rbs additional borrowing question?

gingerling

I have just been offered a mortgage through the RBS.

The house I have bought is a repo.
Which I managed to get for £76k the approx value of the house is £90k.
I have put down a 10% deposit so my mortgage is about £68k.

I have a few pieces of debt which I would like to pay off along with some money for home improvements.
What would be the best way to go about borrowing more.
The RBS said with my income they would give me up to £120,000.

beecher

The value of the house is surely £76k since that's what you paid for it? LTV is 90% - on that basis RBS won't give you any more than £68k. You'd be best to save up to pay off debt/home improvements.

gingerling

beecher wrote: »

The value of the house is surely £76k since that's what you paid for it? LTV is 90% - on that basis RBS won't give you any more than £68k. You'd be best to save up to pay off debt/home improvements.

How can I save when I have no money to save?

I dont understand.
So as there is equity in the house as if it were valued it would be around 90k. I wouldnt be able to get a loan side by side with my mortgage from the RBS?

beecher

If you have no money to save I'm at a loss as to why you're buying a property.

I don't know enough about repossessions to know how it'd work so hopefully someone else will be about to tell you if what you want to do is possible.

_Andy_

You are wanting to borrow more than the property is worth, this isn't going to happen.

gingerling

_Andy_ wrote: »

You are wanting to borrow more than the property is worth, this isn't going to happen.

Are you reading?
The property is worth 90k but I got it for 76k.
I am wanting to get a loan not a mortgage

~Beanie~

Who says it is worth £90K?

A property is worth whatever someone is prepared to pay for it. Obviously it is not worth 90K or someone would have paid that for it, it is worth 76K.

If you are looking for a loan anyway and not an increase to your mortgage, then apply to a lender for a home improvement loan. If you have no money to save though, how will you make the loan repayments?

_Andy_

gingerling wrote: »

Are you reading?
The property is worth 90k but I got it for 76k.
I am wanting to get a loan not a mortgage

Well excuse me for attempting to help.

In any case if the value was actually 90k then it would have sold for nearer that.

Frankly your attitude is rude and blunt so I'll step out now.

mystic_trev

gingerling wrote: »

Are you reading?
The property is worth 90k but I got it for 76k.
I am wanting to get a loan not a mortgage

Properties aren't worth anymore than the next person is prepared to pay!

By next year your house may well be worth 20% less than it is now.

As you've been quite rude to another person trying to offer advice, I'll be blunt too. What on earth made you decide to buy a house you obviously can't afford to maintain, whilst in debt?

skint_chick

What RBS meant was that they would lend you up to £120,000 based on you having a 10% deposit over and above that. If you have bought the house for 76k regardless of how much more it might be worth then they will only lend up to 90% of this. At this stage their valuer will not take into account that you may have got it cheap and it may be worth more.

The only thing you could do is wait for 6 months - usually the min time for extra borrowing - and then apply for extra borrowing based on your estimated valuation of 90k - then its up to the valuer that RBS use as to what the current value is and whether they will lend you extra for debt consolidation. You should speak to your mortgage broker/RBS contact to check their policy on this, but they should have already explained to you that what you're trying to do isn't possible alongside the purchase.

bobins

I think you have been given slightly a hard time here, I understand what you are saying as my situation isn't too dissimilar from your own.

I bought my first place in October at auction. A 4 year old purpose built penthouse that was repossessed and taken to auction by the bank.

In 2004 the property was first sold for £200,000, then was repossessed in early 2008 and put on the market for sale. I have a contact in the local estate agents who had the responsibility of selling the property for the bank and I know they there were numerous offers made, but an offer of £145,000 was initially accepted then at the last minute the bank pulled it off the market and decided to take it to auction. Obviously to get a better price.

I managed to buy the property at auction for £95,000!

Anyway my point being, when I got my mortgage the bank valued the property at £145,000 and NOT the £95,000 I paid for it. This enabled me to qualify for a 60% LTV product which gave me a better rate.

I understand every ones point here that a house is only worth what someone is prepared to pay for it and I agree! This doesn't mean however that every house sold is worth what it was actually sold for. In my case, someone was prepared to pay £145,000 and I bought it for £95,000 due to a very lucky (quiet) auction room on the day!

The fact that the bank sent round their own valuers AFTER I had bought it at auction for £95,000 and still valued it at £145,000 backs up my point!

My advice to you however would be to talk to your bank directly about a further advance or a top up etc.

Many Thanks,

B