Which lenders will allow us to add stamp duty to our mortgage?

Fay

Hi guys
We have been lucky enough to manage to sell our house in these difficult times and are now looking for mortgages. We have a bit of a dilema, we are on good money between us but don't have a lot of savings beside us...so either we have a deposit for a more expensive house IF we can add the stamp duty to our mortgage or a deposit + stamp duty for a small house in a less desirable area.

We would ideally like to go for a better house in a better area as we don't want to move again in the next few years as we would like to start a family. But we also realise that adding stamp duty to our mortage isn't ideal.

Does anyone know which lenders would consider letting us add stampt duty to the mortgage? Or anyone have any good ideas to help us out?

Many thanks for your advice.

opinions4u

Lenders will advance you a maximum loan against the value of the property.

Typically 90%, sometimes 85% or 95%.

They will not go above this (with the very occasional exception of a lender who will let you add a product fee to the debt).

It's very simple. You need to have your deposit, legal fees, stamp duty, survey fees and (in most cases) product fees saved up.

As a former mortgage underwriter I was far less likely to sign off the application if the borrower was unable to show that they could fund all their homebuying expenses. If you need to borrow for stamp duty, can you really afford the mortgage?

xyellowx

a "better house in a better area" will come with a bigger mortgage if you cant find the stamp duty money how do you plan to pay the higher mortgage repayments?

beecher2

Why not rent cheaply until you can build your savings up? The Debt Free Wannabee forums can help you save as much as possible towards your goal

Fay

Thanks for the helpful advice. We can easily afford the mortgage repayments on the higher houses but due to falling house prices we didn't get much money 'out' of our house, hence our savings have gone to the deposit, leaving us with not enough for stamp duty.

Senior_Paper_Monitor

Stamp Duty is not included in the valuation - the lender will lend against the valuation.

Stamp Duty has to be funded externally from the mortgage (as do the deposit, some fees, moving costs etc)

It is as simple as that - no way round it (unless you want to buy at under Stamp Duty threshold)

xyellowx

Thanks for the helpful advice. We can easily afford the mortgage repayments on the higher houses but due to falling house prices we didn't get much money 'out' of our house, hence our savings have gone to the deposit, leaving us with not enough for stamp duty.

stop me if iam wrong but due to the falling house prices you would of saved more on the new bigger house than what you lost on the one you sold,
so wheres the stamp duty money gone?

xyellowx

"Thanks for the helpful advice. We can easily afford the mortgage repayments on the higher houses but due to falling house prices we didn't get much money 'out' of our house, hence our savings have gone to the deposit, leaving us with not enough for stamp duty".

stop me if iam wrong but due to the falling house prices you would of saved more on the new bigger house than what you lost on the one you sold,
so wheres the stamp duty money gone?

Chinkle

You won't find a lender willing to add the stamp duty onto the mortgage.

The days are gone when they lent above valuation for whatever else you wanted to consolidate with your mortgage.

In effect what you are saying is you have no savings, the deposit for the new house you want is being funded from the sale ie is equity.

If you're on a middle rung of the property ladder it makes no difference if prices are falling or rising because you are both selling and buying. In fact in a falling market it can even be beneficial as your purchasing power stretches that bit further.

You need to find another way to come up with the stamp duty money.

When_is_the_reset?

xyellowx wrote: »

so wheres the stamp duty money gone?

I bought some stamps with it, at the airport, so they were duty free.