Loan help

Newbie1984

Hi

Am hoping someone can offer some advice.

Both my partner and I are in the process of selling our properties and purchasing a new one together. I will walk away with a bit of profit which has gone Into the purchase of the new house however he will walk away with about 8k of debt as his house is in negative equity.

We cannot borrow more on the mortgage as have maxed out on a 70% Ltv mortgage so our only option is to take an unsecured loan of £8k. Now as it is his debt he has been trying to get a loan in his name however this has proven unsuccessful. We ran an experian report and everything is good there however it shows his total credit available as about £1500. Is this therefore the max he can borrow on his own?

We have then done a few joint applications and the best apr we can get is 13.8%. Any ideas on how we could borrow the money other than joint application loan and secondly as mentioned the credit available on experian is that the max he can borrow on his own?

Thanks

John1993_2

Have you already completed on the new house? If you've not, then you may well find that the offer is withdrawn if you take on additional borrowing.

Newbie1984

John1993 wrote: »

Have you already completed on the new house? If you've not, then you may well find that the offer is withdrawn if you take on additional borrowing.

No we haven't completed although the mortgage has been fully approved and accepted so I don't think any additional borrowing would affect it?

Any advise on the available credit explanation would be great

John1993_2

Newbie1984 wrote: »

No we haven't completed although the mortgage has been fully approved and accepted so I don't think any additional borrowing would affect it?

Any advise on the available credit explanation would be great

They will likely carry out another check before advancing you the funds, and iif you've taken on additional borrowing, are likely to decline it.

You'll have agreed to inform them of any material changes in your cisrcumstances, and so will be in breach of your terms and conditions simply by keeping quiet of you take this borrowing on.

Basically the bank has made a decision to lend to you based on you having a certain percentage deposit saved up. If yo uare relying on borowinng, then this does not count toweards your deposit for their calculations, and increases the loan to valuation figure.

Please take some professional advice at this ppoint, there can be very serious repercussions if you go down your proposed route.

Newbie1984

Thanks, not an issue the mortgage is solely in my name so ill just stay out of the loan agreement in that case.

Cheers for the heads up.

John1993_2

Newbie1984 wrote: »

Thanks, not an issue the mortgage is solely in my name so ill just stay out of the loan agreement in that case.

Cheers for the heads up.

You'll need to provide proof of the source of the deposit. If it's gifted from your other half they'll need to provide this.

Mortgage lenders, and their solicitors, will tend to be quite n the ball when it comes to people trying to game the system. I don't know if you realise this, but from what you've written, you seem to be about to engage in mortgage fraud.

I hope that I've misunderstoood, but your posts so far suggest that you are going to misrepresent a loan as a saved up deposit. You'll very likely be found out if this is the case.

Have I misundrstood, or is that a fair description of the situation?

Newbie1984

No sorry you have missunderstood.

The purchase of my new property is solely in my name so his finances have no affect on my new house purchase. My 30% deposit is made up from the remaining equity in my current property minus existing mortgage and some extra money currently in my savings. Him taking out a new loan will have no connection to my new mortgage or purchase. My mortgage is being ported so remain with the same provider on the same terms.

The property my partner is selling is being sold at a loss as mentioned a total of just under £8k inc solicitors fees. So he needs to find a source to obtain the shortfall.

By way of an update he has just been accepted for a loan to cover his existing loan and new amount required, much lower apr and a shorter loan term so saving in the long run. All in his name so no joint application required.

John1993_2

Newbie1984 wrote: »

Both my partner and I are in the process of selling our properties and purchasing a new one together.

I was thrown by this bit, which made me think that you were buying a new house together.

Newbie1984

Ah sorry I apologise. No everything is staying in my name (until we get married at least lol) but he pays half of everything so i think of it as together. Guess its my sensible side protecting myself and my son if anything wasn't to work out! Thanks for your advise though as I'm sure your right that any joint loan application I was to agree to with him would show as a financial relationship on my credit report and therefore could affect my borrowing before we complete. Not worth the risk so close to completion.

ch3101

Can he not keep his house and let it out? The it s there if you throw him out of your house? It seems the oly sensible option

Apples2

Newbie1984 wrote: »

By way of an update he has just been accepted for a loan to cover his existing loan and new amount required, much lower apr and a shorter loan term so saving in the long run. All in his name so no joint application required.

Refreshing to see someone so level headed and protecting their future.

Out of interest, who is the loan with?
Seems strange after several rejections and a high Apr when applied jointly that a lender comes up trumps like this.