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!

There's a reason why they don't want to provide the extra money in your circumstances...it's your circumstances. Remember the credit crunch 2008? I was working for an insurance company who's house insurance was sold by mortgage lenders to their customers...Lehman brothers' company in the UK was one of mine...as were a few other sub prime lenders...pumping money to people at 10 or 15 times their income.

yes you can do the renovation now, yes you're earning...but have you seen the news? Trump, tariffs, stock market, trade war....what would you do if you lose your job? Break a leg? And the housing market slides. How do you pay off a £200k mortgage when the house is worth £175?

I’d say it’s for a new kitchen personally. Presumably you will need a new kitchen at some point, given it sounds like a bit of a project. So it’s not really untrue.

She is using the loan for the purachse tbf. She’s £25k short of the purchase price.

it won’t impact the anti fraud checks though

STILL NO MORTGAGE 😂😂

But she will still have to for materials

would you be able to get the 25k loan for a holiday after you had took on the mortgage though? Isn’t it a case you can have one because you don’t have the other ?

She is paying for materials out of her monthly income

Wait, you can't get a £25k mortgage on a £225000 house because it needs restoration?

that doesn't add up. Unless mortgage rules have gone madder in the last two years - I appreciate they might have. How many mortgage brokers have you asked?

OP said it’s not mortgageable. Quite common if the house needs extension renovation

Ahhh sorry miss read....what a prat!

Personal loan then is the only way forward. Sadly op may have to be "economic" with the trurth...but it's £25k so I'd personally take the risk

Me too. Personally when I rang to take out a personal loan they said “you know we only do personal loans for cars or house renovations don’t you? So which one are you doing?” 😂 they don’t care

Get a self build mortgage. Loads of people borrow money to build or renovate houses - you just can’t borrow from a high street lender, that’s all.

But there's specialist mortgage companies for this. I thought that was their reason for existing.

Can’t you just say it’s for an extension? Conservatory? New kitchen?

OP, you’re going on a once in a lifetime cruise.

If it’s not mortgageable its not mortgageable. I assume OP has had a quick google and tried the few lenders who specialise in this. Besides why even do that when you can get a personal loan?

Ecological building society used to lend on a pile of bricks!

I didn't want to assume.

There's plenty of posts on here from people who have only tried High Street lenders and haven't even considered going trying mortgage brokers, etc etc

So it seemed worth mentioning

last move, I got in a bizarre conversation with a High Street lender who wasn't even familiar with let to buy mortgages. Tried to tell me they didn't exist. I just thought I'd try them first because that's where my initial mortgage was. This was a call with a mortgage advisor!!

Anyway, if OP has tried everything then I guess personal loan is the answer.

The solicitors WILL check the source of funds as part of the money laundering laws. They need to record evidence of where the funds have come from to ensure that they're legal otherwise they risk prosecution.

If its not mortgageable then its not livable and its not a small amount of work. If you cant afford the extra £25k on the purchase price you cant afford the renovation either.

The poster means the lender for the personal loan won’t check what it’s spent on

Why are you saying this? OP hasn’t asked whether she should buy the house. You don’t know anything about it. Utterly bizarre to blast in and tell her she can’t have the house 🤯

"Unmortgageable" e.g. no kitchen is a cascading thing. Lenders won't take it as security because if they repo and need to sell then many a buyer can't get a mortgage on it and they're limited to recouping money from cash buyers.

@AquaPeer Her finances have told her she can’t have the house, not me.
If a property isn’t eligible for a mortgage from basically all lenders then it’s pretty much condemned and the amount of work needed to make it habitable will be huge and extremely costly wherever you are in the country. It’s simply not the sort of renovation you can find from month to month with no large cash injection.

How on earth do you know? Why wouldn’t OP be capable of making that decision herself?

you know nothing about her, maybe OP is a builder. You have no idea how much needs doing, how much materials are needed or if OP needs to live in the house whilst she does it up. Bloody hell 😭