Advice needed - Loan that wont kill my mortgage offer.

adarbin

Hi All, 

I am hoping one of you may be able to suggest a solution to my problem. I had an offer accepted on a new build using help to buy back in June but as I have one default on my credit report from 2017 I wasn't able to go with a major lender at the time.

My mortgage company took 8 weeks to approve my mortgage and so the rates had gone up meaning I had to find an extra £8000 deposit for the affordability test. I currently have £1000 spare a month to add to the pot so have managed to get half the needed money but I am still £4000 short. My mortgage deal expires on 23/11 and won’t be extended as its 4.5% for 5 years. if I start over I would have to pay a lot more in mortgage payments as its now 6.71% and need even more deposit.

Do any of you have any ideas on how I could borrow the money so it won’t appear on my credit report as this would likely cause (be the excuse) for the mortgage lender to withdraw the offer at completion. I have spoken with the estate agent but as the developer agreed to drop the price £25,000 removing the parking space when i made the offer, I have been told that my flat is the cheapest they have sold, and they think they could get more from someone else. The few family members I thought might be able to help aren't able to due to the times we are in, equally with the one friend i am comfortable asking.

I'm at a loss and £4000 seems such a small and achievable amount to lose a home over. Ideally, I could sit back but where I live currently is due to be demolished as part of a mass new development and my housing association has no need to rehouse with local rents being over £1000 p/m whereas my mortgage will be £650. After I move I expect to have about £800 free a month so could repay a large loan easily, but as the property isn’t complete yet there is likely to be an overlap in paying the mortgage while still renting my current place.

Thanks in advance.

Alan 

Yorkie006

All application for credit (loans, credit cards etc) will show on your credit report. Any chance you can get some extra income by working overtime, getting a weekend/evening job, selling some stuff you can do without etc? Are you part of a company share-save scheme? If so, you should be able to withdraw your contributions early. Credit union may be an option as they don't do credit checks but no guarantee they would lend to you, of course.

themoomins

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

adarbin

Yorkie006 said:

All application for credit (loans, credit cards etc) will show on your credit report. Any chance you can get some extra income by working overtime, getting a weekend/evening job, selling some stuff you can do without etc? Are you part of a company share-save scheme? If so, you should be able to withdraw your contributions early. Credit union may be an option as they don't do credit checks but no guarantee they would lend to you, of course.

Thanks yorkie, Sorry I forgot to mention I have 2 credit unions but they have said they do a hard search on your credit report (not sure what it means) when I explained the situation to them.

I have 2 jobs working 45 hours so overtime isn't really a possibility as the civil service don't pay overtime and Waitrose cant let me work my only day off.

With regards to selling things I don't really have much to sell, the only items I have that are less than 12 months old are my macbook air, ipad and iphone where I would be lucky to get £1000 for them second hand as they have all been replaced with newer models.

adarbin

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Thanks themoomins, the purchase came out of the blue with my parents offering to release the equity from their house to help me get on the ladder as i'm the only one due to inherit, I got £98,000 from them which is the exact value I need for the deposit so the paperwork is fine as I just updated it. As

I wasn't expecting it I got a loan 9n january to pay off my higher rate debts as I went from not able to pay my full rent in 2017 to 2 jobs in August 2021 with decent income but high interest payments. As my waitrose job went from full time to part time (with me working a 7 day week till Feb this year) my pay was worked out incorrectly with me being paid up to full time some weeks so I had to pay that off too which is where the deposit got to £90,000. 

If there wasnt the deadline of the mortgage offer expiring it wouldnt be a problem as I can save at least £1,000 a month

adarbin

adarbin said:

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Thanks themoomins, the purchase came out of the blue with my parents offering to release the equity from their house to help me get on the ladder as i'm the only one due to inherit, I got £98,000 from them which is the exact value I need for the deposit so the paperwork is fine as I just updated it. As

I wasn't expecting it I got a loan 9n january to pay off my higher rate debts as I went from not able to pay my full rent in 2017 to 2 jobs in August 2021 with decent income but high interest payments. As my waitrose job went from full time to part time (with me working a 7 day week till Feb this year) my pay was worked out incorrectly with me being paid up to full time some weeks so I had to pay that off too which is where the deposit got to £90,000. 

If there wasn't the deadline of the mortgage offer expiring it wouldn't be a problem as I can save at least £1,000 a month

Sorry i cant find the edit button and this is a little unclear. to get approved with help to buy I had to pay off all my debts.

silvercar

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Both of these are good ideas. Generally mortgage lenders won't have a problem with family borrowing money. They need to know the source, but they aren't bothered if family take loans to provide it. Though you do say that family aren't in a position to give you the money. Gifts are fine, official family loans are not (as the lender is concerned that you have those repayments to make as well as your mortgage).

