X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Mortgages & Finance

    Personal loans as deposits on BTL

    Are there any barriers to using loans as deposits on BTL mortgages? . On first pass, it seems a great way of funding given low rates, assuming correct yield to cover btl and loan repayments.
    0
    0

    I think most lenders would have a dicky fit if they knew you were using a Loan for a deposit what your saying is its a 100% loan

    I know when ever I have applied for a Mortgage I have been asked to show where the deposit is coming from

    ie Cash in a Bank account or an ISA

    Solicitors do check on this when they are doing the transaction

    Im not sure if its mortgage fraud But If you haven't got the funds I think it may be classed as a fraud

    Im sure a broker will give you the professional view


    1
    0

    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    I do not think it is a criminal offence at all. I think what you mean is against the terms of lending. Not so long ago loans were 125% and that was not fraud
    0
    0

    I think it may depend on where you told the lender where the deposit is coming from

    on my last mortgage I had to show statements where the deposit was located

    When the Solicitor completed the transaction they wanted copies of the Bank Statement where the funds were drawn from

    If Fibs are being told it must be unlawful

    0
    0

    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    The vast majority ( if any ) of  lenders wont allow a personal loan as a deposit

    You will be asked on the app form where the source of the deposit came from 

    If  you lie about the source of that deposit yes  that`s a criminal offence

    If you tell the truth and say its from a personal loan then you wont get the loan

    1
    0

    Jonathan Clarke. http://www.buytoletmk.com

    I didn't say anything about lying though? I asked about barriers. From your reply, the barrier is that while lenders will allow secured loans as deposits, they will not allow unsecured loans
    0
    0

    I agree and that`s why I said if you lie ( just to flag up a kinda warning )

    People do do this then `lose` the loan for a bit and then it reappears

    And yes a loan which is secured against another property is sometimes acceptable

    Ive done many so in effect getting 100% finance . I built my portfolio on it 

    The rules have tightened though

    I`ve also taken gifts from  family for deposits in the early days and I`ve also gifted in turn to my family

    Gifts are acceptable to lenders - personal unsecured loans are not

    I agree the barrier can be seen as  unfair  but its a safety net and rules are rules



    0
    0

    Jonathan Clarke. http://www.buytoletmk.com


    0
    0

    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Lenders will want to know the source of the deposit.

    If they find out it is a loan, they will decline as its 100% finance.  They typically want to see that the borrower has 25% "skin in the game".

    If the source of the deposit is not disclosed, and it's actually a loan, and the lender later finds out, they will likely call in the loan as this is tantamount to mortgage fraud.

    0
    0

    But what is the difference between an unsecured loan and a loan against your property? I.E Equity release. Is that not still 100% finance? I am just curious as it feels that it is more of a policy barrier than anything else? Surely in both instances the lenders win?
    0
    0