Getting a loan after mortgage agreement

Lbarn

Hi guys,
I've been a big fan of this site for a long time and it is so useful and now time to make my first post.
We have just made an offer on our first house, survey next week, got AIP and application for official offer sent, also paid arrangement fee etc.
Our 10% deposit was gifted by my parents, we have sent proof of this to seller (bank as a repossession) and my parents are going to do a letter for lender to say purely gifted and they have no interest in repayment nor the property should it get questioned.
Now my question is, would it be ok to apply for a home improvement loan once we have completed (if all goes through ok) as there is a lot of cosmetic work to be done as previous owners left a bit of a mess or could this be frowned upon I.e as we have only just got a mortgage or even worse that it could look like we are borrowing to pay back deposit (I assure you we are not!) but it's just the deposit gifted is 14.5k and we hoped to borrow 15k.

I have a small loan finishing in October with the same lender as our mortgage provider so was hoping to just extend that for ease and also never ever missed or late paid but am I pushing our luck?

Would appreciate your opinion?

Lbarn

Sorry I meant to say in case anyone is wondering why no savings, the deposit came as a huge surprise and we have been ensuring both our credit cards paid off in full, my overdraft is paid off, we have our daughter in full time child care £650 per month and got married in September and saved and are left with no debts as a result of wedding.

betmunch

its fine to apply, after completion. Do not apply before you complete as it will then need to be declared to the lender

Lbarn

Thank you, yes I wouldnt dream of doing anything to potentially damage our chances of getting the final ok... Even though the AIP came back and affordability shows we could borrow 70k+ above what we have asked for I still won't be happy until we complete.
To be fair Ive read so many horror stories on here about mortgage offers being pulled last minute i wish I hadn't read so much!

So you think lender will be ok if I call them a few days after completion? Time will be of the essence as we need to redecorate recarpet etc before we move in as have a small overlap between moving in and leaving our rental property.
Thanks

betmunch

you mean the unsecured loan lender? you can call them the day you pick up the keys if you like, just as long as the mortgage has been drawn down it cant be retracted. the unsecured loan lender will credit score you based on your current circumstances, ie now with a mortgage, and if they offer you anything then your free to accept it if its what you want

Lbarn

The unsecured loan is with the same lender as the mortgage provider.

Is collection of keys the very final point of the purchase? Ie lender will have transferred funds to solicitor and can't retract?

Also I see you are a mortgage broker, sorry for another question but am I ok to instruct solicitor now? Our advisor said yes but what do we actually do and what will they need?

betmunch

you solicitor should not authorise key release before they have the money. Now you know which bank you are using for the mortgage you should instruct your solicitor (solicitors may say it the other way round, which is fair enough) make sure you tell the solicitor which lender you are buying with so they can check they are on the lender panel

leveller2911

Wouldn't it be better to settle into paying the mortgage for a few months and then deciding on whether or not its a good idea to extend even more borrowing?.. Its a falling market, you were gifted £14.5k and then want to borrow £15k ......House prices are not going North for a few years IMO so why the hurry to buy? you could rent ,save and then buy...

I wish you luck but I would hear alarm bells ringing.. I'm not knocking you, just an observation..

foxy-roxy

Hi, just thought I would reply to let you know that me and hubby completed on our house last October and we pretty much got a loan for home improvement straight away, applied with the same provider we got our mortgage through (Abbey)!
So yes it is absolutely fine to do it.
P.S. the majority of our deposit was gifted as well, 10% from my dad and we put in the other 5%.

Hope that helps.

betmunch

leveller2911 wrote: »

Wouldn't it be better to settle into paying the mortgage for a few months and then deciding on whether or not its a good idea to extend even more borrowing?.. Its a falling market, you were gifted £14.5k and then want to borrow £15k ......House prices are not going North for a few years IMO so why the hurry to buy? you could rent ,save and then buy...

I wish you luck but I would hear alarm bells ringing.. I'm not knocking you, just an observation..

Totally agree with this, I am assuming that OP has considered these factors and come to the decison that they do want to take the extra borrowing.

Lbarn

Hi leveller, I really appreciate your honesty and that was our plan to just save! However this house is just to good to not go for!
We rent on the pararel road our neighbours just sold for £172 and we have bought exact house albeit some work for £145 and the estate is well sought after.
Our mortgage payments are not significantly higher than our rent payments and our daughter starts school in sept 2013 so want to start applying for schools.
The house just needs some tlc but location, size of property is just perfect and our landlord won't commit to another 12mth let as they want to move back we don't want this sense of uncertainty.
If we didn't get the loan it wouldn't be the end of the world but would be a slow way of getting it clean and tidy I.e carpets currently filthy, fitted wardrobes and fire place ripped out, no curtains, handles missing from kitchen, walls need painting etc
Foxy Roy we are with abbey too thanks!!!

Maybe some people would disagree with us borrowing to do the house up, but I don't want my daughter going from a gorgeous current house to a tip!

Our mortgage app shows 2370 disposable income so sure it will be fine as I said mortgage is by no means stretching us, and may jut ask for 10k and put a kitchen in at a later date