Best way of borrowing £40,000

somethingcorporate

At exchange you are committed to buying the house, hence why losing the mortgage last minute due to a lot of additional borrowing could be a financial disaster. Wait until you have the keys in your hand before proceeding on your plan.

financegeek

Pixie5740 wrote: »

Yes there can be a penalty fee for repaying secured loans early. For loans over £25k there is no upper limit as to how much the lender can charge you in early redemption fees.

Secured loans also tend to have a variable interest rate rather than a fixed interest rate and from the threads on this board the rates only appear to vary one way and that's up.

You will be limited by the combined LTV of the mortgage and the secured loans. 70% to 75% is usual but I think some lenders such as Optimum Credit (not recommending them by the way) will go up to 95% LTV. However, the higher the LTV the higher the interest rate so then you're back to two smaller, unsecured, personal loans being less expensive.

the above statement isn't quite correct. Secured loans are now regulated by the FCA, so like a first charge mortgage can only charge the early redemption penalties stipulated in the illustration / offer.

did you arrange your mortgage through a broker? if so it may be worth speaking to them about what secured options are available to you.

Edi81

That!!!8217;s why everyone has said no borrowing until completion

If after exchange was ok then people would say that.

Pixie5740

financegeek wrote: »

the above statement isn't quite correct. Secured loans are now regulated by the FCA, so like a first charge mortgage can only charge the early redemption penalties stipulated in the illustration / offer.

Indeed but there is no upper limit as to what that might be unlike loans for less than £25k where the penalty is limited to two months interest.

AstroTurtle

Can't see you getting approved for 2 loans of £20,000 immediately after securing a mortgae for £75,000 on a salary of £50,000 per year based on an affordability assessment

If you manage to get two approved even over 7 years (Massively Unlikely to get headline rate on a period past 5 years) You're talking over £530pcm in loan payments.

If it's over 5 years your talking nearly 720pcm in payments on a salary of maybe around £3,000 per month then take away the mortgage payments and other commitments you'll probably fail a affordability assessment and if the second loan is referred to underwriters they'll see the excessive applications for credit as odd.

best bet is to find someone who can lend £40,000 in one loan. But factor in you may fail vehicle finance applications.

That's all on the basis as mentioned you are approved for the best rates which 49% aren't.

Crumble_

I was thinking a smaller loan initially, then car finance and then possibly a second loan / credit card. If not, the missus might have to get one but hasn’t got the best credit score / history yet