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  • FIRST POST
    • Caroline_83
    • By Caroline_83 6th Dec 17, 8:42 AM
    • 26Posts
    • 9Thanks
    Caroline_83
    Can we borrow cash on top of mortgage?
    • #1
    • 6th Dec 17, 8:42 AM
    Can we borrow cash on top of mortgage? 6th Dec 17 at 8:42 AM
    Hello!

    Currently house hunting as a first time buying and finding it all very stressful. BUT itís all part of the experience I guess. Haha.

    Just a quick question....

    When we take out a mortgage, can we borrow a lump sum of cash in addition so that we may spruce the place up?

    For example, we are interested in a house that we could possible get for £175k. We have a £20k deposit and so would need to only borrow £155k BUT would the mortgage lender allow us to borrow £165k so we have £10K to re-render etc?

    Thanks in advance.
Page 1
    • kingstreet
    • By kingstreet 6th Dec 17, 9:12 AM
    • 32,360 Posts
    • 17,371 Thanks
    kingstreet
    • #2
    • 6th Dec 17, 9:12 AM
    • #2
    • 6th Dec 17, 9:12 AM
    No. You would simply reduce your deposit.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • glosoli
    • By glosoli 6th Dec 17, 9:14 AM
    • 675 Posts
    • 388 Thanks
    glosoli
    • #3
    • 6th Dec 17, 9:14 AM
    • #3
    • 6th Dec 17, 9:14 AM
    You would just put down a £10,000 deposit and apply for a 95% mortgage.
    • Caroline_83
    • By Caroline_83 6th Dec 17, 10:59 AM
    • 26 Posts
    • 9 Thanks
    Caroline_83
    • #4
    • 6th Dec 17, 10:59 AM
    • #4
    • 6th Dec 17, 10:59 AM
    I see. A colleague of mine managed to do this a few years ago. Maybe things have changed?

    And would reducing our deposit make a difference to the lending agreement like the interest rates or anything?
    • TrickyDicky101
    • By TrickyDicky101 6th Dec 17, 11:03 AM
    • 2,824 Posts
    • 1,828 Thanks
    TrickyDicky101
    • #5
    • 6th Dec 17, 11:03 AM
    • #5
    • 6th Dec 17, 11:03 AM

    And would reducing our deposit make a difference to the lending agreement like the interest rates or anything?
    Originally posted by Caroline_83
    It may reduce your pool of potential lenders and could well lead to a higher interest rate on the borrowing.

    If you are using a broker, this is what (s)he should be advising?
    • Neutrinno
    • By Neutrinno 6th Dec 17, 11:13 AM
    • 151 Posts
    • 69 Thanks
    Neutrinno
    • #6
    • 6th Dec 17, 11:13 AM
    • #6
    • 6th Dec 17, 11:13 AM
    I see. A colleague of mine managed to do this a few years ago. Maybe things have changed?

    And would reducing our deposit make a difference to the lending agreement like the interest rates or anything?
    Originally posted by Caroline_83
    If that was the case then things have definitely changed.

    Yes the rates would be higher compared to a larger deposit (10%+) and you would be treated as a higher risk to the lender when applying.
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Caroline_83
    • By Caroline_83 6th Dec 17, 12:38 PM
    • 26 Posts
    • 9 Thanks
    Caroline_83
    • #7
    • 6th Dec 17, 12:38 PM
    • #7
    • 6th Dec 17, 12:38 PM
    So would it be best to stick with putting down our £20k deposit? To save money in the long term?
    • mostlynice
    • By mostlynice 6th Dec 17, 12:42 PM
    • 17 Posts
    • 10 Thanks
    mostlynice
    • #8
    • 6th Dec 17, 12:42 PM
    • #8
    • 6th Dec 17, 12:42 PM
    I see. A colleague of mine managed to do this a few years ago. Maybe things have changed?
    Originally posted by Caroline_83
    This was the main reason Northern Rock found itself in the touble it fell in, letting people have 110/115/120% mortgages
    • clairebeth
    • By clairebeth 6th Dec 17, 4:25 PM
    • 140 Posts
    • 52 Thanks
    clairebeth
    • #9
    • 6th Dec 17, 4:25 PM
    • #9
    • 6th Dec 17, 4:25 PM
    Your colleague may have been remortgaging rather than being a first time buyer with a cash deposit? They may have, for instance, released equity they already had in the property?

    Put the £20k deposit down. Buy your furrnitire second hand or in the bargain corner at IKEA. Pay for home improvements as and when you can.
    • enthusiasticsaver
    • By enthusiasticsaver 6th Dec 17, 5:18 PM
    • 4,826 Posts
    • 9,111 Thanks
    enthusiasticsaver
    Just before sub prime crisis in 2008 foolish lenders like northern rock were doing daft things like lending 120% mortgages. Some of those borrowers are still in negative equity now and locked into bad rates.

    You are best off putting the highest deposit you can down to secure low mortgage rate. Save up for home improvements or use 0% credit card if affordable. Second hand furniture or diy if you are competent for improvements.
    2 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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