Loan to pay stamp duty

lauzt1987

Hi there. I am looking for a bit of advice regarding a loan to pay stamp duty. We have had an offer accepted on a house and a few weeks down the line have realised that we need to pay stamp duty. We were told originally by our mortgage broker that we would be exempt but because of a legal technicality are now going to have to pay. We haven't budgeted for this and are putting all £30,000 of savings in to the house deposit. We really don't want to pull out of the house so are considering taking a loan to finance the stamp duty. My partner has no debt whatsoever, I have a small 3 figure overdraft. We both have a steady income however my partner runs his own business and so only takes a small sallary but is paid dividends. I was just wondering if it was likely that we would be accepted for a loan and where is the best place to look.

Many thanks in advance for your comments.

Tixy

Difficult to even guess without knowing about your finances - eg how much will the loan be for?, how much do you earn? what other debts and available credit do you have etc. Will it be a joint loan or just in your name?
Best place to try if often your own bank.

But you also need to be careful with this if you have had a mortgage offer. If you get a loan between the mortgage offer and completion you will change your credit status and affordability etc. When the mortgage co do the final credit check prior to completion people have been turned down for their mortgage due to the new borrowing. So whatever you do discuss it with them first

geoffky

get the sellers to drop the price..or the deal is off..

blacksta

geoffky wrote: »

get the sellers to drop the price..or the deal is off..

Good idea but then it depends on the cost of the house - i suspect the poster might be paying a 10% deposit of 300k - which means the vendor will have to drop their price by at least 9000 pounds to accommodate the buyers stamp duty

Tixy

blacksta wrote: »

Good idea but then it depends on the cost of the house - i suspect the poster might be paying a 10% deposit of 300k - which means the vendor will have to drop their price by at least 9000 pounds to accommodate the buyers stamp duty

If they originally thought they might be exempt my guess is that the purchase price is probably less than £250k but more than £125k, as thats the bracket where first time buyers are exempt but others aren't.

It might also mean than the reduction in price needed for geoff's suggestion is only a couple of thousand or so.

lauzt1987

Thanks for your comments everyone. Just to clarify, the house is £150,000, we have a 20% deposit of 30,000. We could get the stamp duty added on to our mortgage but this would mean our deposit would be less than 20% and we would therefore lose out on preferencial mortgage rates and pay about £70 more a month on our mortgage which is a lot to us. I am on a training contract at the moment and will hopefully get a pay rise next year if i pass my exams so we should be in a better position then and a small loan would not have as much of an impact.

We feel silly for not investigating this further but trusted our mortgage broker. I am a 1st time buyer and my partner owns a share is his parents house. He helped them out as they could not afford to buy on their own. As he doesn't actually live in the property we thought he would be considered a 1st time buyer but because his name is on the title deeds he is not exempt.

I don't think a price reduction is an option as we initially offered 146 and then 149 and they were adament after a lot of negotiation that they would not sell for a penny less than 150, as the home report value is 160.

blacksta

Ok - so you basically need a minimum loan of £1500 - I am not sure you will be able to get such low amount as a loan - unless you were looking for a loan of at least 5000k - I might be wrong - what about contacting your bank to get an overdraft - rather than tire you self to another loan you never planned for in first place . With the overdraft - you can offset against your income to reduce interest until it is paid off

JasX

Any parents and/or other family members who'd consider looking at your numbers* and offering a loan.

-keeps it off the books as far as your mortgage offer goes.
-you can decide an appropriate interest level between you and keep it in the family rather than shovelling additional cash towards the banking industry?


*obviously the pinned thread about lending money to friends/family has lots of cautions and often well founded warnings about 'bail out loans' that heavily indebted relatives might ask for to 'tide them over' but are essentiallly throwing good money after bad. However being generally solvent with negligable existing debt and a specific gap you need it to bridge could well work

[Deleted User]

lauzt1987 wrote: »

Thanks for your comments everyone. Just to clarify, the house is £150,000, we have a 20% deposit of 30,000. We could get the stamp duty added on to our mortgage but this would mean our deposit would be less than 20% and we would therefore lose out on preferencial mortgage rates and pay about £70 more a month on our mortgage which is a lot to us. I am on a training contract at the moment and will hopefully get a pay rise next year if i pass my exams so we should be in a better position then and a small loan would not have as much of an impact.

We feel silly for not investigating this further but trusted our mortgage broker. I am a 1st time buyer and my partner owns a share is his parents house. He helped them out as they could not afford to buy on their own. As he doesn't actually live in the property we thought he would be considered a 1st time buyer but because his name is on the title deeds he is not exempt.

I don't think a price reduction is an option as we initially offered 146 and then 149 and they were adament after a lot of negotiation that they would not sell for a penny less than 150, as the home report value is 160.

a home is only worth what someones prepared to pay for it,we sold ours recently and took a 25% hit,however we got 35% off the asking price of our new home,people are desperate to sell !
just a thought hsbc are now doing 90% mortgages??

geoffky

They either pay it or the deal is off...let them choose.

dmg24

geoffky wrote: »

They either pay it or the deal is off...let them choose.

So if the seller pulls out (not everyone is desperate to sell), the OP has lost out on their legal fees to date, which might not be not far off the £1500 they need. Stupid much?