Loan for a deposit ?

Scam said:
What a ridiculous idea. Why are people still insistent on spending money they dont have? Renting admittedly is not a good long-term prospect, but how can someone say that is a waste of money when comparing it to taking out a loan with interest (and dont forget, a mortgage).
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The good days are over for making a quick, but large profit in buying and selling property, but due to the crash they are only go up, be it not as quickly as before.

I would rather be paying into something where I can get something back than renting and lining some one elses pocket.

As long as you are carful, not borrowing a own with a monthly repaytment of £1500 when your income is only £2k, but if you can comfortably afford it, as in my example above where you have £2.5k - £3k a month. Why not?!
 
40% deposit is insane :eek:

How many first time buyers will have that sort of cash on hand ?

I think i am just gunna stick to my saving ways and try and aim for the 10%/15% mark.
 
Renting really isn't a waste of money.

My current mortgage is £900 a month, £650 of which is just paying back the interest. Only £250 goes towards repaying the loan itself. Add that to the fact that I have to pay all of the bills, pay when the washing machine breaks, etc and you can often save money by renting.
 
GinG said:
I would rather be paying into something where I can get something back than renting and lining some one elses pocket.
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That's such an over-used line. You still dont get it. You have a choice of lining a landlords pocket, or the banks. There's really no difference in it. See Tunney's post. I totally agree with 'owning' something at the end of a mortgage, but to say renting is a 'waste of money' simply isn't true.

GinG said:
As long as you are carful
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Don't you think people said that before? ;)
 
My opnion is just grit your teeth, reduce down you lifestyle and get saving for a while.

i dont thnk first time buyers really understand how expensive buying a hosue can be. It not just a case of the deposit,

on top of the deposit you have:
stamp duty
solicitors fees
searches
mortage arrangement fees
valuation fees
surveys
then you have to furnish the place,

what ever deposit you were thinking of double it.
 
It all depends how much the loan is for and how much teh repayments are. if you don't have any other outgoings (over drafts, credit cards, loans). Then you might well be able to get a mortgage. If you can and can afford it, it's not a bad idea. Fixed rate mortgage and loan and you may well end up saving money as interest rates are only going to go up.

Not sure how you would go about securing both, before taking either out though. As you wouldn't want to take a loan out to then be declined.

mangobreeder said:
on top of the deposit you have:
stamp duty
solicitors fees
searches
mortage arrangement fees
valuation fees
surveys
then you have to furnish the place,

.
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Well that depends

stamp duty - £0 if you buy a cheaper house
solicitors fees/valuation fees/ surveys - £300
mortage arrangement fees - can be anything from £0-around 1.5k
then you have to furnish the place, again you can usually do this for nothing with freebies or very cheap with 99p items of the bay.
 
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I took a small personal loan out about 2 years ago. I had a clause in it that as long as I didnt spend any of the money from the loan I had 2 weeks in which I could cancel the loan. So if you moved rapidly you could get the loan. Ask about for mortgages using the money you have as a deposit. If you do get declined. Just cancel the loan give the money back to the bank.

You havnt lost anything then. I'm not sure how that works on credit history though
 
Thing is about renting, as I would see it you can never make it your own.

You cant have the kitchen you would really want, or the bathrom, or the colour scheme, or that nice quality slate/wood floors, or the nice decking area out the back.
 
my sister just used a solicitors up in Leeds and got the lot done for 300. I was gob smacked. but it seems if you look around and use the internet you can get some bargains.
 
mangobreeder said:
impressive, im buying a house here in london, and i reckon the fees will be around the 800 to 1k
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I would think about allocating 4/5k for all fees including stamp duty etc, then the same again to get the place furnished properly. But this is just a guess, which is also an overestimate.

London prices are still ridiculous and really am not sure what to do when we have the required deposit, plus the Mrs works in Ealing and I'm over at Canary Wharf :/ Looking at 25% of £200k (better rates), then with the fees etc above it will look more like £55-60k, which even with out joint salaries, will be impossible to do within 18months-2years.

Fun and games.... fun and games :D
 
AcidHell2 said:
my sister just used a solicitors up in Leeds and got the lot done for 300. I was gob smacked. but it seems if you look around and use the internet you can get some bargains.
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Sounds about right, mate bought a house around 6 months ago and had £350 in fees. He avoided an estate agent though, the two parties agreed it between solicitors directly.
 
