Where to get very small "mortgage"

Mr_Thrifty

Hi all, I'm in the process of buying a new house but may need to get a very small "mortgage". By which I mean something like £30K on a house valued around £300K or so.

I don't really want all the hassle and set-up fees associated with a mortgage in the conventional sense, so any ideas what I should do? I'm thinking that a mortgage is still probably the right option, but it seems very wasteful having to pay £1000 set up fee and so on just for such a small amount.

Any ideas?

Many thanks,

Mr Thrifty.

Morgage_Confused

where does the £1000 set up fee come from. find a fee free mortgage on such a small amount.

ACG

Not all lenders charge a £1k upfront fee - a lot charge less than that.

Woolwich charge around £500. The Coventry charge around £200.
Note that im not recommending either of these, theyre just examples. You might want to see a mortgage advisor?

Mr_Thrifty

Hmm... this is really helpful advice, thank you. I just assumed that, post credit crunch, huge set up fees had become the norm.

Any idea roughly how long it takes to set up a small mortgage like that? Should I start working on it now, bearing in mind I don't yet know where I'll be moving to or exactly how much I'll need to borrow?

Thank you again very much.

GMS

You will need to find a property in order to get a mortgage application done. You could apply for a decision in pronciple prior to finding a place.

If you are unsure on amounts needed you could apply for a higher amount but get a product which allows overpayments. Once you complete the purchase you could repay what is left. Also look at a no product fee deal.

gwernybwch

Both HSBC and First Direct had Lifetime Tracker mortgages that didn't have an application fee and allowed overpayments. Otherwise there are plenty of mortgage providers that have an application fee that is less than £500.
Although be mindful that the mortgage providers that have low application fees, often have higher than average valuation fees or higher interest rates.
Many mortgage providers do set a minimum mortgage of around £30k, you will either have to look at the 'small print' of each mortgage provider or use a good mortgage broker.

Rafter

Another option if you do come up against any small loan limits is to take out an offset mortgage, borrow more than you need but immediately put the surplus into the offset savings account to avoid paying more interest than you have to.

This also gives you some flexibility if you need to do any home improvements or are able to pay the mortgage faster than anticipated because you can 'offset' rather than repay capital which may be subject to repayment restrictions.

Others have already suggested the better low fee or fee free providers. Ease and speed of setting up mortgage will depend on how 'normal' you and the property are in terms of your income and the property in terms of construction, condition and resale value.

Good luck

R.

downsizer3

I have £30k mortgage on a £320k property with Coventry BS.
I took that one as it had the lowest fee at the time, and took the SVR so that I can overpay. 2.99% at the time but looks like higher rate now.
There is a fee to close of £125 - also pretty low with a view to an early pay off in my case, without a silly redemption fee.
Worth giving them a call but the bottom line is to do an online comparison but get the lowest entry AND exit fees - as well as good rates obviously.