Urgent advice please - lumping 20k on card until house sale?

big_gus

Chaps, and ladies.....any help or advice much appreciated here.

We are in the process of buying a business for roughly 500k but due to Lenders pulling the agreed rate etc, we are now 20k short of the 30% deposit needed.

I have the money - but it is tied up in two houses and we don't have time to sell one quickly to raise the cash. (As it stand, I have around £150k in equity)

The mortgage etc has already been agreed so my question is - can I stick 20k on credit cards, knowing that when one of the houses sells I will literally pay off that 20k. (we have someone who wants to but the house, btw, so hopefully it shouldnt take too long.....havent yet worked out the cost of having 20k on cards for three or four months either).

My fear is, by doing this, and if the Lender who has already agreed the mortgage finds out - they will withdraw their mortgage offer? Obviously, they've already completed their credit checks on me, prior to agreeing, and were happy with me.

We really dont want to lose this business for the sake of 20k....it is a good business, the books are good, and the bank are very happy with things.

So:

* Can I bung this amount on cards, for 3 or 4 months, and pay it off via the house sale

* What would the cost to me be (I would have to put 10k on my Abbey card, 7.5k on Egg, and 5k on Virgin card.)

* Would I then be able to balance transfer to a 0% card whilst waiting the 3 or 4 months for the proceeds of the house sale

* Would this affect my mortgage offer? Would they check, having already offered me the mortgage (as long as the payments are being made, do they care?)

Thanks for any advice offered, I realise it's not the ideal situation, but we have very few options left since the credit crunch hit. We had everything agreed with out Lender up until 6 weeks ago and now have no way of releasing the 20k needed.

Thanks in advance

big_gus

Can any of you guys help with this, at all?

AMILLIONDOLLARS

What's the APR on the cards?
you'd find it very difficult to bung £20k on 0% cards, never mind the fees for doing this!
Why not go back to your lender and explain the situation to them, if you have a buyer for your house, they may advance you the extra money on a short term basis but at a premium.

Snooze

big_gus wrote: »

Can any of you guys help with this, at all?

I can see two flaws with your plan :

1. Getting a card with a £20k limit from the start will be highly unlikely.
2. A lot of buyers are pulling out of house sales at the last second when they suddenly develop cold feet from the prices crashing, so you're taking a huge risk imho. If the sale doesn't go through you're going to be up !!!!-creek without a paddle.

Don't know what to advise to be honest. Maybe bell your mortgage co. up and explain the situation; the £150k equity in your house etc and see if you can do an equity release or something.

Rob

big_gus

Thanks guys.

Snooze: I already have the cards I mentioned with various limits - but enough to whack 20k on them.

Plus, I keep getting offered (and refusing) Barclays credit card and several others. The plan (admittedly high-risk) was to whack the money on....then get the Barclays, and one other on 0% balance transfer, tranfer the lot over, then pay it off when the house goes through (I know there's a risk with the house too).

I guess I'm not really asking about the risks etc, as I'm well aware of them....I'm just asking whether it's legal/allowed to do that....or will the mortgage company withdraw their offer (if they find out?).

They wont lend anymore, btw, in answer to the previous question about outlining the situation to them....they are dead set on lending 70% and not a percent more.....even though they know that lending 73% would remedy my problem! They don't care about the equity I currently have.

Grrrr.

Snooze

big_gus wrote: »

Thanks guys.

Snooze: I already have the cards I mentioned with various limits - but enough to whack 20k on them.

Plus, I keep getting offered (and refusing) Barclays credit card and several others. The plan (admittedly high-risk) was to whack the money on....then get the Barclays, and one other on 0% balance transfer, tranfer the lot over, then pay it off when the house goes through (I know there's a risk with the house too).

I guess I'm not really asking about the risks etc, as I'm well aware of them....I'm just asking whether it's legal/allowed to do that....or will the mortgage company withdraw their offer (if they find out?).

They wont lend anymore, btw, in answer to the previous question about outlining the situation to them....they are dead set on lending 70% and not a percent more.....even though they know that lending 73% would remedy my problem! They don't care about the equity I currently have.

Grrrr.

Yes, I saw that you already had the cards, but you want a 0% one in order to do this and that was what my comment about not getting one for £20k was in relation to.

Even if you did, you'd be looking at 3% ish balance transfer fee which would be £600 of course. Add to that that they can sometimes take a month for the BT to happen as well and as time isn't on your side .....

As for legalities there's nothing to stop you doing this, but like I say, I seriously doubt you'll get enough credit limit at 0% in order for you to do it. You could of course max out the cards you've already got but it'll obviously cost you a large slab of cash in interest. Depends how badly you want the business to risk this potentially going pear-shaped...

As for the mortgage co. checking again I don't know I'm afraid. Might be best asking that question on the mortgages forum.

Rob

big_gus

Thanks Snooze.

Losing or purchasing the business depends on it, I'm afraid. Despite the banks being well aware we have the cash tied up in two properties, they will not lend anymore than 70% of the business purchase price. That leaves us needing to come up with 157k and at the moment...by exhausting every cash option...I have roughly 135k.

I'm not prepared to lose this business when I know I have the funds...I just can't bl*ody release them.

I'll have to keep thinking I guess.

AMILLIONDOLLARS

Are you in competition with another buyer for this business? In the economic climate everyone is scaling back their spending, is it worth the risk of proceeding at this stage, as with house buying, prices have started to drop, might this not be a case also for this business, the person selling it to you might be in the process of jumping ship!! Go over the books again, double check the figures and potential, and maybe try to renegotiate the purchase to within your current means.

AMD