Funding a deposit?

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    Funding a deposit?

    Hello all i am after some genuine advice off people who know what they are on about, hence i am here!

    so the problem i have..
    have found a property at auction, guide price is £200,000 but honestly i think it will go for closer to £300,000 (bare in mind i have not seen the legal pack yet so there could be some hidden secrets)
    It needs work but the bank have said i can have a mortage for £340,000.

    Trouble i have is the deposit of 10%, if it goes for what i would say is my max £300,000 i would need to put £30,000 down on the day, the property would need work so want some cash flow so £30,000 plus fees is just not viable for me. The mortgage will accept 5% (ie £15,000)

    so my question, is there a form of lending to cover the 10% deposit? Or even 5% of it if i was to win the bid? I don't really want to go for a personl loan as i am unsure how this would affect the mortgage aplication and of cause i could not just ring the bank up on the day to release the funds there and then.

    sorry for the long post, just wanted all the info down.
    Thanks all!

    #2
    A slightly tangential response, but this is a property market ripe for implosion with a lot of blood on the carpet.

    If you really do not have capital to fund £10K here and there what are you thinking buying properties -- what exactly will you do when the roof suddenly needs 10K or repairs, or you need a new boiler, or a tenant stops paying for 2 months.

    Comment


      #3
      Don't buy what you can't afford. Simple!

      Comment


        #4
        I agree with Gordon, as a novice I do not believe you should be speculating with such a property, even professionals get caught out occasionally with cost overruns and if capital is tight your planned endeavours could quickly disappear.
        get back to basics and always have an exit route which doesn’t involve a distressed sale.

        Comment


          #5
          if you can raise a mortgage for such a huge amount, why are you throwing all your eggs into this one basket? The yield will be lower in comparison to a couple of properties a third the price leaving you enough cash to give you any liquidity you may need for the unexpected.

          Comment


            #6
            What are youthinking of ! ! !

            Puting down £30,000 deposit, then borrowing £ 270,000 !
            Getting up to £ 1000 per month rent, but that goes to pay off your mortgage, and is not profit.

            assuming you want to let it out ?, as this is a Landlord forum.

            I started a business over the internet for £ 300 from my back bedroom, then sold the business 6 years later because it undercut everone else so it was bought to get me off the net.

            Just stated another one, cost £ 50,000 over 2 years from my back bedroom, and many trips to the "States" but i recover my total outlay in 3 to 7 years, completly,

            Borrow money to start a business where you have more than one customer per year ( one tenant stays 1 year = 1 customer )

            If you want property overseas, I can give you 6 detached houses for £ 300,000, refurbished with tenants.
            I am not advertising, I am putting your business proposal ( assuming you want to let ) into perspective.

            Comment


              #7
              Originally posted by ram View Post
              overseas, I can give you 6 detached houses for £ 300,000, refurbished with tenants
              where's that then?

              this wasn't quoted from advertising by Blackmore Bonds was it

              Comment

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