credit card debt
Question
Would a bank consider giving a mortgage, if the 10% deposit was raised by a loan or credit card?
This would be for a 90% mortgage (yes there are 90% mortgages and the rates not to bad) and assuming the bank didn't realise the debt this person has was used for the deposit... I know it's a pretty daft ideal and a lot of people will say if you can't afford the deposit you shouldn't even think about it, but from another angle, If you can't currently afford a 10% deposit and you want to get on the housing ladder before prices increase, shouldn't you try it as in a years time when you've got the deposit house prices will have probably risen quite a bit... I would be able to meet all repayments, have a good credit history and only spend about 35% of my monthly income...
2 weeks ago - 4 answers
Best Answer
Chosen by Asker
The normal process is that - The bank send your mortgage funds to your solicitor - you pay the extra - i.e. the deposit funds to your solicitor Your solicitor then send all the money to the house sellers solicitor. You do not need that deposit up front - you only need it as cleared funds on the day of exchange. The property you wish to buy is surveyed the bank will grant a mortgage in principal at whatever percentage say 90% of the valuation. They would not even ask about what where why your deposit. They would not ask for evidence that you had it - that is your responsability. It may well be risky in that you have then high outgoings per month - but then maybe you spend less than others and your home would be the main thing. Whatever happens to house prices or the value of your home is of no consequence - you still have the debt. If the value of your house increased in a year or 2 - you could then remortgage and clear or partially clear the credit card debt. But figure this out - the value of the house would have to rise by at least 15% so that you could then - remortage at 90% of value and have anything like the card debt. Remember that ther eis often a higher card interest date for cash - as opposed to purchases. bUT MANY CARD COMPANIES NOW OFFER CHEQUES you can write and pay into a bank account - just do not pay it into the account you are useing for the bank mortgage. The cheques are usually for a maximum of a percentage of your total credit limit on that card. you will also have solocitor fees and other charges so find out what they will be. Given that your other questions relate to gambling and debts etc I would tread very warily in any sort of financial commitments that you may not be able to maintain. However maybe you need a focus and real time commitment to get away from the gambling. which a s you say - previous Q - as cost you upwards of 15K in the past years.
by bennachie1
2 weeks ago
Asker's Rating: 
Other Answers
If the banks do their credit checks right, then you have no chance, the credit bill would be detected, and although you have a good repayment record, lying to the bank as to where the money came from would automatically block your application, and probably affect your credit rating for years to come.
by mike-from-spain- 2 weeks ago
Technically, it would be ok, because you would be giving them 10% of the money. However, the bank would conduct a fairly thorough credit rating assessment and if you answered all questions honestly, would score the debt against your rating (or, if you hadn't yet raised the load, would see you didn't have the deposit). That wouldn't necessarily rule you out, but it would be a concern. They would be very likely to ask further questions. In spirit, if you told them the whole story, I think they'd say no. Obviously, credit car companies are a very expensive way of carrying long term debt, If you can really cover the mortgage, you can still get 100% mortgages from certain brokers.
by Andrew L- 2 weeks ago
Absolutely 100% no way. This would be a bad idea for the bank and for you. House prices are not going up any time soon. You would be just setting yourself up for disaster.
by MadMan- 2 weeks ago