Personal loan for house purchase?

[breezyday]

Is it possible to purchase a house using mostly cash and a small personal loan? We are just short on being able to buy a home and for many reasons it seems easier to look at applying for a personal loan. Is this possible? What are the pros / cons? Thanks

I'm frustrated on your behalf at these replies OP!

I think you should speak to a financial advisor first and foremost.

@Hoppinggreen

Am I the only one reading here that OP doesn’t need a mortgage for the majority of the money? They say they have cash but are short £30k. In which case it’s nobody’s business where these additional funds come from. Lenders might not want to lend for the purposes of a house purchase if it’s a personal loan but you could say home renovations or similar and the lender would have no idea what you actually spend it on. The interest rate will probably be higher than a mortgage though

Yes, I'm reading it the same way.

OP is considering personal loan instead of a mortgage, not as well as.

I took out a repayment mortgage for £25k over 10 years. Financial advisor recommended that route rather than personal loan.

Yes you can. We did it. Cash buyers but needed a bit more to have some spare, so took out a loan after our offer was accepted. Unsecured personal loan seem to go up to £14999, that’s what we took out - in my sole name. It’s unsecured- you can use it for anything you want. As long as you can both get one, you can cover the amount you’re looking for.

Other than a lower interest rate, the main potential advantage of a mortgage that I can see, is having cash flow available to help finance aspects of setting up your new self-employments. Only you will know if that is relevant or not really. And once you've bought the property you would be able to get a loan against it if necessary anyway. I'd wonder about getting an offset loan for more than you need and keeping most of the cash in the offset account untiIl everything's settled in you new lives.

If there is enough certainty in everything else - which I can imagine being the case in some lines of work - then yes, a shorter term personal loan could well be the realistic option. Good luck however you swing it!

Thanks all just catching up on your posts now. We don't need a mortgage we have mostly cash to buy but we are just short £20-£30k which is why we are thing about personal loan to fund the shortfall.

Yes go for it! The estate agent/lawyer doesnt need to know where it came from.

We did similar for a house purchase 10 years ago - we had an inheritance and so had 95% of the cost of the house and needed something like 15k so we got interest free cash advances on our credit cards which after two years we converted into a personal loan.

All this about the solicitor not needing to know where the funds are from……THEY DO. They are obliged to verify it for financial crime reasons.

If you have to borrow to buy then you do need a mortgage

@TheBitchOfTheVicar

If you have to borrow to buy then you do need a mortgage

That's really not true. If the OP wants to take out a personal loan and then purchase the entire property in cash, that's completely up to her. She may have to prove source of funds to her solicitor to satisfy anti money laundering regs, but as she isn't looking to borrow any additional money in the form of a mortgage to purchase the property, things like affordability aren't even a consideration.