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Middez

Overdraft For Deposit ?

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Hi there, i will keep it short.

Earn 14k partner earns 13k. Currently private rent £500pm. Need to find a new place 1 december.

Looking to get a 40k terrace house. Can get a 95%ltv mortgage so need 2k for deposit and money for fees.

Could we both finance the deposit and fees using our overdrafts as it is such a small amount compared to usual situations ? We have no other loans or debts.

The mortgage payments will save us £300pm and the house means we would save another £100pm on fuel.

So budget wise we would be fine, its just we havent planned ahead to save a deposit.

I know its not advised but just want to know if it is possible.

Many thanks

Midz

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Not really, because you will have to state how you are funding your deposit and you will have to prove this to your solicitor. Secondly, it might show up when they do a credit check stating you have £xk outstanding..

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Thanks Jason.

Do you think then it would be possible for just myself to get the mortgage and the deposit would be a gift from my partner which is funded by their overdraft?

Surely I wouldnt have to prove how my the gift was funded ?

Again i know this isnt ideal but we will save a fortune compared to renting.

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Looking to get a 40k terrace house.

:o:o:o:o

I know it's cheap oop north, but £40k? I want a go in that time machine!

[edit to add] Yes, if you're not likely to move, £40k to buy vs £500/month to rent is an obviously-sensible decision, even allowing for further falls.

Edited by porca misèria

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LoL theres quite a few round that price, theres even a 55k semi detatched with minor work needed.

Thats why I think even though we dont have the savings, the money needed for a deposit we could quite comfortably pay a mortgage and a loan over 5 years and save a fortune than private renting.

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LoL theres quite a few round that price, theres even a 55k semi detatched with minor work needed.

Thats why I think even though we dont have the savings, the money needed for a deposit we could quite comfortably pay a mortgage and a loan over 5 years and save a fortune than private renting.

How comes rents there are so expensive then?

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Do you think then it would be possible for just myself to get the mortgage and the deposit would be a gift from my partner which is funded by their overdraft?

Just be mindful of who has signed up for the mortgage with respect to what happens if things go wrong. I.e. the relationship breaks down or there is a death. Not wishing to dwell on the negative but just be mindful that you are in a different situation to there being both names on the mortgage.

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Just be mindful of who has signed up for the mortgage with respect to what happens if things go wrong. I.e. the relationship breaks down or there is a death. Not wishing to dwell on the negative but just be mindful that you are in a different situation to there being both names on the mortgage.

Certainly will, thanks. Always have to consider all options.

I think what we will try and do is switch over to a mortgage with both our names on after the initial fixed 5 year deal runs out.

So do you think we could actually do this?

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My friend had some money towards a deposit for his house but was 3k short, he got a personal loan for the 3k shortly before and told the bank it was for a car purchase. He went for a mortgage straight after and it went through with no problem.

Getting a loan for a mortgage deposit is a big no no but many people are doing it, as long as you still meet the mortgage companies affordability criteria and they do not know that the loan was for the deposit then people do get away with it. Afterall people who go for mortgages do often have existing loans and overdrafts and it's not unrealistic that someone might have got a loan for a car or another item shortly before they buy a house.

I'm not saying its right but people are doing it!

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My friend had some money towards a deposit for his house but was 3k short, he got a personal loan for the 3k shortly before and told the bank it was for a car purchase. He went for a mortgage straight after and it went through with no problem.

Oops, so much for reports of tighter lending standards :wacko:

No criticism of your friend, but it shows how ridiculous the system is when you end up perpetrating a reverse fraud on it (i.e. tell them you're more of a spendthrift than you really are).

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Just read this on mortgagestrategy.co.uk

False dawn for UK housing market, says Fitch

Most lenders have amended score card cut offs in order to increase the score needed to obtain a loan.

It adds that a number of lenders are also scrutinising the source of the deposit to ensure that it does not come from other recent borrowings. Some lenders are also declining loans where they see evidence of significant debt consolidation, regardless of whether the LTV and credit score are within policy.

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