Advice re mortgage and SDLT

Rench

Hello all,

I posted this over at Loans (you will see why below), but the guys over there thought you friendly Mortgages people might have some helpful tips.

My girlfriend and I are first time buyers and should hopefully be moving in in around 3 weeks time.

We have saved hard over the past three years and the deposit is in place (being held by our solicitors ready for exchange).

We are continuing to save for stamp duty, but it looks like there will be a shortfall by the time it falls due (probably of around £3,000 - £5,000). My question is about what options there may be to fund the shortfall. A couple of the options I have considered:

1. A personal loan, probably to be repaid over a two-year period. The payments would be very affordable. However, I gather that if we did this before completion, there would be a risk that the mortgage offer would be withdrawn (as some lenders do a final credit check prior to completion). This would obviously be a disaster. Is this therefore a non-starter?
2. A credit card. I currently only have one credit card, with my own bank Natwest, which I only really got to improve my credit rating (just using it for around £200 pcm and paying it off every month). Would it be a viable option to get a 0% deal over, say, 20 months, pay the stamp duty shortfall using the card and then steadily pay it off over the 0% period? Has anyone had any experience with this? Is stamp duty payable with a credit card (I assume this will be fine, as the money will be paid to our solicitors, who should accept CC payments)? As this would also show up on a credit check, might this also lead to problems with the mortgage advance?

My hope is that one of these options is somehow viable. We are not mortgaging right "up to the hilt" as in we could have borrowed slightly more if necessary. I am not sure if this means a bit of extra borrowing from elsewhere could be passable.

All thoughts welcome, especially if anyone has been in a similar situation. Thank you!

HappyMJ

Use your credit card to buy stuff with (it won't show up on your credit report until a statement is generated so time it well) and use your full month's income to pay the stamp duty then after completion you'll have no money whatsoever so feel free to continue to use your credit card to buy the food and pay the bills with. Then look around to save money on the interest...and/or pay it off ASAP.

On completion day you could go into overdraft which won't show up for a month on your credit report so you'll be safe too. You could also take a cash advance on the last day on your credit card for the last few hundred you might be short.

libf

Bank of mum and dad not available?

Rench

Thanks both. Bank of mum and dad would really be a last resort. It is possibly available, but we have already had a bit of assistance with the deposit money, so I'd rather not if at all possible.


HappyMJ, your suggestion is creative and definitely worth thinking about. I would have to cancel all my standing orders in time (bills, last bit of rent etc) to free up the income for SDLT, but it might work if it was timed properly.

libf

I think SDLT isn't 'late' as long as you pay within 30 days of completion too, so if that's the case then it might get you another pay day in there to help.

Rench

Yes libf, you are right. The shortfall quoted already accounts for the extra pay-day I'm afraid!

kingstreet

libf wrote: »

I think SDLT isn't 'late' as long as you pay within 30 days of completion too, so if that's the case then it might get you another pay day in there to help.

Not if you need a mortgage.

CML Handbook requirement - solicitor has to have all cleared funds, inc stamp duty in hand in advance of completion.