We are about to buy a house, but do not have enough money for a deposit....?

Question

Is it better to first have the mortgage agreed and then apply for a loan or the other way round??
I am worried that if I apply for a loan it will affect the approval of the mortgage..

Our current pre-approved mortgage is up to £165.000 and the loan we would like to take is £8.500

Answer 1

You want ever no till you go and speech to someone at a bank or a loan co........Good luck to you..... @

Answer 2

Any other debts you have are deducted from your your annual wage calculation before the mortgage calculation is worked out so it's better to get the mortgage first, then the loan if you must get a loan for the deposit. Don't secure the loan on the house though. You could lose your house for want of missing a single repayment on a relatively small loan.

Answer 3

Personally I'd be getting my finances in order first before over commiting on a house that will drain you of all your money.

Banks etc are all too happy to lend you too much these days, remember the borrowing rate can always rise and you wouldn't want a repossesion if you couldn't afford the payments.

If you need a loan as well as a mortgage I would suggest you are borrowing beyond your earnings and this is a very foolish thing to do unless you know you are due to acquire a large amount of money in the near future to clear some of this debt.

Good luck with your choices.

Answer 4

Why not just get a 100% mortgage? - Most people who cannot afford the deposit do and it makes the first years easier. Otherwise you'd be paying off a loan and a separate mortgage.

Answer 5

You would be better to have the mortgage agreed first as this could affect you credit rating and the amount a lender will lend you otherwise. Alternatively you could consider mortgage lenders that will lend you up to 125% of the property value to cover costs such as deposit and furniture. Mostly - make sure you can afford all repayments. Take independent advice.

Answer 6

Get a 100% (or more) mortgage, it will probably cost less in terms of repayments (because it is secrued) and be a lot easier to manage.

Also, given the recent (and likely to be continuing) rate rises, think very carefully about how much debt you can afford to take on. Just because a lender is willing to give you £165k doesn't mean you have to spend that much! Whilst there is some wisdom in stretching yourself to get on the ladder, its not worth it if you can't afford to be there with a few more quarter percent rises.

Answer 7

If you need a loan in order to get a mortgage I question whether you should you be taking on such a commitment at all.

Answer 8

You may be getting into something which could end up putting you under alot of pressure in the months to come.

Maybe you should look at a smaller, cheaper house which will be more affordable.

Spend money on doing the house up and wait for a couple of years before making a step up.

Start small and move up.

Answer 9

speak to a mortgage broker, its always the best way.
Tell them all your circumstances and they will find a way around it. You will be surprised what they can do.
There are some lenders who offer you cash back after paying the deposit, and many other methods of incorporating your deposit into your mortgage.

Answer 10

i complete on friday (yay) we didnt have enough monay for a deposit and just got a 100% mortgage which wa easier than mortgage and a loan

Answer 11

why dont you save for the £8,000 it might take a while .just save every penny you can . then apply.
as you are starting on the backfoot straight away with a loan and a mortgage