Jump to content
House Price Crash Forum
AskFrank

Loan To Fund A Deposit On A House?

Recommended Posts

Has anyone had any recent experience of having done this?

Friend of mine has money tied up in investments that will be available late next year, but believes that it's a buyers market right now and we could be missing the boat if we hang about.

Is it still possible to get a loan for the purpose of a deposit on a property? I'm in a similar predicament (but just limited in my buying options until Spring), and wondering if I should be doing the same. Wife also keeps nagging because we've just had a baby and she wants to settle down properly.

Share this post


Link to post
Share on other sites

Has anyone had any recent experience of having done this?

Friend of mine has money tied up in investments that will be available late next year, but believes that it's a buyers market right now and we could be missing the boat if we hang about.

Not yet.

Maybe after Chrimbo?

Spiney.

Share this post


Link to post
Share on other sites

If you want to, then go ahead.

There can't be much more advice given. If you have £x tied up in investments that can be released in X months, and you need a deposit for a house, then borrow £x. Pay off loan when your investments mature.

Pretty simple.

When you buy is your choice of course.

Share this post


Link to post
Share on other sites

Has anyone had any recent experience of having done this?

Friend of mine has money tied up in investments that will be available late next year, but believes that it's a buyers market right now and we could be missing the boat if we hang about.

Is it still possible to get a loan for the purpose of a deposit on a property? I'm in a similar predicament (but just limited in my buying options until Spring), and wondering if I should be doing the same. Wife also keeps nagging because we've just had a baby and she wants to settle down properly.

No you can't get a loan for the deposit. Not unless you lie about where it came from and hide the repayments somehow and this would be fraud.

Wait another year and save up your deposit the normal way. It will still be a buyers Market and house prices will be significantly lower.

Share this post


Link to post
Share on other sites

No you can't get a loan for the deposit. Not unless you lie about where it came from and hide the repayments somehow and this would be fraud.

Wait another year and save up your deposit the normal way. It will still be a buyers Market and house prices will be significantly lower.

^ This. They will want to know the source of funds and a loan is not acceptible even if it does not compromise your affordability ratios.

Share this post


Link to post
Share on other sites

Yes you tell a lie and may get the loan. If you definately have the funds to pay it off in 12 months or so, then why not?

All depends on your own outlook. Eric would surely have a strong opinion on your question :lol:

It is fraud, and to me also seems totally bad timing

Share this post


Link to post
Share on other sites

Has anyone had any recent experience of having done this?

Friend of mine has money tied up in investments that will be available late next year, but believes that it's a buyers market right now and we could be missing the boat if we hang about.

Is it still possible to get a loan for the purpose of a deposit on a property? I'm in a similar predicament (but just limited in my buying options until Spring), and wondering if I should be doing the same. Wife also keeps nagging because we've just had a baby and she wants to settle down properly.

I've been extremely thankful that we haven't had a full deposit in the bank otherwise the wife would have bounced us into paying over the odds. So long as your mate has investments to cash in then a loan is fine but I'm sure I wouldn't take a loan right now as it would just disappear in a puff as soon as the price falls really get going.

Why does your mate think it will somehow be a seller's market again next year? That's the big question here for me.

Share this post


Link to post
Share on other sites

Do people really think prices will be significantly lower next year ?.

On average they fell by £6000 last month, and are expected to fall again this month. So yes, quite possibly there are a few crazies out there who think prices might be lowering somewhat.

Share this post


Link to post
Share on other sites

No you can't get a loan for the deposit. Not unless you lie about where it came from and hide the repayments somehow and this would be fraud. Wait another year and save up your deposit the normal way. It will still be a buyers Market and house prices will be significantly lower.

LOL at people who spout such rubbish.

You can borrow money for anything you want. The banks don't even ask you what it's for. Once it's in your bank account then money is money and it can be used for a deposit if you so choose.

Share this post


Link to post
Share on other sites

Yes you tell a lie and may get the loan. If you definately have the funds to pay it off in 12 months or so, then why not?

All depends on your own outlook. Eric would surely have a strong opinion on your question :lol:

It is fraud, and to me also seems totally bad timing

I just had a look at one loan from one of the big five banks and 'property deposit' actually comes up as one of the reasons for obtaining a loan ...so if they are happy to lend you a loan for a property deposit, surely they would be happy to provide a mortgage based on this too?

Thanks for all the replies. All this is sounding like a bad idea to me now...but the wife is persistent!

Share this post


Link to post
Share on other sites

LOL at people who spout such rubbish.

You can borrow money for anything you want. The banks don't even ask you what it's for. Once it's in your bank account then money is money and it can be used for a deposit if you so choose.

Yes, although you have to declare the loan repayments when you apply for a mortgage and they will reduce the amount a mortgage company will advance.

Share this post


Link to post
Share on other sites

No you can't get a loan for the deposit. Not unless you lie about where it came from and hide the repayments somehow and this would be fraud.

Wait another year and save up your deposit the normal way. It will still be a buyers Market and house prices will be significantly lower.

...good advise, an unsecured loan is three or four times more expensive than a secured loan, I thought when you applied for a mortgage they could tell through credit scoring what other loans/ credit cards you have and amounts outstanding, it is all I would have thought taken into consideration when checking affordability of the mortgage.

Share this post


Link to post
Share on other sites

Thanks for all the replies. All this is sounding like a bad idea to me now...but the wife is persistent!

I wonder how many wives in their innate determination for a secure (sic) nest have driven otherwise sensible men into positions of living on a precipice.

Share this post


Link to post
Share on other sites

I wonder how many wives in their innate determination for a secure (sic) nest have driven otherwise sensible men into positions of living on a precipice.

not to mention mothers and mothers-in-law doing same to their offspring

Share this post


Link to post
Share on other sites

Will you not get **** raped on the interest? loans are one of the areas banks are coining it just now. If it over any length longer of time, there might be early repayment options, but over a shorter timeframe they will want their interest paid for the full term of the loan. I always considered this a racket.

On another poster's point about legality, I see no issue. But in a sane world it would hit any affordability assessment for a mortgage. And to add to another poster's comment re credit scoring, that will depend on the lender, different financial institutions report data to 1,2 or 3 credit reference agencies. Plenty of my financial history only shows up on experian, and vice versa on equifax. I had a list somewhere showing which lenders were meant to us which credit reference agencies, can think where it is now.

Share this post


Link to post
Share on other sites

IIRC I saw a developer (Barratts I think) offering deferred loans for deposits at 6%. If they are I'll bet they're not the only ones.

Share this post


Link to post
Share on other sites

Doesn't anyone remember the "good old days" when people used several credit cards to stump up the deposit? This was before 100% and 125% mortgages.

Share this post


Link to post
Share on other sites

I think the main issue is the effect a loan then had on mortgage borrowing criteria and to be honest if the banks have an excuse not to lend then IMO they will find it and recent loan applications may not help

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.