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Loan for a deposit ?

havent read the rest of the thread so sorry if this has already been said
he won't be able to do this.
we're buying at the moment and one of the forms from the solicitor basically states that you cannot have borrowed the deposit.
also £10k bank loan will do nothing unless the house he is buying is sub £90k (all banks want 10%+ deposit, a least £1k solicitors fees, £300 ish for survey, buying fees of £500
we have 15% deposit to put down on the house we're buying, would have 20%+ if it wasn't for all the extra costs to consider!!
 
I can only speak about my area. The rental prices have gone UP!. Yes there may be room to negotiate but most wont (in my experience) (Currently renting having been for nearly 2 years) and the bank loan with show on the credit report.
 
Subliminal Aura said:
If you can't afford your deposit you can't afford the house.

. fin .

imho people who can only just afford 10% are at risk too.
When will they learn ?
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What a stupid thing to say. Its not like many people can just pull £15k - £20k from their back pocket.

My and my gf cannot move out just yet due to not having enough for a deposit. We have done the budgets for when we move out, allowing £300 - £400 a month food, so as you can see we have over estimated by a great deal...

We will have between £1500 - £1700 a month left over. I can say we can afford the house but not the deposit just yet!!
 
Subliminal Aura said:
If you can't afford your deposit you can't afford the house.

. fin .

imho people who can only just afford 10% are at risk too.
When will they learn ?
Click to expand...

rubbish, I could afford my mortgage about a year ago, but did not have the deposit together, i have foudn a house and am in the process of buying it at the moment.

When i finally get the mortgage, ill be better off financially, as im saving more than the bills and mortgage come to.
 
I still don't get the whole renting over buying thing. Me and my wife used to rent which was costing us £850 a month (before council tax, bills etc). Now over a year thats £8.5k. We rented for almost 2 years, which was like £13k give or take and on face value it went to no future investment.

We currently have just received our yearly statement for our mortgage and whilst most of the £8.5k was eaten up in interest there was still an amount which went on paying off the house itself (our mortgage is the same as what we used to pay in rent). I honestly understand the deposit thing being a restriction for many, but the flip side of the coin is the amount of dead money that goes with renting and saving up for that deposit.

Surely renting can only be looked as a very short term thing? or if you are young and have no plans of really settling down somewhere. Or if you do not want that financial commitment full stop.

I am not adverse to the other side of the argument, I guess from my own experience I cannot quite grasp in what situation it would pay not to go for a mortgage?
 
martinturner said:
SNIP
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The thing is now, rental rates are dead cheap, mortgages aren't. A mate of mine was looking at buying/renting a house last month. The house cost £250k to buy or £650 per month to rent.

In the early years the monthly interest on the mortgage before you pay any capital back is over a £1000 per month or averages over £500 per month over the 25 years or £350 more than the rental initially. He and his partner decided they were much better off renting and saving the £350 a month interest and £833 per month capital they would have paid on the house.

That way they would save £14k per year. The only way the house purchase would have become cheaper if the house increased in value by 4% every year if you take the stamp duty and fees into consideration which there is no guarantee. In two or three years they will have £40k saved up (unless they blow it on alavish lifestyle) which is certainly far more than the equity they would have built up in the house by then.

It used to be the case that when monthly rental costs >= mortgage costs, it did seem like dead money to rent but houses cost too much nowadays and that is no longer the case.
 
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fendi said:
This is the kind of BS that is keeping the current prices inflated.
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No. Nationwide like others lenders are offering EXISTING customers with negative equity the option of borrowing enough to clear the existing Mortgage and move. It's simply making the debt portable not giving new customers the ability to borrow 120% of the value of a property. Of those existing customers it's only those with the best repayment history that are considered.
 
Greebo said:
snip
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Interesting.

I think many expect to buy in an areas they are priced out of. When we rent we all have a tendancy to want to live in the best location. I was an example of that too, my old flat was £850 a month in rent living in Clifton, Bristol a couple of years back.

However, has I wanted to buy the flat it was considerably higher. My wife and I chose against it as we wanted a house over the flat and that obviously was even more money; so we sacrifed area and got a bigger house for what works out as the same money as what we were paying in rent. Now the area is not as pretentious as where I was, but it is more realistic to our earnings.

People in general tend to live to their means, therefore choose somewhere nice to rent. I think the key to getting on the ladder with renting, is to rent cheaply enough to firstly not make yourself miserable but more importantly be able to save significantly. For me the answer was simple as we desperately wanted to get away from magnolia ;)
 
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