Applying for loan before exchanging contracts?

Hello All,

I am in the process of buying my first house with a £72k mortgage costing around £350 per month. My income is £2300 a month and I'm a first time buyer so affordability is well within the parameters. I need a loan of 15k to completely redo the house but am unsure as to whether it is wise to apply for the loan now as, although the mortgage is all ready to go, we have not yet exchanged contracts. The loan will be around £300 per month, so including the mortgage affordability is not an issue.

I want to get the loan in place now so it is all ready for when I get the keys. Is this wise or could it impede on the mortgage application despite no affordability concerns?

I must also point out that I am likely to renegotiate to reduce the mortgage to 70k. Would this have any impact?



  • i am not expert but i would wait until you have the keys before taking out additional credit commitments
  • foxy-stoatfoxy-stoat Forumite
    6.9K Posts
    Seventh Anniversary 1,000 Posts Name Dropper
    Wait until you have completed as it will have an impact on the mortgage application - unless you have got your DIP based on you having another £15,000 of personal debt.

    Thinking about it I had a question asked by my lender if I was planning on taking out any further unsecured debt after I are already planning on borrowing so where you asked a similar question?
  • butterflybookbutterflybook Forumite
    125 Posts
    wait until you have completed, some lenders do another credit check prior to completion and if they see something has changed it could delay things considerably and they could even decline to lend. It is always advised to wait until completion has taken place.
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Don’t do it. If they do another credit check and they see it they may drop you completely, not worth it at all.
  • AnotherJoeAnotherJoe Forumite
    19.6K Posts
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    Are you at limits like 90 or 95% LTV? If not get a bigger mortgage so that the renovation money is included and then overpay the mortgage at the rate you'd have paid the personal loan off.
    With a mortgage the rate will likely be at 1/2 or better the rate you'd have paid on a personal loan.
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