Home Buyer Assist?
Discussion
A local estate agent has recently started offering this service - apparently James Khan from Dragons Den is one of the guys behind it.
Basically its a 0% loan to home owners and buyers - from the estate agent....
Now I was under the impression that taking a loan to pay for or to put towards a deposit was a big no no in house buying circles and was frowned up on by lenders?
Or is it now an acceptable way to get together a deposit?
(I know the PDF also mentions other reason for taking the loan, but either way surely its not a good idea?)
http://www.blundells.com/blundells/press_releases/...
Basically its a 0% loan to home owners and buyers - from the estate agent....
Now I was under the impression that taking a loan to pay for or to put towards a deposit was a big no no in house buying circles and was frowned up on by lenders?
Or is it now an acceptable way to get together a deposit?
(I know the PDF also mentions other reason for taking the loan, but either way surely its not a good idea?)
http://www.blundells.com/blundells/press_releases/...
The main issue with it is that it will affect your affordability due to the added repayment.
Assuming it would be an unsecured loan, they will want it back sharpish, therefore any significant sum is going to give you a hefty repayment, if the term is 3 years.
Therefore if your income is tight enough that you can't afford to save a deposit then this isn't really going to help you...
Assuming it would be an unsecured loan, they will want it back sharpish, therefore any significant sum is going to give you a hefty repayment, if the term is 3 years.
Therefore if your income is tight enough that you can't afford to save a deposit then this isn't really going to help you...
It seems to be a branded version of this product:
http://www.look4aproperty.com/money/home-buyer-fin...
The product is marketed there as only to be used for covering stamp duty and legal fees, although it says it would free up funds to increase a deposit, or spend that money elsewhere.
The marketing leaflet posted isn't saying or recommending that you can take the loan for your deposit, although it does say you can simply borrow the money and put it into savings so they may not actually ask what the money will be used for (although that would make for a strange application process).
As mentioned, the repayments would need to be declared to the lender, and also the source of the deposit, and I doubt many lenders would be happy with one of these loans funding it.
http://www.look4aproperty.com/money/home-buyer-fin...
The product is marketed there as only to be used for covering stamp duty and legal fees, although it says it would free up funds to increase a deposit, or spend that money elsewhere.
The marketing leaflet posted isn't saying or recommending that you can take the loan for your deposit, although it does say you can simply borrow the money and put it into savings so they may not actually ask what the money will be used for (although that would make for a strange application process).
As mentioned, the repayments would need to be declared to the lender, and also the source of the deposit, and I doubt many lenders would be happy with one of these loans funding it.
Edited by Gareth79 on Monday 3rd January 02:36
Dan_1981 said:
So taking a loan to pay a deposit isn't so bad in itself, more in how it effects your "affordability" rating?
If you can afford the repayments along with the mortgage there's no reason why it's not an ok idea?
In principle, it's fine, as long as your income is sufficient to maintain both.If you can afford the repayments along with the mortgage there's no reason why it's not an ok idea?
They aren't just going to give you an unsecured interest free loan for nothing so I'd be looking into what the Estate Agent will do to ensure they maximise profit from you, such as insisting you using their mortgage advisor and conveyencers etc, all of which they will get kick backs from.
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