First Time Buyer

sp6281

Hi
Apologies if this has already been posted / answered but after a quick search I couldnt find the exact answer I need.

My wife and I are due to buy our first house soon. My question is...
If we find a house for £140,000 but an offer is accepted for £130,000, can we get a mortgage on the full £140,000 (minus the 15% deposit of course) and use the extra £10,000 to make repairs / personalise the house?

The numbers are made up but I hope the point of the question is clear!
To be clear, I am not looking at a 100% mortgage and already have a mortgage approved in principle. The question is all about borrowing more than the agreed sale price but in line with the original asking price!

kingstreet

No you can't. The mortgage is based on the valuation or purchase price whichever is the lower.

sp6281

OK thank you.
Do we have any options such as bolt ons or anything like that or would we have to look at a standard bank loan? We would be looking in the region of £5000. I will obviously talk to our mortgage advidor but would like to have an idea before we go in.

Thank you ini advance

Meeper

There are no lenders at the moment who will bolt on a separate home improvement loan to the mortgage. Your option here is to get a personal loan, but if you intend to do this, you really should inform the mortgage company as it will affect your affordability and your ability to meet the payments.

Thrugelmir

sp6281 wrote: »

OK thank you.
Do we have any options such as bolt ons or anything like that or would we have to look at a standard bank loan? We would be looking in the region of £5000. I will obviously talk to our mortgage advidor but would like to have an idea before we go in.

Thank you ini advance

Suggest you continue to save for a few more months. Little point rushing into what will be the biggest financial commitment in your lives.

somethingcorporate

The additional lending will increase your LTV, so whilst you say you won't be looking for a 100% mortgage, that is in essence what you are doing.

sp6281

In terms of the amount borrowed then yes but we wont get all the 'penalities' of a 100% mortgage such as the interest and restrictions that are placed on it etc

Not sure that I can save £5000 in 'a little while longer'!

Thank you for all of your help though. I'll have to have a think about the best way to play it.

shaneshaneshane

sp6281 wrote: »

Hi
Apologies if this has already been posted / answered but after a quick search I couldnt find the exact answer I need.

My wife and I are due to buy our first house soon. My question is...
If we find a house for £140,000 but an offer is accepted for £130,000, can we get a mortgage on the full £140,000 (minus the 15% deposit of course) and use the extra £10,000 to make repairs / personalise the house?

The numbers are made up but I hope the point of the question is clear!
To be clear, I am not looking at a 100% mortgage and already have a mortgage approved in principle. The question is all about borrowing more than the agreed sale price but in line with the original asking price!

Ask about "Vendor Gifted"

If you don't know about it let me sum it up for you...

Say you want a house thats advertised at 100k, therefore 10% deposit = 10k

Try to agree a price lower than 100k, say 95k ... ask for a vendor gifted where the people who currently own the property and agree to a "sale" price of 100k (therefore you need a 90k mortgage with a 10% deposit).

Think of it as cashback, once you agree a price, tell them you will buy it at asking price if they give you the difference between full price and agreed price back, in this case above... 5k.

Then you have a 90k mortgage, 10k in savings.

5k of saving will go to deposit and 5k vendor gift will go to deposit. leaving you with 5k extra to get started with.

This does have it's drawbacks but it's an option for you to think about if you want/need the extra start up cash, if you can understand my ramblings above.

kingstreet

shaneshaneshane wrote: »

Ask about "Vendor Gifted"
This does have it's drawbacks

It does have one massive drawback. The last lender, Halifax, pulled out of VGD market on 25 July. The only vendor gifted business accepted is now exclusively newbuild stuff.

shaneshaneshane

kingstreet wrote: »

It does have one massive drawback. The last lender, Halifax, pulled out of VGD market on 25 July. The only vendor gifted business accepted is now exclusively newbuild stuff.

Really? Missed that one!

Not really an option then lol