Mortgage and a loan???

LJW_2

Hi hope you can help!

I am to purchase a house for 95k. I am wondering whether to get a mortgage for 80k over 25 years and a loan for 15k for 10 years and would use as a deposit. The theory behind this is that rather than pay 95k over 25 years we could split it and after 10 years when the loan is paid then our Mortgage is less to pay.

What I am trying to do is lower the amount of interest I pay back over the 25 years. Does this make sense? could i do it? and is it actually worth doing?

I would be very grateful for you advice.

LJW

silvercar

probably easier and cheaper to overpay on the mortgage and reduce the capital outstanding in the first few years. Also covers you if you find you don't have the money to overpay.

MarkyMarkD

Most lenders aren't going to be very impressed at lending you 90% or so on the basis that you are borrowing the whole of the other 10%. If they take account of the repayments on the £15k, your affordability on the mortgage will be knackered and you probably won't get the loan.

So I agree with Silvercar - I think it's better to take the 100% loan up-front and then overpay it as much as you can, so you can remortgage to a less expensive mortgage in a few years' time.

LJW_2

Thanks for your advice. It makes sense to do it that way.:T