Bounce back loan towards deposit?

Sibbers123

It’s a bad idea. In 12 months time you will be paying your mortgage and the BBL repayments. The BBL interest rate is 2.5% after first 12 months. Your mortgage will be cheaper than that (most probably).

if you borrow £50k via BBL the repayments will be quite large as the maximum term is 6 years including the year of no repayments, so you will be paying back £10k per annum plus interest (on top of your mortgage) - any prudent bank would take these repayments into account when they assess affordability.

haras_n0sirrah

I am just trying to warn you that the lenders are seeing any government support (seiss, bbl etc) as a declaration that you have been adversely affected by corona as that is one of the conditions of taking out the loan or support in the first place. 
I have a client who has taken a payment holiday despite not needing to where lender has now refused porting and additional borrowing as 'they dont want to increase the burden while they are having a difficult time'. They had an aip in Feb. Had they not taken the payment holiday to do their garden they could have saved themselves a 7k erc. Another client who is self employed didn't need the seiss but claimed it and lender has offered them 60k less than needed as they have based their income on the seiss grant rather than their tax assessment figures. If you are planning on getting a mortgage in the near future you could well be shooting yourself in the foot as the lenders are seeing any government support as a big red flag that your business is in trouble 

Grumpy_chap

There are some commenting that banks will see the business that claimed optional support as possibly indicating that the business does not have great financial resilience.  I doubt that anyone on these forums knows for certain how the banks will see a business that took the BBLS versus a business that did not.  The logic that a lender would prefer a borrower / business that did not need the BBLS is simple though.

se2020 said:

I currently have 100k in my bank account. 
If I was buying a house I would put 50k down as a deposit and keep 50k back for running the rest of my life.
If I borrowed 50k from the bbl I would then put 100k down on the house and still have 50k in the bank. 
In some ways I would be better off by putting 100k down, higher ltv, lower risk to the bank, less mortgage interest to pay.

I wonder whether a change of order of events could result in the same outcome and not have risk the BBLS impacting the mortgage application?

• Start with £100k in the bank
• Use £90k as deposit and keep £10k for everything else
• Borrow £50k BBLS
• End result £40k lower mortage, £60k in the bank for everything else

Only a slight change in outcome, but the BBLS cannot affect the mortgage decision as BBLS does not exist when the mortgage is granted.

haras_n0sirrah

Lenders are asking as part of their underwriting what support has been claimed by the business. You would therefore have to declare that a bbl has been obtained 

Natsplus

How much importance would a bbl hold if in a joint mortgage application,  one applicant who is employed full time contributes 85% to the loan amount and the director of a limited company contributes 15% to the loan amount?