Applying for a loan before starting mortgage ...

cb078

Hi All!

First post :j Hoping this is the right tone for the forum ...

If anyone can help, my question is around whether I should take out a small loan (approx 7,500 for better interest rates) for things like furniture and home refurbishments before I start my mortgage?

I am probably a week or so away from exchange now (v. exciting!). I have my mortgage confirmed which i'm sure we were lucky with (7.5% deposit; finances not in great shape with recent holidays, car purchases etc.). My credit score from MSE's Credit Club (which is pretty useful for those who aren't using!) is 999 and a credit hit rate of 74%. We've been renting for the last 2 years so are aware of what we can afford each month.

My options are to either apply now whilst i'm not paying any mortgage/ still have a high credit rating (which i'm sure will drop as soon as we start the mortgage?). Or, apply 6-12 months or so from now when I have a few mortgage repayments leave my account and my credit score starts to increase again.

All advice greatly appreciated!

Thanks,
Charlie

DCFC79

You should apply for the loan once you haved moved in.

Unlucky for you your credit score of 999 isnt seen by lenders so wont be taken into account for loans.

foxy-stoat

My advice would be to get as much furniture from ebay or freecycle etc, do not take out a £7.5K loan and save as much money as you can and do improvments over time. You will be in the property for a while yet and I wouldnt be rushing out to get more into debt, especially when your LTV is 92.5%.

computerbar

If your mortgage is confirmed that why worry.

glentoran99

Taking out a loan now could jeapordise your mortgage they could do a credit check before completion and your affordability with the new loan could take you under the threshold

JimmyTheWig

computerbar wrote: »

If your mortgage is confirmed that why worry.

Presumably the mortgage was confirmed without the mortgage company knowing that the OP was planning on taking out a loan.
If they take the loan before the mortgage company release the funds then the mortgage offer may get pulled and the OP will be stuck.

Ilona

Hi. Get the roof over your head sorted first and move in. Then start looking around for second hand furniture. Ask family and friends if they have anything spare they don't need. Look on free web sites, charity shops, car boot sales, ebay, get stuff free or buy cheap. Don't put yourself in debt just for a few fancy bits of furniture.
Ilona