Loan Advice

Hythlodaeus101

Hi folks, I'm wondering if anyone could help clear something up.



My situation is - I own my home fully paid with no mortgage, I have spent the last few months doing some studying and traveling and now getting back into work mode again so wont have any pay slips etc for a couple months.



I'm looking to buy a second property at some point soon. I was going to wait till I had worked a few months again to prove my income but Ive noticed a house that I am interested in at the moment.



I'm new to mortgages and loans so not sure which is the best route. I bought my first home with savings and some inheritance so didn't need a loan.


My question is that would it be possible to get a loan secured against my first property for about 75% of property value over say 5 years and paying only the interest for the 5 years and at the end of the agreement pay the rest in full.



I am planning on keeping and renting out the first property for this 5 year period. I would be getting the amount to pay of the loan by selling the first home at the end of the 5 years.



I was talking to a family member recently and they mentioned they bought their house before retiring by getting an loan and paying the interest only for a few years then once they got their retirement bonus they paid rest in full.


I have seen a secured loan offer just to give an example for £50,000 for 5 years paying £59,000 roughly in total, would a bank let me pay the £9,000 over 5 years and the £50,000 at the end of the 5 years by agreeing to sell the first property?


Cheers for any advice

-taff

You'll still need an income for a loan.

Gaz83

Your family member would have had an endowment mortgage, fairly common back in the day. You needed to prove to a bank / building society how you intended to repay the capital once the interest period was up.

Not sure if you even still get them.

dealer_wins

Short answer is no, long answer is no established means of repayment no loan!

foxy-stoat

Wait until you have proven income before thinking about going for a mortgage and no you wont be able to take out a £50,000 secured loan and only paying the interest each month.

[Deleted User]

Hythlodaeus101 wrote: »

I have seen a secured loan offer just to give an example for £50,000 for 5 years paying £59,000 roughly in total, would a bank let me pay the £9,000 over 5 years and the £50,000 at the end of the 5 years by agreeing to sell the first property?

Furthermore, even if this was possible, the 9k interest is based on a reducing balance, from 50k to zero.

By not paying any capital off, the interest would be more than double.

foxy-stoat

Deleted_User wrote: »

Furthermore, even if this was possible, the 9k interest is based on a reducing balance, from 50k to zero.

By not paying any capital off, the interest would be more than double.

The doesn't understand mortgages - they wont understand how loan repayments and interest is worked out.

"Yes sir, we will lend you £50,000 and charge you £9,000 interest, repay over 5 years @ £985 a month"

"Can I not just pay you £150 a month for 60 months and make a one off payment of £50,000 at month 60?"

No idea why not?

Hythlodaeus101

Cheers folks, well most, I'll hang off till I'm renting out first property/ working for a few months again to prove income

The doesn't understand mortgages - they wont understand how loan repayments and interest is worked out.

"Yes sir, we will lend you £50,000 and charge you £9,000 interest, repay over 5 years @ £985 a month"

"Can I not just pay you £150 a month for 60 months and make a one off payment of £50,000 at month 60?"

No idea why not?

What a complete asshat :rotfl:

DCFC79

Hythlodaeus101 wrote: »

What a complete asshat :rotfl:

That's ever so nice of you, I'm sure stoat will be thrilled with it lol.