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  • FIRST POST
    • adam2456
    • By adam2456 12th Jun 17, 2:31 PM
    • 6Posts
    • 0Thanks
    adam2456
    Extending an existing loan in my wife's name to afford stamp duty?
    • #1
    • 12th Jun 17, 2:31 PM
    Extending an existing loan in my wife's name to afford stamp duty? 12th Jun 17 at 2:31 PM
    Hi Everyone,

    My wife and I are desperate to get on the property ladder and take advantage of the help to buy scheme on a nearby property development so we can finally give our children a stable home (moved twice in last 4 years due to landlords!)

    We have quite a lot of debt to be paid off in the form of unsecured loans, a car PCP and credit cards but we have never missed a payment on any of these or any other bills etc. One of these loans in my wife's name is due to finish later this year and the company have naturally started sending her offers to extend it.

    I'm fortunate enough to have a stable job which brings in good salary allowing my wife to stay at home to look after the kids (two hyperactive toddlers!)

    Today, we have £25,000 in deposit and are currently saving around £1000 per month after being frugal (thanks to this site). There is a nearby development which has houses for sale under the Help To Buy scheme for £400,000 which would require a £20,000 deposit + another £10,000 stamp duty + additional costs including carpets, solicitors etc... I've been told I could be eligible for a mortgage in only my name (on help to buy) to cover a house up to £430,000. The real kicker is the monthly mortgage repayments would only be another £200 pcm on top of what we pay in rent today.

    We really need to get our of our current living situation - the house is damp, has silverfish, tiles are falling off the walls, there is no garden for the children and the landlord only needs to give us 2 months notice to evict.

    How bad would it really be for my wife to extend her existing loan by another £10,000 to enable us to have that upfront cash now to start looking at houses? What would be the impact when we will be applying for a mortgage in my name only?

    I realise this goes against most advice out there but we need to move asap and I don't want another horrid overpriced rental for our children.

    Thanks
    Adam
Page 1
    • csgohan4
    • By csgohan4 12th Jun 17, 2:41 PM
    • 3,767 Posts
    • 2,351 Thanks
    csgohan4
    • #2
    • 12th Jun 17, 2:41 PM
    • #2
    • 12th Jun 17, 2:41 PM
    don't push yourself too much to buying a house you may not afford. Interest rates may sound good at present, but who knows in the future

    Also the HTB loan is a loan and your only delaying the inevitable. Have a look at the scheme as you will pay back more than you put in as they take a percentage of what the house is worth not what you put in.
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • adam2456
    • By adam2456 12th Jun 17, 3:08 PM
    • 6 Posts
    • 0 Thanks
    adam2456
    • #3
    • 12th Jun 17, 3:08 PM
    • #3
    • 12th Jun 17, 3:08 PM
    Thanks I appreciate that, and you make some very sensible points. I've seen the historic (and frightening) interest rate rises that hit previous generations.

    The issue here, is the need for us to provide a nice home for our children now, not when they are grown up. Renting is effectively throwing money down the drain, the only real advantage being the freedom to move quickly if required.

    Even if we were to pay more back to the government that they loaned via HTB, and mortgage rates were to rise, I believe we would still be overall financially better off than if we stay renting and watch the house prices climb ever higher.

    Its such a frustrating place to be in
    • csgohan4
    • By csgohan4 12th Jun 17, 3:27 PM
    • 3,767 Posts
    • 2,351 Thanks
    csgohan4
    • #4
    • 12th Jun 17, 3:27 PM
    • #4
    • 12th Jun 17, 3:27 PM
    as long as your aware of this re HTB and it's pitfalls.

    Some people take the wrong of the stick and cry mis sold and complaints e.t.c, when they haven't fully understood the cons and the T+Cs
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • smem18
    • By smem18 12th Jun 17, 5:23 PM
    • 27 Posts
    • 8 Thanks
    smem18
    • #5
    • 12th Jun 17, 5:23 PM
    • #5
    • 12th Jun 17, 5:23 PM
    I think you would really need to at least get the decision in principle in the bag to somewhat verify that you can get a mortgage large enough to cover the costs. I would recommend you speak to a good mortgage broker and go through your options. You mention credit cards and some other things which might affect your application. You need to look at your credit reports carefully (don't pay too much attention to scores, look at the detail in your report) for any thing that might impact your application. The last thing you want to do is extend the loan, only to find out you can't get the property you want anyway.

    Also, I know that you really want to buy (I get it - I just bought after years of renting) but you say you are saving £1000 a month. That is so good and so much money! Within a year you will actually have saved up enough for stamp duty yourself, and you could also work on getting rid of the credit card debts etc. Personally, I am thinking that you shouldn't necessarily panic and buy right now. You could save up and get yourself into a way better position financially and be ready to take the plunge within a couple of years
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