Santander and Unsecured Loan as Deposit

Conan1Sett

Hello everyone,

I recently got a Decision in Principle from Santander in which I declared my deposit is made up of unsecured borrowing. I have, however, done this before with Barclays and they then said that they do not grant mortgages in which the deposit is made up of unsecured borrowing. A mortgage consultancy firm advised me to try Santander. 

Has anyone had the same circumstance and result with Santander and actually been approved?

K_S

Subject to discretion, Santander do consider deposit made up of a loan. They will review the lender (plausible explanation if not a bank), terms (rate, payments, security, etc) and will need to be factored into affordability. Unless I'm mixing up lenders, I have arranged a Santander mortgage in the past with the deposit coming from a second-charge loan on another property.

[Deleted User]

Santander are fine with it as long as within affordability and the unsecured loan isn't with them
There is 1 other small building society that takes a loan as well but rates will be higher

Conan1Sett

Deleted_User said:

Santander are fine with it as long as within affordability and the unsecured loan isn't with them
There is 1 other small building society that takes a loan as well but rates will be higher

What's the name of that building society?

[Deleted User]

Saffron Building Society

Conan1Sett

Deleted_User said:

Santander are fine with it as long as within affordability and the unsecured loan isn't with them
There is 1 other small building society that takes a loan as well but rates will be higher

JMA I have just begun my mortgage application and I'm somewhat apprehensive due to the unsecured borrowing. I was granted a Decision in Principle and then a Provisional Acceptance after declaring the borrowing and repayments.

I have just officially uploaded proof of the terms of my unsecured borrowing. It is two loans of 5k and 3k. There is interest charge of course. The loans are for 36 months and 24 months respectively. I pay back £400 per month split across £205 and £194. These loans made up most of my deposit. I am on a salary of £1770 per month and the mortgage repayments would be £235 per month. With other bills all factored in, I personally think it is affordable but I am concerned that Santander will not agree? 

Could you take a wild guess about my chances? 

K_S

@conan1sett To see how Santander would view your affordability, try out their calculator with the monthly loan repayments factored in

https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Conan1Sett

K_S said:

@conan1sett To see how Santander would view your affordability, try out their calculator with the monthly loan repayments factored in

https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Yeah, according to that calculator they said up to 30k more than what I am currently asking for. 
That calculator, though, only asks for the total monthly repayments on other borrowing but they don't ask for the total monthly repayments that are still remaining. I'll be paying up until 2023 before all is paid to be honest.

K_S

Conan1Sett said:

K_S said:

@conan1sett To see how Santander would view your affordability, try out their calculator with the monthly loan repayments factored in

https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Yeah, according to that calculator they said up to 30k more than what I am currently asking for. 
That calculator, though, only asks for the total monthly repayments on other borrowing but they don't ask for the total monthly repayments that are still remaining. I'll be paying up until 2023 before all is paid to be honest.

@conan1sett It just assumes that you will be making those payments on an ongoing basis. If you've entered the numbers correctly and it shows as affordable, that's unlikely to be an issue with regard to your application.

Athanasia

Has anyone been approved after repeated questions from the underwriters, or is it just a case of slowly preparing you for decline? First time buyer and immensely stressed. I have a borrowed deposit and a small debt, but a steady income from a permanent NHS job and no defaults or missed payments ever. I passed their affordability in the DIP and the mortgage application process (hard check seen on experian) but the underwriters keep asking questions.

Conan1Sett

Athanasia said:

Has anyone been approved after repeated questions from the underwriters, or is it just a case of slowly preparing you for decline? First time buyer and immensely stressed. I have a borrowed deposit and a small debt, but a steady income from a permanent NHS job and no defaults or missed payments ever. I passed their affordability in the DIP and the mortgage application process (hard check seen on experian) but the underwriters keep asking questions.

IIRC they asked me several questions. One that really threw me was how I would go about getting the mortgage paid in the event of my death. I presumed they were talking about health insurance. I have noted that now but at the time I thought that might be game over. 

In the end it was approved.