Just bought a house - need advice urgently

Gareth83

Just put an offer in on a house and we have been accepted.

The offer is £101,000 which we have no problem in getting the mortgage for.

But my question is how do we go about getting a mortgage of £110,000?

Do we get a mortgage of £101,000 and then re-mortgage the next day or what do we do?

There is a current survey on the house saying it is valued at £120,000.

We have a meeting with our IFA tomorrow but would like to know what I am talking about.

Cheers

homer_j_3

You can get mortgages for more than the house is worth.

A lender will normally go off the lower of purchase price or valuation that they have instructed (not older ones paid for by someone else) so this is probable the way forward.

The way they work are 95% normal mortgage, 5% deposit and upto a further 25% on an unsecured loan (which is treated all as one whilst the mortgage is kept there)

Gareth83

so if the purchase price is £101,000 I could get up to £126,250?

assuming they add on 25% is that the case or have I read this wrong?

homer_j_3

if that is 125% of 101k then yes you have it right.

JoeK_3

homer_j wrote: »

if that is 125% of 101k then yes you have it right.

This is of course that you earn enough!

JoeK

homer_j_3

that goes without saying.... i was just clarifying the way the product worked.

Gareth83

yeah we've been given the go ahead for up to £130k but would obviously only wish to take out as much as we need to cover what we have planned.

£110k should be ample

Gareth83

what would be the best place for a 100% mortgage on £110k?

Do you think we should ask for more to begin with?

We would like a fixed rate interest only mortgage, whichever one works out the cheapest per month over 2 years.

Also is £350 about right for solicitors fees?

homer_j_3

I cant tell you where the best place is for you because I do not know your circumstances.

If you are purchasing at 101k then you need a lender that will lend in excess of 100%

The other point you will need to consider is that anything above 95% has to be on repayment if you use the type of mortgage we discussed originally.

silvercar

If you are confident that the market value is way higher than the price you are paying, you could get a bridging loan to cover the purchase and then immediately remortgage. The remortgage will be based on market value and so your loan will be less than 95% enabling you to maybe get a better deal.