No money house purchase

No

No, unless you got carried away in your too-good-to-be-true fairy tale and accidentally wrote "interest free" when you meant "interest only". You can get interest free credit card loans but only for a limited period. Mortgage loans? Those too, if you count cashback or other incentives as being the equivalent of no interest for the first couple of months.

But, and I appreciate this may come as a complete shock to you, people who lend you money do generally expect you not only to pay the "rent", but also to give it back in the end.

Here's an even better dream: You could scrounge around the auctions, and buy a house worth £100k for only £60k, but get an 80% mortgage, giving you £20k cash in hand with which to do it up and re-sell for £140k. Then use the £60k profit to buy the next house outright.

Sorry meant interest only

Len

Well, then the answer is yes, except it still doesn't quite mean "no money needed" because there will be fees and taxes to pay.

With a 100% loan/value ratio you'll suffer enhanced exposure to the risk of negative equity. If that doesn't bother you, go for it, if you can afford the interest. You might want to make sure you pay off the deposit loan PDQ, though, as its interest rate is apt to be rather less negligible than for the mortgage loan.

OK, so you mean interest-only. However, if you declare the loan for the deposit (which you'll have to do), the lender will probably restrict your mortgage offer. You'll be pulling yourself up by your own bootlaces.

Rob Graham

No Lender as far as I know will do a 100% self cert mortgage. Some of the dodgier ones will do 95%, but you will pay a premium rate.

Remember self cert is not the same as non status.

With Non Status they do not care what income you have.(Normally requires a bigger deposit, around the 25% mark)

With self cert they believe the income you tell them, but reserve the right to check it out, If they find you telling porkies you wont get the mortgage.

Most lenders base the 100% LTV figure on the lower of the Valuation or the purchase price, therefore getting it for £60k, would still be a 100% mortgage.

No problem. Try something like this: You buy it for 60k using 100% loan. You sell it to your accomplice (who also uses 100% loan) for 80k. You now have 20k cash in hand. You buy back from accomplice for 100k using 80% loan. Accomplice now has 20k cash in hand.

The last two steps may not be necessary if the 100% loan on 80k doesn't cost significantly more than an 80% loan on 100k, in which case you may as well get the accomplice to buy off you for 100k with a 100% loan, giving you 40k cash for renovation.

That's why I mentioned taking out a loan for the deposit so it was a 90% loan.

Len

The point is the lender will not want you to have borrowed more than

If it's an unsecured loan, you may be OK. It isn't so easy to establish that the loan was for that specific purpose.

People do get mortgage loans when they have HP loans etc, which if they didn't have and paid cash for the items would leave them with not enough money for the deposit.

Aye, but they'll get you through the back door. The outgoings on servicing those loans will be subtracted from your income, and in connection with the multiplier will lower the ceiling of how much they are prepared to lend (unless you're going for non-status, which wasn't being suggested here). If the purchase price (or 90% of the price as the case may be) is below that ceiling, then there is no problem.

Thanks for all the advice and I wondered with seeking an interest only mortgage on which repayments would be a lot less surely the lender would accept other loans - non-secured which only I willknow form the basis of deposit.

Len