

What you are planning is criminal fraud. If found out no-one will be offering you a mortgage for a long time.

If the only way to afford the house that you want is to turn to crime then I think that you need to come up with a better idea.

mrsmortgage

How is it fraud? In the end my mother could just decide to pay my cousin back. (In which case it would be a present). It all comes from overseas. Money would be deposited to a bank account in my name.

The only "dodgy" bit is that my exH has to pretend he'll give me more money than he actually is.

I have money locked in an overseas trust, which is worth £500k give or take but can't be take into account as it's overseas and a trust.

I receive income from that trust but again can't be taken into account (£750) a month and the only reason why I have to move money around from.ovwrseas account to UK based account.

What if it's my mom who gets the loan? For legality issues in the US I believe she's teh one who'd have to get the loan, not me.

scholesfan88

You are missing the point.

You're declaring the loan from your cousin as a gift, that's the dodgy part.

If the lender knew you had to pay this money back, then the chances are they may not offer you the mortgage if your affordability is already squeezed.

You are knowingly giving false information for personal gain.

Any solicitor worth half their weight would pick this up on AML checks.

Let_Us_See

Doesn't your cousin like you or is he a professional loan shark?

haras_nosirrah

Which lender are you looking at. Some lenders lend more than others. It may be another lender will lend enough without you looking to get creative (which is a very very bad idea - and I hope your cousin has a licence to lend money if he is charging interest)

haras_nosirrah

there are also lenders who accept foreign income