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Additional Borrowing on Mortgage - Is a deposit towards a new home a valid enough reason?
hitman126
Posts: 68 Forumite
I have an existing mortgage with the Yorkshire Building Society and currently considering taking out additional borrowing on the mortgage to raise a deposit towards a bigger family home. I am a bit worried though that the purpose of the loan may be rejected by YBS, as it may be considered as not a valid enough reason or criteria for an additional loan.
Before I drop myself in it by contacting them, I'd like some advice on whether or not a deposit towards a new home is a good enough reason for a lender to approve this type of loan application and if anyone has had any such previous experience with the Yorkshire Building Society that they can share, all the better. Thank you.
Before I drop myself in it by contacting them, I'd like some advice on whether or not a deposit towards a new home is a good enough reason for a lender to approve this type of loan application and if anyone has had any such previous experience with the Yorkshire Building Society that they can share, all the better. Thank you.
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Comments
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It will inevitably come down to two things. Equity and affordability - without either of those, no dice.0
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I'm confused why you need to release equity for this "deposit" anyway. Why wouldn't the chain simply do its normal thing and pass the bottom-of-the-chain's deposit up?
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Do you intend to retain your current property? If so, to what purpose will it be put? If you plan to let it, you may find it easier to remortgage on a 'let to buy' basis than to get a further advance with an immediate request for consent to let from YBS.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, 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. Please do not send PMs asking for one-to-one-advice, or representation.0
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If you are intending to move in the near future, surely it would be better to wait until you have found a new property. You can then use your cash savings to top up the deposit.
I don't understand why you would to increase the mortgage your existing property, given that:
1) You will be paying remortgage fees on your current property AND new mortgage fees on your next property.
2) In the meantime you'll be paying interest on the additional money you have borrowed while presumably earning no interest on it if the cash is sitting in a current account.
The only way this makes sense to me is if you are intending to make use of the additional money by investing it (for example in a pension or stocks & shares ISA).
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