Remortgaging with small LTV shortly after buying?
pinkteapot
Posts: 8,040 Forumite
Looking at buying a house at the top end of our limit for a cash purchase. We can buy without a mortgage and we'd have enough left for minor initial cosmetic changes and emergency repairs, but that's about it. Longer term, we'd want a new kitchen and, subject to planning permission, a conservatory. We'd probably do that in a couple of years' time.
So, my questions are:
It seems to make sense to buy for cash and then remortgage for about 10% LTV in a couple of years' time when we need the money. No point paying interest in the meantime. Is that a logical plan?
Assuming we still have jobs in a couple of years and our credit ratings are still good, is there any reason we wouldn't be able to get a small mortgage? Our financial situation is fine - would anything about the house stop it that we should look out for before buying? The house is rural, with a bit of land, and is a barn conversion, so not a 'standard house' like we've had before. Just having nerves about the plan falling through if for some reason we can't borrow against it!
Finally, suppose we move in and there's things a survey's missed and we suddenly have big repair bills. Can you remortgage shortly after buying a house? Is there any restriction on how long you have to have owned it?
From the last two questions above you can probably guess what I'm thinking - does it make more sense to just get the mortgage when purchasing as usual?
Last bit of relevant info - we're currently both in probation periods in new jobs. If we get a mortgage straight away while purchasing, this will limit our choice of lenders significantly. So the other reason to wait to mortgage it is better choice of lenders and probably a better interest rate.
So, my questions are:
It seems to make sense to buy for cash and then remortgage for about 10% LTV in a couple of years' time when we need the money. No point paying interest in the meantime. Is that a logical plan?
Assuming we still have jobs in a couple of years and our credit ratings are still good, is there any reason we wouldn't be able to get a small mortgage? Our financial situation is fine - would anything about the house stop it that we should look out for before buying? The house is rural, with a bit of land, and is a barn conversion, so not a 'standard house' like we've had before. Just having nerves about the plan falling through if for some reason we can't borrow against it!
Finally, suppose we move in and there's things a survey's missed and we suddenly have big repair bills. Can you remortgage shortly after buying a house? Is there any restriction on how long you have to have owned it?
From the last two questions above you can probably guess what I'm thinking - does it make more sense to just get the mortgage when purchasing as usual?
Last bit of relevant info - we're currently both in probation periods in new jobs. If we get a mortgage straight away while purchasing, this will limit our choice of lenders significantly. So the other reason to wait to mortgage it is better choice of lenders and probably a better interest rate.
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Comments
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If you are mortgage free and both earning can you not save for these improvements? If you are going to wait a couple of years anyway you might not have to extend that more than a couple of years extra to do it from savings.0
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It's true, we could. It would take substantially longer than a couple of years though, and with rates so low we're happy to pay the interest on a small mortgage.
We'd just want to be sure that getting a small mortgage on it would always be an option, again assuming we're employed and still solvent! Not just for improvements but in case things somehow go wrong - you never know what life's going to throw at you!0 -
To me it looks like you are concerned that the property, being "non standard" might not be easily mortgageable in the future with mainstream lenders.
That being the case, in your place I would buy the property with a small mortgage just to assure myself that it is indeed acceptable as security to mainstream lenders. Bear in mind that the initial costs involved in taking out a small mortgage would not necessarily be in proportion to the size of the mortgage.
Secondly, assuming that you use a broker, both of you being on probation is not necessarily an issue. We recently obtained an offer from Halifax even though I'd just started a new job 2 months ago and was still on probation. All Halifax needed employment-wise was my latest payslip, that's it. The broker did not mention it as an issue at all.pinkteapot wrote: »Looking at buying a house at the top end of our limit for a cash purchase. We can buy without a mortgage and we'd have enough left for minor initial cosmetic changes and emergency repairs, but that's about it. Longer term, we'd want a new kitchen and, subject to planning permission, a conservatory. We'd probably do that in a couple of years' time.
So, my questions are:
It seems to make sense to buy for cash and then remortgage for about 10% LTV in a couple of years' time when we need the money. No point paying interest in the meantime. Is that a logical plan?
Assuming we still have jobs in a couple of years and our credit ratings are still good, is there any reason we wouldn't be able to get a small mortgage? Our financial situation is fine - would anything about the house stop it that we should look out for before buying? The house is rural, with a bit of land, and is a barn conversion, so not a 'standard house' like we've had before. Just having nerves about the plan falling through if for some reason we can't borrow against it!
Finally, suppose we move in and there's things a survey's missed and we suddenly have big repair bills. Can you remortgage shortly after buying a house? Is there any restriction on how long you have to have owned it?
From the last two questions above you can probably guess what I'm thinking - does it make more sense to just get the mortgage when purchasing as usual?
Last bit of relevant info - we're currently both in probation periods in new jobs. If we get a mortgage straight away while purchasing, this will limit our choice of lenders significantly. So the other reason to wait to mortgage it is better choice of lenders and probably a better interest rate.0 -
Yup, that's my main concern - mortgageability.
Halifax are the main lender I'd seen who lend to people on probation periods. HSBC, who we've used in the past, wouldn't touch us at the moment.0
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