Need 75k- mortgage, loan or something else?

newlease

ThePants999 wrote: »

A mortgage is simply a loan that's secured on the property. You won't be able to get an unsecured loan of that size. I assume you have no other asset worth that much or more on which to secure a loan. So you'll need a mortgage.

Indeed, most personal loans are capped at 25k, at least using the general online calculators/brochures anyway.

I do not have other assets. Is my S&S ISA not relevant to the bank? What if it were a cash ISA? I was thinking I would qualify for the 25k loan and rather than unwrap my ISA get a similar amount as a further loan.

newlease

tonyh66 wrote: »

Can you get a LTV of 30%?, im not really sure why you don't want to extend the term to 25yrs, it doesn't mean you have to take that long to pay it back, just make the maximum overpayments and hold some of your savings back.

If I know I will pay off in 5 why get one for 25? This is what I don't understand. Banks offer 5, 10, etc. up to 25, is there a particular benefit to 25 besides a lower repayment amount? Because the lower repayment is not what I want/need. I would definitely need one without any overpayment penalties with a 25 as I would be overpaying much more than the required.

newlease

creditscoremeansnothing wrote: »

Move to the north!!
Im 36 and my mortgage is paid off in 2 years.
Prices down south are shocking and we are much nicer up here :):)

Good luck though.

I would love to, I like it up North. Sadly, my salary would also half. It's the London effect.

ViolaLass

newlease wrote: »

Indeed, most personal loans are capped at 25k, at least using the general online calculators/brochures anyway.

I do not have other assets. Is my S&S ISA not relevant to the bank? What if it were a cash ISA? I was thinking I would qualify for the 25k loan and rather than unwrap my ISA get a similar amount as a further loan.

At best that would get you £50k rather than £75k though.

Why not just get a mortgage? The system is set up for that and you'll be able to get the best rates. Why are you trying to avoid it?

jamesd

The monthly payment set by the mortgage term is the minimum you're required to pay. If you have a 25 year term this means that you can drop back to a low level so that your emergency fund can last longer if it is needed. Without making an arrangement with the mortgage lender that would show negatively on your credit report or might be on terms that you don't like. So lower gives you more freedom to decide for your self and more flexibility.

AnotherJoe

newlease wrote: »

Does a 30% LTV 5 year mortgage make sense? What are the benefits over a regular loan?

The interest rate will be much lower on a mortgage . By five year mortage I take it you meant five year fixed rate rather than a five year term??

If so, let's say it's twenty year mortage with a five year term fir which rates are fixed, If there is a maximum amount you can overpay (which there often is) then save the difference into a high rate account and use that to pay off the rest when the five year term ends.

If you mean a five year mortage, eg all paid off over five years, the benefit would be a lower interest rate than you'd get for a loan, plus the ability to get it in the first place since you are very unlikely to get an ordinary loan for that much money.

System

Upon getting said mortgage at good LTV I'd put into the s&s isa rather than overpay

By the way, unless you're investing don't think its wise to delay house purchase for a better LTV, you want to secure a low house price and can always remortgage to a better LTV later if you choose to pay it off

AnotherJoe

MatthewAinsworth wrote: »

Upon getting said mortgage at good LTV I'd put into the s&s isa rather than overpay

So would I but the OP seems to be a very cautious individual so that doesn't fit their risk profile, and if they are looking to pay off in five years investing is a risky strategy for overpayments.

newlease

ViolaLass wrote: »

At best that would get you £50k rather than £75k though.

Why not just get a mortgage? The system is set up for that and you'll be able to get the best rates. Why are you trying to avoid it?

I wanted to avoid a mortgage if it was unnecessary. It does seem the personal loan won't cover my needs, so mortgage is still the right choice even if I'm not the typical mortgage seeker.

newlease

jamesd wrote: »

The monthly payment set by the mortgage term is the minimum you're required to pay. If you have a 25 year term this means that you can drop back to a low level so that your emergency fund can last longer if it is needed. Without making an arrangement with the mortgage lender that would show negatively on your credit report or might be on terms that you don't like. So lower gives you more freedom to decide for your self and more flexibility.

So, basically get a 25 year without ERC and pay in as if it were a 5 year?

I am just unsure what you mean with this: "Without making an arrangement with the mortgage lender that would show negatively on your credit report or might be on terms that you don't like." Is this if I take a 5 year (or any for that matter) and am unable to pay at the higher rate?