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Home improvement Loan before completion
homeowner796
Posts: 1 Newbie
Hello,
So far have placed an offer, had it accepted, got the mortgage in principle, had the surveys done & had the mortgage lender has offered to lend the money. We have a 5% deposit and are looking to complete as soon as possible. The property we are purchasing needs some work doing to it so we are going to take out a home improvement loan. I have been to the bank to discuss figures and they have agreed to lend us £10,000 - but the catch it we have to take it out before our mortgage completes! This is not ideal and we have been put off the idea by people as they say even though the bank have completed all credit checks, they may still check us one more time and it will look as though we are borrowing our deposit even though we are not. We have sent proof of deposit via bank statements to our solicitor weeks ago.
Any tips? Is it risky to take it out before? Could this prevent the mortgage going through etc?
Thanks again...
So far have placed an offer, had it accepted, got the mortgage in principle, had the surveys done & had the mortgage lender has offered to lend the money. We have a 5% deposit and are looking to complete as soon as possible. The property we are purchasing needs some work doing to it so we are going to take out a home improvement loan. I have been to the bank to discuss figures and they have agreed to lend us £10,000 - but the catch it we have to take it out before our mortgage completes! This is not ideal and we have been put off the idea by people as they say even though the bank have completed all credit checks, they may still check us one more time and it will look as though we are borrowing our deposit even though we are not. We have sent proof of deposit via bank statements to our solicitor weeks ago.
Any tips? Is it risky to take it out before? Could this prevent the mortgage going through etc?
Thanks again...
0
Comments
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Tip is do not do this as it will materially affect your mortgage offer.
You have been agreed to borrow x based upon your salary/commitments and then after offer you want to take an additional commitment.
If you do proceed, you need to advise your lender so that they can check they are still happy to advance the full funds. With a 5% deposit, they may take a more conservative view than you might likeI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Has the mortgage lender factored the loan payments into affordability? If not, you should disclose them as a material change in your circumstances.
Has the loan provider already credit checked you for the loan? If so, the search may be picked up by the mortgage lender prior to completion if it uses a live system which re-scores at each stage.
Standard advice is to make no new applications for credit between agreement in principle and completion.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
1) Don't do it
2) Yes
3) YesHi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
08.18, 19 & 20 - the 'early shift's' vote is in !Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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Doing this will furnish you with a £10K debt and nothing to spend it on.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
homeowner796 wrote: »but the catch it we have to take it out before our mortgage completes!
Why? I'm interested to know.0
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