Borrowing more than purchase price

Ed-1

se2020 said:

There was a thing during covid that let you withdraw funds from the Lisa penalty free.
Not sure if it's still going?

The LISA withdrawal penalty was reduced from 25% to 20% during Covid. If you withdrew you still had 20% deducted (but this merely takes away the bonus that was applied when it was paid in).

Schwarzwald

Ed-1 said:

Is it possible to borrow more than the amount needed to purchase the property on a purchase mortgage or can this only be done through a subsequent remortgage?

E.g. deposit £60,000. Purchase price £120,000. Borrow £80,000.

This would be to allow all funds in Lifetime ISAs to be withdrawn penalty-free to be used towards the purchase price but then effectively equity released again.

Even in your example you aint borrowing more than purchase price …. Just 66%. Your deposit just isnt 60k, it is 40k.

so the question is a different one:

can you withdraw Lifetime ISA funds penalty-free by claiming to use them as equity deposit but actually dont doing that?

i dont have the answer to that though

grumiofoundation

Schwarzwald said:

Ed-1 said:

Is it possible to borrow more than the amount needed to purchase the property on a purchase mortgage or can this only be done through a subsequent remortgage?

E.g. deposit £60,000. Purchase price £120,000. Borrow £80,000.

This would be to allow all funds in Lifetime ISAs to be withdrawn penalty-free to be used towards the purchase price but then effectively equity released again.

Even in your example you aint borrowing more than purchase price …. Just 66%. Your deposit just isnt 60k, it is 40k.

so the question is a different one:

can you withdraw Lifetime ISA funds penalty-free by claiming to use them as equity deposit but actually dont doing that?

i dont have the answer to that though

No because your solicitor withdraw them on your behalf and holds the funds

Ed-1

Can you borrow more with your current lender within a fixed rate period?

K_S

Ed-1 said:

Can you borrow more with your current lender within a fixed rate period?

@ed-1 Subject to meeting affordability and eligibility criteria with that specific lender, yes. It's usually be called either a 'further advance' or 'additional borrowing'. The rate will be whatever is available at that point in time, not your existing fixed rate.

Fighter1986

You'd need to use your entire LISA funds towards the purchase and remortgage at a later date. Find a lender who allows a drawdown on equity without charging an ERC for changing loan amount during the initial fixed period.