Hi, Personal loan for un-mortgageable auction property?

Jack_Johnson_the_acorn

Hi,

Myself and my fiancee want to purchase an auction property, It's un-mortgageable, we have £10k-£15k saved but the property is likely to go for between £30k - £40k (1 bed apartment). We have a combined Annual salary of around £45k and we both currently live at home. She has a personal loan with around 2 years and £5000 left to pay.

Are we likely to be successful for a joint loan of £20k-£25k. I don't want to apply and be rejected as it might affect our credit ratings.

My parents have offered to remortgage and borrow us the £20k, But I'd prefer to do this without their help......

ANY ADVICE! :beer:

paddyrg

I think it'll be very tight. £45k would suggest a maximum borrowing of £22500 (50% of earnings as an estimator). Already £5k in credit, so £17500 is probably the max they would normally consider unsecured. If you have overdraft or credit cards (even unused ones) the amount of 'available credit' will also come off that £17500 figure.

If you borrow £20k from the in-laws/parents, make sure you make a formal agreement with them where they maybe own half the property and you pay it back monthly or something? Looking at your numbers, knowing auction guide prices are often low to sucker people into a bidding war, knowing you may have a buyers premium of upto 16% plus VAT on fees, you will need their help.

If the place is unmortgageable, are you sure you want it if it is just an appartment? You will probably not be getting the freehold if it is an appartment, so have you confirmed the lease is extendable and how much the service ccharges will be?

mc33033

Jack_Johnson_the_acorn wrote: »

Are we likely to be successful for a joint loan of £20k-£25k. I don't want to apply and be rejected as it might affect our credit ratings.

I think you will probably find that when you give the reason for the loan that may cause issues - for some reason banks would prefer you to spend your personal loans on overseas holidays not on land or property etc... as it doesn't fit under their pre-defined categories some at least will decline to lend (Halifax in particular).

Jack_Johnson_the_acorn wrote: »

My parents have offered to remortgage and borrow us the £20k, But I'd prefer to do this without their help......

ANY ADVICE! :beer:

I know what you are saying about your parents but bear in mind that they will no doubt be able to borrow for less than you can so this does make sense, should mean you can repay them quicker as well :-)

poppasmurf_bewdley

Nobody's going to give you a loan for a property that mortgage providers won't touch.

Why is the property un-mortgageable? What happens if you have to spend lots of money on it in the very near future for something you knew nothing about?

It won't be un-mortgageable for no reason.

izools

Try Zopa.co.uk

They offer a listings feature which allows you to explain why you're borrowing and why you're a good bet; and other folks will chip in.

I managed to secure a very good APR personal loan with no trouble from Zopa but they are very strict and tight with their credit scoring and underwriting.

Good luck!

EDIT: In regards to "No one will lend you a loan if the mortgage is un-mortgageable" I believe this to be utter tosh - when credit scoring unsecured personal loans the lender doesn't give two hoots about security or what the money will be used for - just if it will be repaid - which they will base on your credit history, stability, and income.

Whilst you mightn't get secured lending against the property, unsecured lending, by it's nature, doesn't require security - you could spend it on gummy bears for all they care as long as you've proven to the underwriters that you have a good credit history and good income making you a low risk!

talana

izools wrote: »

Try Zopa.co.uk
They offer a listings feature which allows you to explain why you're borrowing and why you're a good bet; and other folks will chip in.

Not any more they don't, no more listings.

Jack_Johnson_the_acorn

izools wrote: »

Try Zopa.co.uk

They offer a listings feature which allows you to explain why you're borrowing and why you're a good bet; and other folks will chip in.

I managed to secure a very good APR personal loan with no trouble from Zopa but they are very strict and tight with their credit scoring and underwriting.

Good luck!

EDIT: In regards to "No one will lend you a loan if the mortgage is un-mortgageable" I believe this to be utter tosh - when credit scoring unsecured personal loans the lender doesn't give two hoots about security or what the money will be used for - just if it will be repaid - which they will base on your credit history, stability, and income.

Whilst you mightn't get secured lending against the property, unsecured lending, by it's nature, doesn't require security - you could spend it on gummy bears for all they care as long as you've proven to the underwriters that you have a good credit history and good income making you a low risk!

I was accepted for a £20k loan on my own today although the rate was a bit steep @14.9% APR this was with Santander. Means over 5 years I would repay £27k was expecting more like £25k. But due to my age I am considered high risk (25)

izools

Get a quote from Zopa, see what rate they offer.

Didn't know the listings have gone - although I got my loan from the markets, not the listings anyway

12.9% APR offer from the markets, at age 24

CH27

Why is the property unmortgagable?

jonesMUFCforever

In general banks will not lend for property transactions on an unsecured basis so I would consider taking the money from parents and paying them back.
Again though we need to know why the property is unmortgageable.
Is it a case of being too good to be true?

KingElvis

It may be haunted?

I know the Ghostbusters if it is................