Bets way to loan final £30 to be mortgage free
Paulinus
Forumite 6 Posts
Dear Brainiacs
I now have been taking advice from MSE for 9 years now and have been overpaying my mortgage by double. So have done really well. 25 year mortgage nearly paid off in 10 years..ish. I am now beginning the next phase and need some help please..
Times change and my partner and I are now selling the house and starting a LAT relationship (Living apart together) in nearby cities. So we are selling up and splitting the money from the house. Thats the story... so here is my question...
I estimate I will get around £90K as my split from the house.
However to buy a decent apartment in my city will cost £120-125K so I have a £30K shortfall.
I should have an excellent credit rating as I have no other debt and have been a goody two shoes with my mortgage.
Ideally I want to be a cash buyer and thus mortgage free and can definitely afford to pay back within 3 .. or even 2.5 years from my salary (I have already been paying £1350/month as part of my mortgage overpayments for 7 years)
Q. how could/should I raise a loan for £30K?
I mentioned this to one bank on the phone and the guy immediately said I cannot use a loan for a house purchase... is this a law of some kind?
Sainsburys look good but will still cost about £3.5K for a 3 year £30K loan
Can I take 2 x £15K lor 1 x £30K loan out?
What do I say I need the money for when they ask?
(I could always buy a £30K car!)
How do I go about this exactly & what is the best way to manage this?
Many thanks in advance. P.
I now have been taking advice from MSE for 9 years now and have been overpaying my mortgage by double. So have done really well. 25 year mortgage nearly paid off in 10 years..ish. I am now beginning the next phase and need some help please..
Times change and my partner and I are now selling the house and starting a LAT relationship (Living apart together) in nearby cities. So we are selling up and splitting the money from the house. Thats the story... so here is my question...
I estimate I will get around £90K as my split from the house.
However to buy a decent apartment in my city will cost £120-125K so I have a £30K shortfall.
I should have an excellent credit rating as I have no other debt and have been a goody two shoes with my mortgage.
Ideally I want to be a cash buyer and thus mortgage free and can definitely afford to pay back within 3 .. or even 2.5 years from my salary (I have already been paying £1350/month as part of my mortgage overpayments for 7 years)
Q. how could/should I raise a loan for £30K?
I mentioned this to one bank on the phone and the guy immediately said I cannot use a loan for a house purchase... is this a law of some kind?
Sainsburys look good but will still cost about £3.5K for a 3 year £30K loan
Can I take 2 x £15K lor 1 x £30K loan out?
What do I say I need the money for when they ask?
(I could always buy a £30K car!)
How do I go about this exactly & what is the best way to manage this?
Many thanks in advance. P.
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A £30,000 personal loan with Sainsburys would have a 6.7% interest rate.
You can take two £15,000 loans with different providers if they will approve the loans. You would need a high salary for this to work.
I am 53 and want to pay off any mortgage asap. so quick is good even if it costs £1-2K II want to be free and clear. I could do £30K in about 3 years or less. (I earn around 38K gross/ year
Question is what do I say my two £15K loans are for?
I get the impression that if you say you want to pay for property that the lenders will not allow that?
Is this true?
P
Whether you take a mortgage or a loan...it's still a debt.
Why not just take a mortgage on a low rate fix for 2/3 years...and pay it off within 3 years?
That is true. You would have to say you are using the loan to buy a house which would not be allowed. To say anything else would be considered fraud by false representation.
There's ways around it. You could accrue a large debt on a credit card by putting all of your expenses on it whilst saving every penny of your income then get a loan to refinance the credit card debt the reason for the loan would be to refinance your debt.
Get a mortgage youll have a rate of under 2% pay it off in full once your fixed term is up simples
Or look around for a cheaper property for 100k a bit out of where you want
Being mortgage free is great for a lot of us it will free up over 30-50% off our income if you can comfortable afford a small 30k mortgage dont worry so much :]
Good luck
Emergency fund 23k
Just take out a small mortage that can either be overpaid without penalty, or take out a small mortgage, save up in parallel in high interest rate accounts and pay it all off at the end of the 2 or 3 year fixed mortgage period.
So, Yes ... I am coming around to the fact that if I get a short mortgage it might just be a lot simpler.
( I kind of wanted to offer cash to give me a little more leverage when buying my flat, but ultimately it hardly seems worth it)
Thanks for the loan `fraud` warning that answered my Q clearly. I really don`t want to get in trouble!
So where i am at now is this:
First Direct do a lifetime tracker at 1.99% = APR 2.5% .
NO set up fee
I CAN overpay
& NO early redemption charges.
I calculate the risk will be minimal even if interest rates rise to say 5% I can cope.
OK I will probably pay £1-2K to borrow the £30K, but it means that I will pay about £1,300/month (which is £60 less than what I pay in overpayments right now!)..... and that is for only TWO YEARS!
Sounds like job done (as long as I dont get the sack!)
If anyone spots that I am I missing anything, please let me know?
Thank you all again
P