Living off your credit card to increase your bank balance only works if the lender doesn't insist on loans being cleared by completion day.

Bottom line is how much help family can reasonably give to make your dream. - unless there are better mortgage rates, or more relaxed lenders available now.

[Deleted User]

silvercar said:

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Both of these are good ideas. Generally mortgage lenders won't have a problem with family borrowing money. They need to know the source, but they aren't bothered if family take loans to provide it. Though you do say that family aren't in a position to give you the money. Gifts are fine, official family loans are not (as the lender is concerned that you have those repayments to make as well as your mortgage).

Living off your credit card to increase your bank balance only works if the lender doesn't insist on loans being cleared by completion day.

Bottom line is how much help family can reasonably give to make your dream. - unless there are better mortgage rates, or more relaxed lenders available now.

If the family lends the money (rather than gifts) then the mortgage lender will consider the debt as part of the total borrowing and affects what they can borrow, that is why any family stuff must either be a gift or declared as a loan as you say. It'll affect the offer anyway so OP will be stuck either way

silvercar

Deleted_User said:

silvercar said:

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Both of these are good ideas. Generally mortgage lenders won't have a problem with family borrowing money. They need to know the source, but they aren't bothered if family take loans to provide it. Though you do say that family aren't in a position to give you the money. Gifts are fine, official family loans are not (as the lender is concerned that you have those repayments to make as well as your mortgage).

Living off your credit card to increase your bank balance only works if the lender doesn't insist on loans being cleared by completion day.

Bottom line is how much help family can reasonably give to make your dream. - unless there are better mortgage rates, or more relaxed lenders available now.

If the family lends the money (rather than gifts) then the mortgage lender will consider the debt as part of the total borrowing and affects what they can borrow, that is why any family stuff must either be a gift or declared as a loan as you say. It'll affect the offer anyway so OP will be stuck either way

If the family offer a gift, it shouldn’t effect the size of the loan. For money laundering checks etc the solicitor may want to know the source, but family gifts don’t effect borrowing amounts.

[Deleted User]

silvercar said:

Deleted_User said:

silvercar said:

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Both of these are good ideas. Generally mortgage lenders won't have a problem with family borrowing money. They need to know the source, but they aren't bothered if family take loans to provide it. Though you do say that family aren't in a position to give you the money. Gifts are fine, official family loans are not (as the lender is concerned that you have those repayments to make as well as your mortgage).

Living off your credit card to increase your bank balance only works if the lender doesn't insist on loans being cleared by completion day.

Bottom line is how much help family can reasonably give to make your dream. - unless there are better mortgage rates, or more relaxed lenders available now.

If the family lends the money (rather than gifts) then the mortgage lender will consider the debt as part of the total borrowing and affects what they can borrow, that is why any family stuff must either be a gift or declared as a loan as you say. It'll affect the offer anyway so OP will be stuck either way

If the family offer a gift, it shouldn’t effect the size of the loan. For money laundering checks etc the solicitor may want to know the source, but family gifts don’t effect borrowing amounts.

Hence why I said if the family lends not a gift

silvercar

Deleted_User said:

silvercar said:

Deleted_User said:

silvercar said:

themoomins said:

Even if you did borrow from family that would cause further complications. The bank would want to know about the source of the money.

If you have a credit card could you do all of your spending on that for a couple of months and keep the cash you would have spent on living in your account for the deposit? 

Both of these are good ideas. Generally mortgage lenders won't have a problem with family borrowing money. They need to know the source, but they aren't bothered if family take loans to provide it. Though you do say that family aren't in a position to give you the money. Gifts are fine, official family loans are not (as the lender is concerned that you have those repayments to make as well as your mortgage).

Living off your credit card to increase your bank balance only works if the lender doesn't insist on loans being cleared by completion day.

Bottom line is how much help family can reasonably give to make your dream. - unless there are better mortgage rates, or more relaxed lenders available now.

If the family lends the money (rather than gifts) then the mortgage lender will consider the debt as part of the total borrowing and affects what they can borrow, that is why any family stuff must either be a gift or declared as a loan as you say. It'll affect the offer anyway so OP will be stuck either way

If the family offer a gift, it shouldn’t effect the size of the loan. For money laundering checks etc the solicitor may want to know the source, but family gifts don’t effect borrowing amounts.

Hence why I said if the family lends not a gift

 You said “it will affect the offer anyway”, but a gift would be allowed so shouldn’t effect the offer.