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!

How do I know? Because she’s literally posting about being £25k short. Have you read the thread? It’s the whole point!

No she’s posted very clearly to say she has the income and qualifications to do restoration herself. She HAS said this.

she is simply £25k short of cash for the purchase. This is easy for her to borrow and easy for her to repay. But strictly speaking, no personal loan provider will lend her the cash for this purpose. Which is what she’s expressing annoyance about.

thats what she’s posting about.

if she did just get a £25k mortgage you wouldn’t be saying she couldn’t afford it. What’s the difference?

Huh? Surely that means no people who take out a mortgage can afford to buy a house that needs renovating?

Yup, just super frustrating that I can borrow 25k in literally 3 clicks and no questions asked. I could spend that on cocaine and gin and no one would care. Just they won’t let me put it towards a house! The world is insane.

Honestly, how are they going to know what you spend it on? They also won’t care as long as you are meeting repayments.

Nah this is rubbish. It could simply be unmortgageable because it doesn't have what is deemed as a functioning kitchen - certainly doesn't have to be 'condemned!!'.

if there's no questions asked then why do you worry about it? Just get the loan.

When we bought our house, the only check into the source of our deposit was literally being asked where the money was coming from. 'Savings' was accepted as an answer. OP, I would just take a loan out for another reason and distribute it amongst savings accounts prior to the purchase.

Bridging loan?

I have no idea how deep they will dig down when they do the checks on the source of the money… and if that will alert the lender :(

I think a pp’s suggestion of a trusted friend or relative really could work. If they took out the loan, then gifted you the money, I don’t think there would be a problem putting towards the house. There would be tax on it, though, I think.

Ah I see. Maybe post on the legal or money sections here. Ask if mortgage lenders are alerted of any other loans you try to take out when you're applying.

That said, I know my buyer had to have some of his checks redone because he took so effing long to buy my flat!

It is fraud - you are not using for the loan for the purpose disclosed and for property which you say is an excluded use.

However, when Solicitors check where the money is coming from, from my experience you disclose it's from a personal loan, you show them the loan letter and the movement of money into your account. I've never been asked for the loan's terms & conditions or to sign any declaration that I have met the loans terms & conditions.

There is no mortgage needed - so no implications on reducing lending for a mortgage.

It’s not fraud..it would be a breach of the terms of the loan (presumably the remedy for which would be immediate recall but that’s unlikely if repayments are being made on time) but no one is being defrauded!

OP I would say it is to repay credit card debt and purchase of furniture. The effect is the same. Create debt on a 0% card if necessary, with all your day to day expenses, putting the equivalent into a savings account.

Sorry I haven’t read the replies but I don’t understand, I was looking at Tesco loans the other day (that go up to £25,000) and home improvements is one of the options?

Im confused then. I thought you were buying the house with existing cash. Do you not in fact have enough cash to buy it, hence the loan? I was under the impression you only needed the loan for the restoration? So you do need a mortgage?

In which case you need to go to a specialist mortgage provider - they do exist. Self builders use them.

The lender doing checks on the source of the money?
I thought the house was not able to have a mortgage taken on it?
Yes if you’re taking a mortgage and still 25k short the lender will absolutely be able to see that a substantial chunk of your deposit comes from a loan and you won’t be able to borrow the same amount.
They don’t need to dig that deep.

Omg how many times does it need to be said-no mortgage to be taken out, renovations to be done by OP. Only debt involved is the £25k personal loan needed to top up the OP’s cash for her to pay for the property purchase.

OP is the one who said they were worried the “source of the money” coming from a loan would alert the lender though.

So why isn’t she just getting a personal loan? Tesco do home improvements as a reason? I don’t understand this thread!

The loan isn’t for home improvements, it’s to purchase the house.

Not the lender, the solicitor (or estate agent) doing anti fraud checks. But it’ll be fine, this isn’t what they’re looking for. They’re looking for money laundering 😂

Oooh sorry, I thought it the renovations she mentioned. I understand the frustration now!

The OP said lender though.

This is an amazing thread!

The OP doesn't need a mortgage! SHE DOESN'T NEED A MORTGAGE.

SHE. DOESN'T. NEED. A. MORTGAGE.

She just needs a special kind of loan that can be used to purchase a property she can't quite afford, as personal loans don't allow this.

Therefore, it is agreed that her best solution is fraud.