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  • FIRST POST
    • p.dowd
    • By p.dowd 11th Jan 18, 11:45 PM
    • 5Posts
    • 2Thanks
    p.dowd
    Loan to become a cash buyer - is this possible? Help please!
    • #1
    • 11th Jan 18, 11:45 PM
    Loan to become a cash buyer - is this possible? Help please! 11th Jan 18 at 11:45 PM
    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
Page 1
    • anto164
    • By anto164 12th Jan 18, 1:09 AM
    • 137 Posts
    • 67 Thanks
    anto164
    • #2
    • 12th Jan 18, 1:09 AM
    • #2
    • 12th Jan 18, 1:09 AM
    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_
    • By Richey_ 12th Jan 18, 7:54 AM
    • 301 Posts
    • 344 Thanks
    Richey_
    • #3
    • 12th Jan 18, 7:54 AM
    • #3
    • 12th Jan 18, 7:54 AM
    However there shouldnt be a reson why you cant get a loan for a 'new car' instead
    Originally posted by anto164
    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. Id be considering a mortgage and then heavily over pay it as soon as you can. Well done for saving up so much money
    • DCFC79
    • By DCFC79 12th Jan 18, 8:26 AM
    • 30,589 Posts
    • 19,347 Thanks
    DCFC79
    • #4
    • 12th Jan 18, 8:26 AM
    • #4
    • 12th Jan 18, 8:26 AM
    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.
    Last edited by DCFC79; 12-01-2018 at 8:28 AM.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • somethingcorporate
    • By somethingcorporate 12th Jan 18, 8:39 AM
    • 8,859 Posts
    • 8,562 Thanks
    somethingcorporate
    • #5
    • 12th Jan 18, 8:39 AM
    • #5
    • 12th Jan 18, 8:39 AM
    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.
    Thinking critically since 1996....
    • ViolaLass
    • By ViolaLass 12th Jan 18, 9:14 AM
    • 5,205 Posts
    • 7,213 Thanks
    ViolaLass
    • #6
    • 12th Jan 18, 9:14 AM
    • #6
    • 12th Jan 18, 9:14 AM
    plus it would be brilliant to be mortgage free!
    Originally posted by p.dowd
    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
    • By dealer wins 12th Jan 18, 9:16 AM
    • 5,610 Posts
    • 10,541 Thanks
    dealer wins
    • #7
    • 12th Jan 18, 9:16 AM
    • #7
    • 12th Jan 18, 9:16 AM
    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!
    All replies are super fluffy and nice, and newbies are so lovely and welcome. PPR never again!
    • Enterprise 1701C
    • By Enterprise 1701C 12th Jan 18, 9:39 AM
    • 18,548 Posts
    • 201,666 Thanks
    Enterprise 1701C
    • #8
    • 12th Jan 18, 9:39 AM
    • #8
    • 12th Jan 18, 9:39 AM
    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.
    What is this life if, full of care, we have no time to stand and stare
    • enthusiasticsaver
    • By enthusiasticsaver 12th Jan 18, 9:44 AM
    • 5,123 Posts
    • 9,774 Thanks
    enthusiasticsaver
    • #9
    • 12th Jan 18, 9:44 AM
    • #9
    • 12th Jan 18, 9:44 AM
    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.
    Debt free and mortgage free and early retiree. Living the dream

    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
    • p.dowd
    • By p.dowd 12th Jan 18, 1:37 PM
    • 5 Posts
    • 2 Thanks
    p.dowd
    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
    • By ViolaLass 12th Jan 18, 2:13 PM
    • 5,205 Posts
    • 7,213 Thanks
    ViolaLass
    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).
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