Has anyone done or heard of taking out a personal loan to cover the deposit for a mortgage? Our broker was telling us about although a little hesitantly however said some banks are ok with it. We can service a loan over and above but it's just coming up with the deposit will take a while.
Has anyone done this?
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07-06-2016 14:46 #1
07-06-2016 15:03 #2
Most banks will want to see evidence that the deposit was genuine savings or a gift from family certified with a stat dec. But you can always try! The repayments on that may significantly lower your borrowing capacity too.
07-06-2016 16:06 #3
I'm thinking the deposit you need would be a significant amount which to have a personal loan for would require security. It's not something I would do personally. If your able to service a mortgage over and beyond then you should be able to save for your deposit which I think is a better way to go.
07-06-2016 16:35 #4
I highly doubt the banks would lend you a mortgage on a borrowed deposit , the personal loan itself would cut into your borrowing power and if you default on all the loans you technically have zero equity in the home , do a lot of research and get a second opinion from another broker as it sounds very strange
07-06-2016 16:41 #5
Like what has already been said most banks want to see a ****** of savings to prove the deposit was yours to start with not a loan from a bank or even a family member as its still classed as a debt
07-06-2016 16:50 #6
Having a personal debt of that size will significantly reduce the amount you can borrow and will also reduce your chances overall of getting the loan.
We are in a similar position of being able to afford a modest mortgage but the deposit is slow going having to pay rent as well. I would never borrow the deposit, you'll pay heaps of interest on a personal loan and on paper it looks bad.
07-06-2016 18:53 #7
Rent can now be taken into account in lieu of genuine savings and some banks do an unsecured personal loan for the amount we need but I think it is best to wait! Was just seeing if anyone had done it
07-06-2016 19:33 #8
honestly, if you're needing to borrow for the deposit id be seriously questioning whether buying a house and taking out a home loan is the right thing to be doing right now.
why have you got no savings? yes it's tough going and takes a while, but I don't believe a personal loan is the way to go. an unsecured personal loan rate will be quite high, plus you'll have your home loan repayments.
I'd be surprised if the banks were ok with this to be honest.
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07-06-2016 19:42 #9
We sat with our bank a few months back to get a rough idea of how much more we needed. We had found something that we loved and by the banks calculations we were only $5k short. They said we could either have someone go guarantor, accept a 'gift' from a friend/family member or borrow the money on top of our existing personal loan and deposit it in to our savings in a few separate lots.
We decided to continue saving. It is so so hard but like I tell dh everyday, have patience. The wait will be worth it.
07-06-2016 19:52 #10
By Patience86 in forum Family FinancesReplies: 29Last Post: 20-06-2015, 09:22
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