Stamp duty shortfall

[waitingforever]

So all our mortgage and deposit in place but we are short on stamp duty. Has any one got any ideas like bridging loans, etc that they may have used to go through the purchase. We will be fine in few months it is just the initial shortfall. It will be shame for it to fall apart because of this.

It sounds like you are buying beyond your means if you don't have enough savings held back to even cover the stamp duty :(
I would suggest reducing your offer on the house you are buying ?

Ok thanks for that.

If any one has any other suggestions that will be great? No worries if not.

You won't be able to take on a bank loan or credit card debt as the mortgage company may then take this into account. All you could do is wait till you have saved up more, ask family to lend you the money or pull out of the sale.

I would not be impressed as a seller if you tried to get the price down as you had failed to prepare properly. I would most likely tell you the sale is off as you clearly can't afford it.

How much do you need?
Would anyone in the family be able to temporarily stump up the difference? And you pay them back in a month or 2?
Is there enough time to live exceptionally frugally until completion to reduce the shortfall?
Anything you can sell, allowing for decluttering before moving?

Trouble with borrowing anything from a bank / credit card before completion is the risk the bank issuing the mortgage might do a final check.

Good luck!

Pawn something ( jewellery, car etc)?

We missed this initially, but one of the first things our solicitor did was give an estimated total cost, which set us right. This was very early on, so not too committed at that point.

But yeah, fundamentally it means you missed a detail and as a result offered more than you can afford. There is no magic fix here, no "trick" to borrow more money without it costing more.

We were in same situation as we didn't realize stamp duty had to be paid straight away, we thought (I can't remember why!) that we had a month to pay. We applied for a loan online the night before we moved with a bank we'd borrowed from before and luckily it was approved immediately. This was about 9 years ago though.

Not sure how far off exchange you are but a colleague of mine recently told me they added their stamp duty to their mortgage amount. I didn't even realise this was possible. Could you go back to lender and increase your mortgage to cover this (not sure if all lenders do so but worth checking with your broker).

How much are we talking...?
Bank loan, credit card, family loan?

I assume you are at maximum mortgage? - Do have a real think about whether you are overstretching yourselves too far. No judgement, we've gone all in before, but be sure it's the right thing for you to take that risk now. Good luck!

Thanks. Good points to think about and will be looking at cutting down costs and selling what we don't need. Definitely car and few other. It is all in situation but worth it. The opportunity is good and the shortfall would be covered soon so it will be sad to let go at this point.
EMI is not an issue at all, nor is deposit it is just the stamp duty as stupidly we didn't account for it being so much.

Why should the seller pay for the buyers stamp duty obligation because they hadn't factored it in?

If the OP is buying beyond their means the correct answer is look at a cheaper house, not getting them to reduce their offer.

Not going to go to the seller. If it works it works if not then that's fine at least we tried. I am sure we won't be the first one trying our best. We have assets to liquidate so will start there first.

Sell a limb?

I guess you are talking from experience of having sold your brain long time back

How would this help? Say they have a 10% deposit, if they reduced their offer by 10k it’d only free up 1k cash.

How much are you needing? Is it proper bank loan territory or sell everything surplus to requirements.

@waitingforever

You just haven't borrowed enough! The full purchase price includes the tax. So can you extend the mortgage term and borrow more?

Depends how much you neeed.
if you can pay it back in a month or two can you live completely off credit card until then to free up cash?

or get your parents to live off your credit card and give you the cash for things?

@TizerorFizz from mortgage perspective, yes we can borrow more and we have the deposit to match the increased borrowed amount but our mortgage advisor said that the stamp duty can't be added to the mortgage. If it could it would solve all problems.

You just need to word it a bit differently.

Instead of increasing the mortgage to cover the stamp duty, you need to increase it as you need to borrow more due to having less cash deposit if that makes sense?

Can you reduce your deposit, use this for the duty and increase mortgage?

you can’t borrow by other means, so unless a family member will say they gifted it, it’s down to selling everything you have to make up the shortfall.

also remember solicitors fees, survey, and moving costs.

This. Our mortgage was 250, we took 282, as the duty was 32k at the time, we then paid the 32k from savings, or deposit.

Yes, you don't add the stamp duty onto the mortgage, you take it off the deposit.
Is your mortgage advisor saying that then you won't be able to get the loan?

We are going to be in a similar position I think, as our calculations hadn't factored in our buyers significantly reducing their offer post surveys. Think I'm going to have to go back to the mortgage company and ask for more as I don't want to dip into our emergency savings pots (and they're also tied up so hard to access at short notice). Or I'll ask my dad if he's feeling generous as he has loads of cash festering away in the bank but my step mother probably wouldn't be too happy about that.

Have you considered reducing your offer on your purchase ?
You have a very reasonable negotiation point as you have had to reduce your sale price ?