To wonder why it is so difficult to borrow money to buy a house

[Stressmode]

So I want to buy a house for 225k. I am 25k short. I can’t get a mortgage on the house because it needs restoration. I am capable of doing the restoration. How can I borrow 25k? I can easily make the repayments from my income. I could get a personal loan… but they all specify that they are not to be spent on property.

it seems batshit crazy that I could take out the personal loan and spend it on holidays!

Left field thought. Borrow the 25 grand. Give it to a trusted relative. Relative then gives you a personal loan of 25 grand.
That's where your extra money came from, a relative.
Would this work?

If you are 25k short how are you going to fund the restoration?

They don’t actually check or care what you spend it on, although I recently hit a personal loan and was told by multiple companies they only loan for a car or house improvements, particularly as £25k is very much at the upper end of the value of a person loan

A £25K loan will affect your ability to borrow for the mortgage, so your offer there would be reduced as well.

How will you fund a renovation if you're already £25k short?

Isnt OP saying she’ll do the restoration herself?

she doesn’t need a mortgage, the house isn’t mortgageable. She just wants to borrow £25k to complete the purachse of £225k. Presumably £200k is cash

Exactly! It is an old house and I have the skills and qualifications to do the work myself. I will also have an income from my actual job that will pay the loan off and pay for materials and the restoration.

You fancy a new car, don't you?

Oh yeah OP. A new car would be nice wouldn’t it

Have you actually spoken to potential lenders about this? I suspect the condition of not being used to buy property is in the context of adding it on to mortgage borrowings, taking you beyond the lending limits of loan to value and/or ability to repay. Your situation that is different - it would not over expose you to any more debt than if you used the cash to buy a car or go on a holiday. So maybe try a discussion?

Bridging loan. Do the renovations. Remortgage once renovated and pay off the bridge.

There is no bridging loan it’s a cash purchase 😂

there is no mortgage it says in the OP 😭

Yes, and materials still cost a fortune...

But if OP borrows now, their mortgage offer will be affected, so they'll still be short.

There is no mortgage 😭 third times a charm

im sure OP is capable of costing up how she’ll pay for materials, not sure why you’d assume she can’t.

She’s buying cash….

Just say it’s for a car, or a new kitchen, or school fees. No-one will check.

Definitely a 'car' purchase.

New car, debt consolidation, new kitchen, buying a boat. I don't think a lender would check. They just want your business.

Well yes, the source of your money will be checked when you buy a property and it may cause problems if you are not telling truth about what the loan is for. I'm in the process of buying a house right now and am having to go through numerous checks of my bank accounts, sources of funding (loans, gifts etc) - presumably for money laundering purposes.

This is really stretching. The check will be with solicitors, an anti fraud check. OP simply supplies proof of funds.

its none of the solicitors concern that OP had cash for a house then took out a car loan. Many people have personal loans.

It’s so a wedding.

But she’s not using the loan for the purchase. She’s buying cash and will be subject to the source of the cash being checked anyway. She completes, having had all the checks ok’d then realises she needs a new car and a new kitchen. Job done.

I'd do this!

Can you tell the seller you can buy if fur $25k less?

Surely if you are struggling to finance it so would others?

Car or wedding!!!

well others would just have the extra £25k cash surely? Why would they not have that because OP doesn’t?