Applying for loan before exchanging contracts?

3 Posts

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?
Thanks!
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?
Thanks!
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Thinking about it I had a question asked by my lender if I was planning on taking out any further unsecured debt after I remortgaged.....you are already planning on borrowing so where you asked a similar question?
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.
With a mortgage the rate will likely be at 1/2 or better the rate you'd have paid on a personal loan.