Loan, Savings & Mortgage Confusion

viperpurple

Hello,

I have listed my situation below and hopefully this will make it easier to understand and keep it simple.

Buying a Van for £8000 (Can get loan at 4.5%)
Moving House in 18-24 Months (Will need mortgage)
Currently own my home with a mortgage (Fix Deal ends in 3 months)
Have savings of around £15000

Questions:

- Do I get a loan to buy the van (around 4.5%) or use savings?

- When I buy a new house and get a mortgage will they favour me better if I have no loan but less savings and so less deposit?

- Can I get a loan when it's time to buy a house to top up the money I have just bought the van with or will this look bad?

I have lots of options and my current preferred I think is below but I am open to any suggestions.

My preferred option so far I think

-Get a loan for the van and keep the savings for a deposit

I hope this makes sense, feel free to ask questions

Kind Regards

Thrugelmir

Van for work?

Interest is tax deductible if it is. So may be beneficial rather than pay for it in cash.

viperpurple

Sorry I should have said this is a personal van to convert to a camper. Thanks for the speedy reply Thrugelmir, appreciated.

Thrugelmir wrote: »

Van for work?

Interest is tax deductible if it is. So may be beneficial rather than pay for it in cash.

ViolaLass

Your option two appears to be getting a loan in order to top up your savings i.e. paying to have more money in the bank. I don't see how that helps.

viperpurple

ViolaLass,

The idea would be to then use the loan plus savings money as a deposit and renovation fund for the new house.

I am aware that some of my options aren't the best but I would like to hear other people's opinions to check I've not missed something obvious.

Regards

ViolaLass wrote: »

Your option two appears to be getting a loan in order to top up your savings i.e. paying to have more money in the bank. I don't see how that helps.

pcgtron

The only obvious thing you've missed is don't buy a van and a house. You can't afford both

kingstreet

With no loan to value suggestions, income figures, loan monthly payments it's practically impossible to say.

The loan payments will reduce what you can afford to borrow, however a bigger deposit will mean lower rates and improved chance of acceptance if your case has any flaws.

Contact a whole market broker and have them run the scenarios for you so you can see the rate/payment/affordability differences.