Hi all
I have just been informed my landlord is going to sell his property
Can you use a personal loan here as the deposit for a home loan?
Thanks
Hi all
I have just been informed my landlord is going to sell his property
Can you use a personal loan here as the deposit for a home loan?
Thanks
Isn't that a debt being applied for another debt? If you're wanting another loan, better show you have more income (or collateral) to warrant getting into more debt.
I'm not quite sure that answers my question. In the UK it is (was) acceptable to use a loan for the deposit on a home. I just need to know if thats the case here.
Ta
I don't know the answer, but sorry to hear what's happened to you. That's happened twice to my son and his family, once when his wife was just home from hospital with a new baby after a caesarean.
The loan used for a deposit all depends what the 'personal loan' is? I remember some years ago it was popular to get a "2nd line of credit" which is essentially borrowing more money from the bank to do (ie. renovations on the house) - another cliche is 'unlocking your equity in your home mortgage'. Essentially, the previous loan is tied to the asset which has secured value. During the housing bubble boom, housing prices were rising so fast that places like in America, you would be a fool NOT to leverage yourself into another house (by taking out another mortgage that is secured against the original house loan).
What i'm getting at is what do you mean by "personal loan"? Because unlike a house, it can be for a car, personal belongings, etc (which is depreciating equity) and no bank will use that as collateral for a house.
I don't think that you can take out a personal loan for a deposit as the banks look at your total indebtedness when working out multiples. If you take out a loan and then provide that to the other bank then the bank will have to take into account repayments on that loan and the fact that your debt position is worse than it would be.
My parents needed to cancel a credit card they had before they were able to borrow for a house purchase as the bank wouldn't loan them the money when they had $250,000 of credit limit available to them on the card - even though there was nothing owing on it!
yes and no, officially no practically yes...
When I bought my first house (uk) I did 't have a deposit, the banker asked for a deposit, when I said I didn't have the cash and I'd like a personal loan she winked at me and said sorry sir what was that you need a personal loan for a car!
we can do that but we can't give you a mortguage without a deposit,,,, she did me a favor, a low...no deposit mortguage is way more expensive than a relatively small personal loan, good luck with your buying a house, even if not this one maybe the next ay
just to add yes it's true that overall debt is considered in your application but self investment carries more weight.
bob
why would you borrow unsecured at 18% ish when a secured loan is say 6%?
bnz will do a 100% mortgage in exceptional circumstances but it's gotta be a fiercely strong application. still take on board Duncan's comment as its fundamentally what the bank will be asking.
Why would you want to borrow at a high rate, to then get a loan which would be charged at a lower rate?
The best idea would be to contact a mortgage broker who will know of any 'deals' banks may be offering or limits for low deposit loans - despite them saying they do not like 5% deposit loans, they will do them. It really gets back to your ability to repay and the amount you have for a deposit is almost a secondary concern.
I know a couple mortgage brokers here in Auckland if you want to speak to them, if I can find their contact details again! And a mobile manager at ANZ who was pretty good at getting deals done that looked otherwise impossible.
( I do not bank with the ANZ if anyone thinks I am pushing one bank over another - she was/is just a good operator and happened to work for them)
carey