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iamnumerate

Borrowing for the deposit

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I heard on you and yours on the radio a couple of doctors who bought a house.  They needed £60k for the deposit but only had £20k so borrowed £40k from her parents.  How is that possible?  Surely you cannot borrow towards the deposit because you now owe more?  Or did they commit mortgage fraud?

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3 minutes ago, iamnumerate said:

I heard on you and yours on the radio a couple of doctors who bought a house.  They needed £60k for the deposit but only had £20k so borrowed £40k from her parents.  How is that possible?  Surely you cannot borrow towards the deposit because you now owe more?  Or did they commit mortgage fraud?

Most likely declared it as a not repayable gift, then to 'gift' them it back at a later date, which is allowed as its not defined as 'borrowing'. (Source, MSE)

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8 minutes ago, Scramz said:

Most likely declared it as a not repayable gift, then to 'gift' them it back at a later date, which is allowed as its not defined as 'borrowing'. (Source, MSE)

I can understand because there is no obligation to pay off the amount and if the couple were to die then the "loan" would die with them and not be chargeable on the house unlike a credit card load.

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More shocking is that a couple of doctors cannot cobble together 60K and still have to have mum and dads help + max borrowing.

Poor buggers (the parents) all that university + medical school + marrying another doctor = Still having to give them the deposit for a house and by the looks of it they are not loaded lest they just buy the thing or hand over 100's of k to prevent them overleveraging.

Really they should have won first prize in the child lottery and kicked back looking forward to some presents the other way.

 

 

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28 minutes ago, iamnumerate said:

I heard on you and yours on the radio a couple of doctors who bought a house.  They needed £60k for the deposit but only had £20k so borrowed £40k from her parents.  How is that possible?  Surely you cannot borrow towards the deposit because you now owe more?  Or did they commit mortgage fraud?

2 doctors not having enough ? what do they earn peanuts 

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2 minutes ago, Fromage Frais said:

More shocking is that a couple of doctors cannot cobble together 60K and still have to have mum and dads help + max borrowing.

Poor buggers (the parents) all that university + medical school + marrying another doctor = Still having to give them the deposit for a house and by the looks of it they are not loaded lest they just buy the thing or hand over 100's of k to prevent them overleveraging.

Really they should have won first prize in the child lottery and kicked back looking forward to some presents the other way.

 

 

Well £60k is a lot and they are junior doctors not consultants/GPs.

I once read someone on this forum say of a house "I bought a similar as NHS admin clerk now a consultant could not afford it".

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2 minutes ago, iamnumerate said:

Well £60k is a lot and they are junior doctors not consultants/GPs.

I once read someone on this forum say of a house "I bought a similar as NHS admin clerk now a consultant could not afford it".

I understand but if they are not in their first year they should be one approx £28,000+ each so combined £56,000 odd

Thats still good if outside London and it would be a shame if their parents generosity allowed them to get on the hook for a loan thats going to shaft them later.

 

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1 minute ago, Fromage Frais said:

I understand but if they are not in their first year they should be one approx £28,000+ each so combined £56,000 odd

Thats still good if outside London

 

True

1 minute ago, Fromage Frais said:

 it would be a shame if their parents generosity allowed them to get on the hook for a loan thats going to shaft them later.

 

 

Well that is another matter but a real risk.  To be honest if I were a newly qualified doctor I would be in Oz.

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46 minutes ago, iamnumerate said:

I heard on you and yours on the radio a couple of doctors who bought a house.  They needed £60k for the deposit but only had £20k so borrowed £40k from her parents.  How is that possible?  Surely you cannot borrow towards the deposit because you now owe more?  Or did they commit mortgage fraud?

We used to do it with credit cards but the deposit required was a lot less - nothing do with fraud in either case

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44 minutes ago, iamnumerate said:

I heard on you and yours on the radio a couple of doctors who bought a house.  They needed £60k for the deposit but only had £20k so borrowed £40k from her parents.  How is that possible?  Surely you cannot borrow towards the deposit because you now owe more?  Or did they commit mortgage fraud?

Maybe you could ask the eminent authority on the subject, Peter Mandelson.

 

article-1066425-02E3D21700000578-577_468

 

 

http://www.telegraph.co.uk/news/politics/labour/3130348/The-scandals-that-brought-Peter-Mandelson-down-twice-before.html

 

Quote

 

In his first incarnation, as Secretary of State for Trade and Industry, he lasted less than five months in 1998.

He was undone on that occasion by the revelation that he had bought a fashionable home in Notting Hill, with the help of an interest-free £373,000 loan from his millionaire ministerial colleague Geoffrey Robinson.

