Borrowing extra..

kingstreet

From Gateshead Council's website, which is as good as any;-

Can I borrow extra money when I buy the property?

If you wish to borrow extra money on top of your mortgage, your lender must apply in writing to Gateshead Council Legal and Corporate Services for a Deed of Postponement for which a fee will be payable.

Please Note: Any extra money borrowed must be for Home Improvements only.

Your council probably has an equivalent webpage.

Zoetoes

kingstreet wrote: »

Yes and you would still require council permission to borrow more during the pre-emption period, five years from completion.

I get it now, the discount is only really mine after 5 years of not selling.

So at what point would this have come up? When it was with the solicitor? Should the broker not know these things?

So in that case I couldn't borrow the extra in 6 months either could I?

If I approach the council for a deed of postponement how long is that likely to take?

Zoetoes

kingstreet wrote: »

From Gateshead Council's website, which is as good as any;-



Your council probably has an equivalent webpage.

Ah right, so Halifax will write to the council. I can't risk getting work done and then hoping for the funds to pay then.

Thank you for all the replies, I have a better idea of what I'm getting into now!

kingstreet

Any decent broker/solicitor would know about the need for a Deed of Postponement and/or council permission and control where extra money is being borrowed for home improvements.

An inexperienced broker may simply have thought if it was alright with the lender (which it is in many cases) it needed no further investigation.

With a bit of experience, as SPM and I have, you know to warn your clients in advance.

She may be able to give you a better idea of how long it takes to arrange such a thing as she does more RTB business than I.

Zoetoes

Thanks, I'm so glad I asked!

Another thing niggling me - I have apparently passed the credit check and been approved and that side of it is definitely going through....but when I've checked my credit file there is no search showing, am I missing something?

I can see the search for switching bank accounts with them which I did myself but no mortgage search?

Senior_Paper_Monitor

Can you be more specific about what stage of the application you are at ? "Middle of the mortgage process" is a little vague.

If Halifax opt to be picky (I can't recall doing an extra borrowing with them recently - we don't use them much at all) then a budget for picking stuff up at B&Q and getting a mate to fit them may fall short of their requirements.

Zoetoes

Senior_Paper_Monitor wrote: »

Can you be more specific about what stage of the application you are at ? "Middle of the mortgage process" is a little vague.

If Halifax opt to be picky (I can't recall do an extra borrowing with them recently - we don't use them much) then a budget for picking stuff up at B&Q and getting a mate to fit them may fall short of their requirements.

The info I have says the products have been secured and for it to proceed to offer please provide the following.....

All the documents have been provided with the exception of the invoice.

I'm a bit vague because I'm not sure myself!

So at what stage does that make it? The broker informed me that I had passed the credit checks.

kingstreet

Halifax RTB criteria;-

Right to buy

Loans may be accepted up to 100% of the discounted purchase price, provided that they do not exceed Halifax lending limits based on valuation.

Home improvements allowed - for funds to be released we require sight of invoices, alternatively a retention will be made at completion; funds will then be released on production of invoices.

Which basically means you aren't getting the money until the work is done.

Zoetoes

kingstreet wrote: »

Halifax RTB criteria;-


Which basically means you aren't getting the money until the work is done.

Well that's that then!

Dave_Ham

Was just reading thinking no way Halifax was going to advance on this basis and you have got to that point now.#

To be fair to Halifax and lenders in general, they are not going to advance funds on the basis that you have an estimate/invoice and may get the works carried out.

Furthermore, further lending on equity with assumed no deposit put in by yourself; begs the question about interest in the property and motivation to repay. This is why the lenders are incredibly nervous on any additional borrowing.

By the sounds of it, all you currently have is an Agreement In Principle and therefore until you have the mortgage offer, nothing is formally agreed.

Poor show from your broker so far, would be letting them know tomorrow.