What will they lend me money for?

dnet

Hi,

I currently earn around £1500 per month (after tax), i am paying £465 per month for a mortgage and want to borrow £17000 so i can buy the building i have been working from

I have been paying £50 per week rent and putting £60 per week into savings. So i know i can afford £110 per week in loan repayments

I'm unsure how to approach lenders.

The building is sound but i do not want a mortgage on it. Would a lender give a loan for a building or will they need to know 'all about it' like they do with a house?

I could avoid that if the loan was for a bathroom, or a car or such like?

My house is worth £105,000 and i currently owe £80,000 in mortgage

Would it be easier to get three small loans rather than one big one?

thanks for any help

Lbarn

If you applied for three different loans it would badly affect your credit file, as numerous searches will show (the more searches normally indicates you are repeatedly trying as turned down elsewhere)

[Deleted User]

with an income of £18,000 NO one will lend you £17,000
your only possible hope is a business loan from your own bank using the property as security and even then i doubt they`d lend you all the 17k

dnet

woodbine wrote: »

with an income of £18,000 NO one will lend you £17,000

You don't pay a loan off in one year, over three years it's £6k a year with interest. Why could i not afford that?

What about borrowing against my house? It's worth more than £17,000..

dnet

Sorry don't mean to sound rude. I'm shocked at the restrictions on loans

I guess facts is facts

thanks

Eonel

In my experience, the bank generally doesnt care what you want the money for with an unsecured loan. You will be asked what the money is for & as long as you do not say anything silly, it will never be followed up.

You are assessed purely on your creditworthiness for an unsecured loan. And as others mentioned, a 17k loan on 18k salary is very high and quite unlikely by a mainstream lender.

Mortgage might be an easier option.

jon1965

A secure loan is very risky, if things go wrong you could lose your home. Just be aware. Also with only 25K equity it is I think unlikely you would get a further advance

dnet

Thinking about it from the other direction. What would be the maximum i could borrow on £18,000?

~ i don't suppose there is a calculator somewhere?

Thanks

Eonel

There is no simple answer to how much you can borrow & hence no calculator. Each lender has their own criteria.

Some lenders will be prepared to lend you more than others, but at a higher interest rate.

The number generally used around this forum is that unsecured debt becomes difficult beyond 50% of salary - £9,000 in your case.

This is in total - if you already have other credit cards or loans, you are already eating into the 50%.

Best place to start is with your bank where your salary is paid. They can see you have been managing your finances well and will charge mainstream interest rates.

Emmzi

Sounds like you are self employed. Is the amount you pay yourself all of the profit or just what you pay yourself?

I think a visit to the business banking manager. But expect the loan to be secrued. Bit wary about what kind of building you can buy for 17k though, that wouuldn't even buy the land it is on. Something you haven't told us?

DCFC79

dnet wrote: »

You don't pay a loan off in one year, over three years it's £6k a year with interest. Why could i not afford that?

What about borrowing against my house? It's worth more than £17,000..

Its all about you the lender being to pay the loan off each month, they wont want you borrowing more than you can afford and then defaulting on the loan.