GinG said:
Interesting you bring this pointer up. Only yesterday I was having a very heated debate with my MD about this.

He says that the way forward would be to borrow the cash now and go out and buy a house as they are only going to go up (they are starting to around here anyway). His point was that my goal is to save up £15k (10%) by May next year, however if the prices rise then that £15k will then need to be £16k then 17k etc etc. Which would then make something that is achievable, impossible!

There are some absolute bargains to be had at the moment, i.e. a house is up for sale for £150k, needs some work doing (pretty much everything, no central heating!) however the houses next door are worth £225k+), this makes the loan idea really really tempting.

On the other hand, the mortgage will already be enormous at around £800 a month, adding a £230 - £250 a month loan repayment will eat into the life style and also eat into free cash to do the house up.

It is your decision, if you can afford it and there is a house you have seen go for it, then in 5 years when you come to re mortgage just repay the loan and add it onto your mortgage.

I however (well my gf!) has decided to do it the 'cheaper' way and save up for the deposit so when we move into our 1st home we will be 'debt' free.

Edit: As for a loan effecting your application, a friend of mine went and got a mortgage with Natwest, they still went on how much you could afford to pay back rather than income x whatever. So £4k coming in between 2 people, after bills and mortgage & loan there is still a fair amount left to splash.
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One tiny flaw, what makes you think a house in that condition, with lending as it presently is, will attract a 90% mortgage?

Its hard enough to get a 90% LTV with a sound property with the banks being as tight as they are, for a fixer upper you are likelt to see a large proportion of the funds held back by the lender.

Yes I know banks etc are advertising 90% loans, but only the very best are getting accepted.
 
-Ad- said:
I would think about allocating 4/5k for all fees including stamp duty etc, then the same again to get the place furnished properly. But this is just a guess, which is also an overestimate.

London prices are still ridiculous and really am not sure what to do when we have the required deposit, plus the Mrs works in Ealing and I'm over at Canary Wharf :/ Looking at 25% of £200k (better rates), then with the fees etc above it will look more like £55-60k, which even with out joint salaries, will be impossible to do within 18months-2years.

Fun and games.... fun and games :D
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agree with the fees i was refering to solictors fees.

i was lucky with my purchase other comparables in the street are 70k higer in price, mine just needs a bit (a lot) of work.

i work in Canary wharf too, wanna meet for lunch :)
 
Dr Who said:
One tiny flaw, what makes you think a house in that condition, with lending as it presently is, will attract a 90% mortgage?

Its hard enough to get a 90% LTV with a sound property with the banks being as tight as they are, for a fixer upper you are likelt to see a large proportion of the funds held back by the lender.

Yes I know banks etc are advertising 90% loans, but only the very best are getting accepted.
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The house has been valued, it is livable, basically was owned by an old lady who has passed away.

Everything that needs doing is purely cosmetic / through choice. I.e. dont really need central heating, don't really need to make a bigger kitchen by knocking walls down etc etc.
 
mangobreeder said:
agree with the fees i was refering to solictors fees.

i was lucky with my purchase other comparables in the street are 70k higer in price, mine just needs a bit (a lot) of work.

i work in Canary wharf too, wanna meet for lunch :)
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You can buy me lunch, I live in a box behind the East Entrance of the Jube Line station exit in the Garden of Eden, waiting for the sun to come out which brings the preciouses :D

Nice one on the flat, beds, baths, terrace ?


N.b. I work towards the Westferry side of the wharf, yourself ?
 
-Ad- said:
You can buy me lunch, I live in a box behind the East Entrance of the Jube Line station exit in the Garden of Eden, waiting for the sun to come out which brings the preciouses :D

Nice one on the flat, beds, baths, terrace ?


N.b. I work towards the Westferry side of the wharf, yourself ?
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Its a 3 bed semi in Hornchurch :)

I work for Northern Trust, so im right on Bank street,
 
mangobreeder said:
Its a 3 bed semi in Hornchurch :)

I work for Northern Trust, so im right on Bank street,
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Very nice, a 3 bed semi is my aim. Just need the other half to get promoted a few more times and I can be an engineering house husband.

To trust and setup a date :D
 
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