Can I add Stamp Duty to the mortgage?

benbay001

Sounds to me like they are confusing fee free mortgages with Taking a mortgage with the cost of the stamp duty included.

steampowered

You can only do this if the bank will let you increase the size of your loan. In this case you are maxed out so the bank is not going to lend you any more. 

csgohan4

I think the question is why are you asking this question?

Can you really afford to buy a house?

hotnoise

steampowered said:

You can only do this if the bank will let you increase the size of your loan. In this case you are maxed out so the bank is not going to lend you any more. 

I've been told I can take out a mortgage up to ~£330,000. I only need(ed) £247,500. Hence why throwing £7,500 on top of that to cover the Stamp Duty didn't seem like an unreasonable thing to do.

I'm pretty sure what was stated in a previous reply, i.e. it would mean the deposit amount is less than 5%, is the correct answer and so I'll discuss with the mortgage broker my options around increasing my deposit contribution to rebalance that. If it can't be done, it can't be done, but it'd be nice to be able to use that £7,500 for other, new-home related costs.

oldbikebloke

hotnoise said:

but it'd be nice to be able to use that £7,500 for other, new-home related costs.

so what you are saying is you wish to borrow an additional £7,500 over the life of mortgage term and pay interest on that extra borrowing so you can keep back some of your own money to spend on "other things".

Many people would regard borrowing money over 25 - 30 years to pay a tax bill as being rather an expensive way of doing it, even if at mortgage rates....

kingstreet

The loan to value trumps any affordability limit. If you can borrow £1 million based on your income you will still be limited to the lower of 95% of the purchase price or lender surveyor valuation.

hotnoise

oldbikebloke said:

hotnoise said:

but it'd be nice to be able to use that £7,500 for other, new-home related costs.

so what you are saying is you wish to borrow an additional £7,500 over the life of mortgage term and pay interest on that extra borrowing so you can keep back some of your own money to spend on "other things".

Many people would regard borrowing money over 25 - 30 years to pay a tax bill as being rather an expensive way of doing it, even if at mortgage rates....

Pretty much, yes. At the end of the day, it's an amount of money that I have to pay out, so I don't think it's unreasonable to consider my options around paying it as a lump sum up front or paying it as an ongoing amount for the length of the mortgage. I mean, that's what everyone is doing when deciding how much deposit to lay down and how much mortgage they should take out anyway, otherwise the recommendation would be to keep saving until you can afford 100% of the property. The difference here is the money isn't going towards paying off the property value, but then neither is the monthly rent that I'm currently paying, and that is significantly more than what the mortgage repayments will be, with or without the Stamp Duty on top.

To put it another way, if I held off buying now and continued to save £1k p/m for 7 months, the amount I'm paying out on rent would've paid all the interest that would accrue on having the Stamp Duty on the mortgage over a 25 year period, and then some. And that'd be 7 months that I could've been paying towards a mortgage, and living in a bigger and better home. For the sake of, I don't know, £20-30pm? additional mortgage payment for the full duration, I don't see why it's not an option I should be considering.

Having said all that, the broker could very easily (perhaps probably) tell me tomorrow it's not an option, and so end of debate

renfirsttimebuy

I thought of the same thing too...so many expenses when buying a house...this fee and that fee. Saving a deposite is hard enough and then with all the other things!! If you can get stamp duty included in your loan and it will help out with all the other mountains of cost. I don't see why your shouldn't.
It's better to get on the property ladder.

Slithery

renfirsttimebuy said:

It's better to get on the property ladder.

Maybe for some people - I much prefer renting.