House deposit

[Keeper96]

Hi all, 

 

Me and my partner broke up 6 months ago and she kept the house. 

I’ve been renting since then and have just taken out a loan to refurnish the house as I’ve been making do with bits I’ve scrounged off friends and family. 

 

I’ve just been informed that my co tract is being made permanent at work so I can now apply for mortgages again, would I be able to use this loan as part of my deposit (Roughly 50% of the deposit) or is it a big no no? 
 

any thoughts welcome 

[Tiggie]

Short answer is No as it's classed as debt by the mortgage company not available funds for a deposit

 

We borrowed 6k off my wife's mother to help with our deposit and the mortgage company wanted a written letter from her signed to say it was a gift and she would not be asking us to pay it back!!

[husoi]

From memory loans for house deposit has become unavailable since 2010 or thereabout.

I would ask a mortgage broker for advice how to go about it.

Usually a good broker doesn't cost you anything as they will get a commission from the lender.

[Bender]

Can't use a loan.

[Keeper96]

Not good news... now I’m stuck with a loan that I have to pay plus rent and savings on top

[husoi]

Maybe I'm being thick but, why are you paying for a loan for works on a house that it doesn't belong o you?

 

[Keeper96]

2 minutes ago, husoi said:

Maybe I'm being thick but, why are you paying for a loan for works on a house that it doesn't belong o you?

 

Refurnish, It’s for new couch, tv, bed, fridge etc. As I’m currently using a right mismatch of stuff, but my circumstances have changed that now mean I’m eligible for mortgages again but now in a situation where I can’t get the deposit together 

Edited December 21, 2020 by Keeper96
Added info

[James in Brum]

Other answer maybe you can. I took a loan out a couple of years ago and am now buying a house. Who know what is what.

[geofferz]

11 minutes ago, Keeper96 said:

Not good news... now I’m stuck with a loan that I have to pay plus rent and savings on top

Firstly you can always repay a loan penalty free - you only pay interest incurred for the loan start date until the repayment date so this isn't a problem. 

 

Secondly everyone here has given you incorrect advice - you can absolutely have debt and get a mortgage - I am going through this right now. Tell them the loan was for a new bike. Speak to a mortgage advisor. 

Edited December 21, 2020 by geofferz

[Tiggie]

@geofferz I didn't say you could not get a mortgage with debt. I said you couldn't use a loan as a deposit on a mortgage    

 

[husoi]

Have read here.

Other sites are available  

 

https://www.gocompare.com/mortgages/borrowing-a-deposit/

 

It is common in me to misread information and I read refurbishment instead 

[Bender]

You have to declare all debts and outgoings for a mortgage, they will absolutely refuse a mortgage with a loan used as a deposit. You can have loans and finance on anything, it's your ability to be able to pay them all back and still pay the mortgage and all the other bills that come with a house.

 

If you want to bend rules and say you bought something with that loam and get a family member to give you the same amount well thats another kettle of fish.

[Davidtav]

I used to work with someone who claimed that he and his partner maxed out their credit cards to use as a deposit for a house purchase … it was a few years ago and they might have tightened up on that sort of thing

[husoi]

It all depends on how much is the deposit, how much can you afford to pay every month and how low you can get the credit card APR.

It is a risk but frequently you can find deals with credit cards with interest free transfers for a substantial period which can help you in repaying.

You MUST keep in mind that paying a large amount on a credit card will mean a large minimum monthly payment and eventually high interest rates.

[Keeper96]

For my deposit I’m looking at approximately £9-10k 

 

I can afford the loan and mortgage payments as the mortgage would be Around £300 less than rent. 
 

I think the best way forward is find a family member looking for a new car or something like that and buy them it then they can “gift” me the money providing it’s from their savings and not also from a loan. 

[Davidtav]

That definitely sounds like a plan. The only flaw I can see is that surely you will need to have furniture etc in a house you buy? Just as you need in the one you rent. 

[Keeper96]

20 minutes ago, Davidtav said:

That definitely sounds like a plan. The only flaw I can see is that surely you will need to have furniture etc in a house you buy? Just as you need in the one you rent. 

I’ve got second hand stuff but what’s new stuff in the rented house I’m currently in, however now this Avenue is possibly opening up I’d rather have old stuff in my own house than new stuff in someone else’s!

[Guest]

3 hours ago, Keeper96 said:

Me and my partner broke up 6 months ago and she kept the house. 

I’ve been renting since then and have just taken out a loan to refurnish the house as I’ve been making do with bits I’ve scrounged off friends and family. 

 

[Guest]

2 minutes ago, Guest said:

 

 

[Bender]

1 hour ago, Keeper96 said:

For my deposit I’m looking at approximately £9-10k 

 

I can afford the loan and mortgage payments as the mortgage would be Around £300 less than rent. 
 

I think the best way forward is find a family member looking for a new car or something like that and buy them it then they can “gift” me the money providing it’s from their savings and not also from a loan. 

That would be a terrible terrible thing to do.

 

Good luck,  

 

When I split years ago it was before the last crash, was self employed and needed a bigger mortgage than could afford, luckily found a nice guy doing self cert mortgage, went like this, how much you want, how much you got, that's good, sign here.

 

 

[Stu]

8 hours ago, Guest said:

 

 

Lovely picture of you there @Guest

[Six30]

8 hours ago, Bender said:

That would be a terrible terrible thing to do.

 

Good luck,  

 

When I split years ago it was before the last crash, was self employed and needed a bigger mortgage than could afford, luckily found a nice guy doing self cert mortgage, went like this, how much you want, how much you got, that's good, sign here.

 

 

yeh same here, fell sorry for youngsters now .