Loan application success if I am Homeowner vs renting

aetbaar

Hi

I want to take out a loan for £15K for home improvements when i get my house in 3 months which we have just bought

I have a good credit history

should i take it out just before i buy my new house and complete as someone who is renting and not a homeowner or should I take it out after i complet as a homeowner

will the loan company take my mortgage as a negative point and prefer i am renting with no debt or would i be more likely to get accepted if i am a homeowner with a mortgage

also anybody got any experience with sainsburys and tesco loans - ie likelihood to get approved and also if i will get the rate advertised if i have a good credit score

thanks in advance any other tips appreciated

ch3101

Apply as a homeowner.

There's more security if you're a homeowner because if the worst comes to the worst the bank can line up after your mortgage company for when your home is sold again.

What is the rest of your credit situation like? Any other credit? Cards? Balances and limits?

opinions4u

Could you buy with a smaller mortgage deposit?

dealer_wins

Jeancarson wrote: »

I do know a few loan lender that can help you out with ur loan

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aetbaar

Thanks for the responses - I was thinking that if they asssume i have a mortgage and want a loan they are less likely to lend than if i dont have a mortgage as i will have less borrowing - also i will have no history on my new address so better to get it now while i am at my current address?

SeanG79

You will "score" higher with lenders if you are a home owner compared to being a tenant as you will have collateral, even though the loan will not be secured against the property. If you fail to pay and they get a CCJ, they will realise their money when the property is sold.

Within a few months of moving, provided you are traceable for 3 years prior on the electoral roll, the lender will normally request you supply proof of current address. You can email your local council to get yourself listed on the electoral roll once you move (I have done this previously). Recent change in address may negatively impact on the banks "scoring" as would a recent change in jobs.

aetbaar

Thank Sean- if I apply the day of completion I can say I am a homeowner but still use my current address as I am renting - would that work as i would be registered at current address for 3 years renting but am still a homeowner as i have just completed on my new property although not officially registered on that address for another 2 weeks after I have fully moved

SeanG79

As much as the questions ask if you are a home owner or a tenant, this field is not essentially taken into account. With most if not all lenders, they check for mortgage data from the CRA's and land registry data. as long as your mortgage shows on your searches and/or your name appears on land registry you will be considered a home owner.

I doubt that it will reflect immediately on either front. Also I wouldnt suggest misleading a lender on an application.

I would think your best bet would be to approach your own bank for the loan. They will have the best idea of your financial position.

aetbaar

this does get complicated - I dont want to use my own bank as they offer very poor loans and rates and to be honest will think of switching from them anyway

I guess it takes 2-3 months for mortgage data to show up and land registry details to register and so my best bet is just to apply now before i complete and say i am not a homeowner as i dont want to wait 3 months after completion and for the loan to come for me to do the work on the house i need to do


if they dont really look at the homeowner check box but rely on CRA and land registry then that is more important and so i should just apply as a tenant before I move - thanks for all your help

I also have buy to let properties so in effect i am a homeowner although not loving at the homes i have purchased

SeanG79

I also have buy to let properties so in effect i am a home owner although not loving at the homes i have purchased

You can apply as a tenant at your current address, the buy 2 let properties will show up on your CAIS info and will assist in your application.

Good Luck!

StuC75

15k loan may affect what mortgage you could get, bear in mind that the bank could review your file & re-credit score on or before transfer of funds..

Taking the funds as a secure loan is likely to be tricky as it will eat into the equity that you have - so your mortgage company would want to keep with Loan To Value bandings..

so best to get the house bought first rather than it jeopardise the mortgage..

I have a tesco loan and got the best rate offered at the time when took £10k (all credit cards paid in full and no other credit commitments besides mortgage)..