additional credit when waiting to complete

lawn_75

Hi,

I'm in the process of buying a new build that is due to be completed in March 2020. We sold our existing property, and have exchanged contracts plus deposit with the house builder and we are now in rented until we can complete next year.

I would like to take out a loan, £8,800 @ £150p/m and the affordability is OK according to the broker, but they still advised to wait until after completion (which will be 9-10 months away).

The mortgage is with Santander and they have already done 2 credit checks. First was in March when process started and the 2nd was in June when we exchanged. If they did another check and didn't like the affordability is it a straight no or do you have the option to remove the additional borrowing e.g I could sell shares to pay off the loan.

Thanks

[Deleted User]

Don't take out any additional credit until after completion.

The risk may be small, but they could withdraw the mortgage offer.

BoGoF

Really not worth the risk

csgohan4

I would be more worried why you need to take out a loan before buying a house.

Can you you really afford something which will be your biggest debt of your life?

Take out a loan at your own risk, below someone did and lost their mortgage

https://forums.moneysavingexpert.com/discussion/5930981/help-mortgage-offer-withdrawn-after-exchange

[Deleted User]

As above, don't do it.

Also with completion that far away, the offer may need extending (what if date slips?) - which will almost certainly require a new credit search.

Even if it doesn't require extending, there are various options I've seen which can cause trouble - solicitors informing the address on the offer doesn't match land registry (system update may force a re-check), typo in any of your personal details is noticed, any random audit/QA etc.

£150pm is significant, although in reality you could likely afford it - could you actually afford it on lender calculations (stressed rates etc)

lawn_75

so we are borrowing £427k and max lending with the additional £150p/m is £474k or £565 on a 5 year so hoping there would be the wiggle room.

I also do share scheme @ work which costs me £400pm so could easily increase take-home to counter. I guess the question is is it a straight withdraw from the lender or is there the opportunity to rectify?

And yes, the mortgage offer expires is likely to slip. Is it worthwhile me speaking to Santander?

lawn_75

csgohan4 wrote: »

I would be more worried why you need to take out a loan before buying a house.

Can you you really afford something which will be your biggest debt of your life?

Take out a loan at your own risk, below someone did and lost their mortgage=QUOTE]

Thanks for this, the general advice appears to be settle the finance and all should be fine. The situation i'm in is the loan would be easily clearable if I sold some shares or I could sell my car (that costs £700p/m).

BoGoF

Do you think the mortgage company care if you 'could' settle the loan by selling assets. How would they even know that you could?

Why not sell the assets now to raise the funds.

amnblog

No no no.

You risk your mortgage offer and Santander are a poor lender to try to rectify the situation if it tips your mortgage offer over.

lawn_75

I think the advice here is quite conclusive!

Not what I wanted to hear, but don’t want to risk the mortgage, so will leave it for now🙁

EmKnox

I have made the mistake of taking out extra credit while we are waiting to complete on our first purchase and it has done nothing but make me extremely anxious.


We were initially told by our Halifax advisor that we were done with credit checks upon application and it wasn't put to us to refrain from any extra credit, in fact our advisor told us to not worry about taking a phone contract out and it was only until I saw the discussions on here that have made me massively regret it.


Since applying in April we now have a new phone contract, a new couch on finance, and my partner stupidly took out another credit card that he hasn't even used. Due to exchange and complete within the next couple of weeks and am panicking like hell.


The debts aren't huge so if they do re-check us I'm hoping they will just take this into account of our original affordability (£220k) as we only ended up borrowing £88.2k, but just don't do it - it's not worth the risk and extra stress and I wish I had known about potential checks from the start.