When Mr Mandelson filled in a Britannia Building Society mortgage form to buy the house in 1996 he had failed to mention the loan. Nor did it appear on his entry in the Commons Register of Interests.

After joining the Cabinet he also did not bring the loan to the attention of his Permanent Secretary, even though Mr Robinson's business links were at that time under investigation by Mr Mandelson's own department.

Tony Blair had vowed that his Government, in contrast to the Conservatives, would be "whiter than white" and Mr Mandelson had to go.

 

 

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2 minutes ago, Greg Bowman said:

We used to do it with credit cards but the deposit required was a lot less - nothing do with fraud in either case

But if the bank says you need £x more for your deposit and then you borrow £x doesn't the repayments for loan of £x change their calculations of what you can pay back?  Unless you don't tell them, in which case isn't it fraud? 

(A long term since I applied for a mortgage so I could be wrong).

This seems to imply I am right

https://www.momentum.co.uk/mortgages/mortgage-affordability-checks/

 

Quote

All that changed in April 2014 following a Financial Conduct Authority (FCA) initiative called the Mortgage Market Review (MMR). This put the onus on lenders to actually check your financial situation to make sure mortgage payments are affordable – and not only at the present rate of interest, but also if interest rates rose. This is called a “stress test”, and involves checking whether you could afford a mortgage with a higher interest rate. Some lenders are testing rates as high as 7%.

 

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1 minute ago, Take Me Back To London! said:

Maybe you could ask the eminent authority on the subject, Peter Mandelson.

 

article-1066425-02E3D21700000578-577_468

 

 

http://www.telegraph.co.uk/news/politics/labour/3130348/The-scandals-that-brought-Peter-Mandelson-down-twice-before.html

 

 

Strange that Tommy Robinson went to prison for mortgage fraud but not Mandelson.  I think his case might be more serious but Mandelson didn't get anything - he was not even prosecuted (great shame actually it would have been a great deterrent but unless you are controversial you can get away it).

http://www.bedfordshire-news.co.uk/edl-leader-tommy-robinson-jailed/story-21724090-detail/story.html

Quote
He made two loans to people wanting to buy property and then pointed them towards a bent woman mortgage broker who helped obtain phoney pay slips and income details.
Read more at http://www.bedfordshire-news.co.uk/edl-leader-tommy-robinson-jailed/story-21724090-detail/story.html#YogupcPyleevmbMM.99

 

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44 minutes ago, iamnumerate said:

But if the bank says you need £x more for your deposit and then you borrow £x doesn't the repayments for loan of £x change their calculations of what you can pay back?  Unless you don't tell them, in which case isn't it fraud? 

(A long term since I applied for a mortgage so I could be wrong).

This seems to imply I am right

https://www.momentum.co.uk/mortgages/mortgage-affordability-checks/

 

 

Yes

 The repayment amounts get taken off the affordability. Same with car payments, outstanding credit balances etc. 

 

The problem is, lending multiples are so lax, there's more than enough wiggle room to accoutrements for the debt payments. 

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1 hour ago, iamnumerate said:

But if the bank says you need £x more for your deposit and then you borrow £x doesn't the repayments for loan of £x change their calculations of what you can pay back?  Unless you don't tell them, in which case isn't it fraud? 

(A long term since I applied for a mortgage so I could be wrong).

This seems to imply I am right

https://www.momentum.co.uk/mortgages/mortgage-affordability-checks/

 

 

I am being a little tongue in cheek but you are right

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2 hours ago, iamnumerate said:

I can understand because there is no obligation to pay off the amount and if the couple were to die then the "loan" would die with them and not be chargeable on the house unlike a credit card load.

That's love/trust from parents for you.

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Mortgage application I filled out recently had a section on repayment of a borrowed deposit. I was surprised, but thinking it over, if I had £20k in the bank and wanted to buy a car and a house, I could borrow £20k for the car and use the cash as a deposit on the house: all fine according to my previous view, the mortgage lender just takes the repayments on the car into account. I could also buy the car with cash and borrow the deposit: what's the difference from the mortgage lenders pov? Nothing, £20k deposit and £20k debt. Since they don't take assets (the car) into account, then take the car and the original £20k out of the equation - I start with nothing, borrow £20k for the deposit, and from the mortgage lenders pov, it's still £20k deposit, £20k debt.

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15 hours ago, iamnumerate said:

Strange that Tommy Robinson went to prison for mortgage fraud but not Mandelson.  I think his case might be more serious but Mandelson didn't get anything - he was not even prosecuted (great shame actually it would have been a great deterrent but unless you are controversial you can get away it).

http://www.bedfordshire-news.co.uk/edl-leader-tommy-robinson-jailed/story-21724090-detail/story.html

 

Amazing what the state can find to jail someone over when it suits them......

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