Loan to become a cash buyer - is this possible? Help please!

p.dowd · 12 January 2018 at 12:45AM

Hi all,

Having looked online, I am struggling to find an answer to my query and some information would be greatly appreciated please.

I am looking to purchase a property somewhere between £115,000.00 - £125,000.00ish.

I have roughly £102,000.00 in savings (creeping up each payday) - I want to buy a property as soon as a suitable one is on the market and my offer accepted.

Is there a way I can take out some sort of unsecured loan (rather than a traditional mortgage) which would allow me to be a cash buyer? Ideally the loan would be over a short term, perhaps over 4 - 5 years, with the ability to overpay as much as I can - I then intend to pay it back as quickly as possible, hopefully within two - three years and then be mortgage/debt free.

I am a Conveyancer so the legal costs will be rock bottom... I just don't want a mortgage if it can be helped as that attracts a lot of lender arrangement fees and extra costs which may be avoided - plus it would be brilliant to be mortgage free!

Comments are really appreciated!

Kind regards

Pete

anto164 · 12 January 2018 at 2:09AM

Getting a loan instead of a mortgage is going to be more expensive. You can get real good deals on mortgages atm, and overpaaying will bring the costs down too.

And also, all loans ive seen cannot be used for property purchases.

However there shouldnt be a reson why you cant get a loan for a 'new car' instead

Richey_ · 12 January 2018 at 8:54AM

anto164 wrote: »

However there shouldnt be a reson why you cant get a loan for a 'new car' instead

Except that this is called fraud.....

Good advice until that point.
There is no reason why you cannot do what you say, but you may not be able to find a lender who will loan for a house purchase. I’d be considering a mortgage and then heavily over pay it as soon as you can. Well done for saving up so much money :beer:

DCFC79 · 12 January 2018 at 9:26AM

Very unlikely to happen, first off theres no guarantee you will be offered the amount you want over 5 years and second you might not even get the amount needed, lenders can be and are very picky.

Why not play things on the safe side and get the lowest amount and rate for a mortgage as you can.

If you would like a variety of replies ask the question on the house buying forum.

somethingcorporate · 12 January 2018 at 9:39AM

Compare mortgage rates and loan rates. Mortgages are far cheaper and would probably offset the upfront costs of fees (or just get a fee free mortgage). Loans are not designed for what you are asking for it for but mortgages are.

ViolaLass · 12 January 2018 at 10:14AM

p.dowd wrote: »

plus it would be brilliant to be mortgage free!

But you wouldn't be mortgage-free would you? I mean yes, you wouldn't have a mortgage but you would still have a loan that you got in order to buy your property, which is effectively the same thing.

And it'll cost you more.

dealer_wins · 12 January 2018 at 10:16AM

I understand where the OP is coming from, and as long as you accept it will be more expensive than getting a mortgage I dont think its a bad idea really.

No cumbersome mortgage application and procedure, just a cash buyer, and in that position you may be able to knock money of the asking price of the property too, especially as prices are a bit shaky at the moment and its a buyers market!

Enterprise_1701C · 12 January 2018 at 10:39AM

How long would it take you to save the odd £20 - £30,000?

Of course you might be able to use the fact that you are a cash buyer as leverage to get the price down to the money you have available, especially if you go for a do-er upper.

enthusiasticsaver · 12 January 2018 at 10:44AM

Borrowing on an unsecured basis to buy a property is unusual and I think most lenders would frown on it although I am not sure why. The interest rate would be a lot higher too so I would either go for a small mortgage and repay asap or wait and save until you have enough.

p.dowd · 12 January 2018 at 2:37PM

I've spoken with a mortgage broker at work - given the lower interest rates on a small mortgage and some do not charge arrangement/survey fees - its better to go for a small mortgage over a short term (say 5 years) and overpay it like mad.

So my query is now answers - thanks to all who commented!

ViolaLass · 12 January 2018 at 3:13PM

If the interest rate is suitably low, you might not even want to overpay. It might make more sense to save the money elsewhere (or even invest it).

Loan to become a cash buyer - is this possible? Help please!

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