Home renovation loan straight after completion to pay off stamp duty

NS-201

Hi, I am a single applicant first time buyer currently looking for aproperty within the 3% stamp duty region.

My question is - I currently have savings that would cover 10% deposit and moving fees only. So knowing that the stamp duty can be paid within 30 days, I will be looking to apply for a personal loan straight after completion. Is that possible? Is it possible to get a home renovation loan straight after completion which I can use to pay off the stamp duty as well as do some home renovation work?

If it is not possible, I'll have to put 5% deposit so I can pay the stamp duty as well. This will increase the interest rate and will reduce the property value limiting my options which I don’t like.

I am quite tempted to go with the first option putting all my money in the deposit if it is possible. Hope someone on this forum can help answer my question.

Cheers!

loubel

As you are buying with a mortgage you won't be able to do this. Your solicitor will need the full completion funds, including your SDLT before completion.

NS-201

So can't I keep the stamp duty outside the lawyer's scope and deal with it myself?

loubel

No, not unless you are a cash buyer. It is a standard instruction from lender to solicitor that the solicitor must be holding the SDLT payment on completion.

NS-201

Well.. That's a shame..

Thanks for your quick and clear response..

NS-201

Counter question, if I take a loan to cover the stamp duty before the mortgage application which is to be paid over a long term and therefore a small repayments. Will this reduce amount I can borrow?

Or is there any lender that will be willing to lend the stamp duty before completion without leaving records on credit history?

loubel

Any borrowing will be taken into account when you apply for a mortgage and certainly could affect your application.

All loans leave a trail on your credit history and you will be asked to declare them on your application. Lenders also often do fresh credit checks prior to completion so it's not a good idea to take out a loan until after completion.

If you've only got 5% deposit when all costs are taken into account then you may need to look at some slightly cheaper properties that are a bit more affordable.

Wh05apk

NS-201 wrote: »

Counter question, if I take a loan to cover the stamp duty before the mortgage application which is to be paid over a long term and therefore a small repayments. Will this reduce amount I can borrow?



Yes

Or is there any lender that will be willing to lend the stamp duty before completion without leaving records on credit history?

Only friends/family - which you should still declare to the lender.