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jamesduncan

Will this work? Mortgage advise

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Hi all,

I have recently found a property that I would like to purchase to live in but to a cash buyer and be more appealing to the seller my uncle said he could loan me the money but would need the money back into his business which I was planning to get a mortgage after 6 months - a year of having the property so I would only be paying 3% interest max on the loan.

Would I be able to then get a mortgage to pay off the loan he is giving me, if so how would this work? Should I be speaking to an advisor?

Thanks in advance,

James.

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Hi @jamesduncan

In theory, yes you should be able to remortgage the property and pull out up to 90% of the equity. Each lender has their own criteria for capital raising, with some being comfortable with any legal purpose.

Clearly, obtaining the mortgage would be dependant on your personal circumstances (Income/expenditure) and it will certainly be worth speaking with an adviser prior to purchasing the property, simply to ensure you have a suitable exit strategy. 

I hope this is helpful and please do let me know if you have any questions. Happy to assist you. 

Best regards 

Nathan Cole

 


Nathan Cole CII (MP)

Mortgage Consultant at Private Finance

Office: +44 (0)1743 211 855

Email: nathan.cole@privatefinance.co.uk

Website: www.privatefinance.co.uk

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It's not impossible. Though has some difficulties due to the funds being loaned. You should caution your uncle that it could well be longer than Six Months. Many mortgage lenders do not allow you to refinance within six months of purchase.


:wub: Get Mortgage Advice from my Team at Bespoke Finance on 08009202001 or email hello@bespokefinance.info 
:ph34r: 
Please don't take my messages on Property Hub as Personal Financial Advice, just a rambling guy passing time on a Coffee Break.
 

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32 minutes ago, Adam Hosker said:

It's not impossible. Though has some difficulties due to the funds being loaned. You should caution your uncle that it could well be longer than Six Months. Many mortgage lenders do not allow you to refinance within six months of purchase.

He does understand it would be longer than 6 months. I may just go down the route of mortgage anyway due to me actually wanting to live in it, just thought it would appeal to the seller as a cash buyer. 
 

Thanks for the reply.

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If there are other people in the wings, a cash purchase may be prudant or if you can get a significant discount. Otherwise its more hassle than its worth if you are going to end up with a mortgage anyway @jamesduncan

If you intend to live in the property. Remember to discuss it with an FCA Authorised Mortgage Adviser, that is Whole of Market. Such as the team at Bespoke Finance.


:wub: Get Mortgage Advice from my Team at Bespoke Finance on 08009202001 or email hello@bespokefinance.info 
:ph34r: 
Please don't take my messages on Property Hub as Personal Financial Advice, just a rambling guy passing time on a Coffee Break.
 

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7 hours ago, Adam Hosker said:

If there are other people in the wings, a cash purchase may be prudant or if you can get a significant discount. Otherwise its more hassle than its worth if you are going to end up with a mortgage anyway @jamesduncan

If you intend to live in the property. Remember to discuss it with an FCA Authorised Mortgage Adviser, that is Whole of Market. Such as the team at Bespoke Finance.

I think I shall be making an appointment with a mortgage advisor next week hopefully to get things going as I have a good deposit from inheritance so could get a mortgage then make an offer.

 

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I think the probalem would be the capital raising rules. If you want to borrow £100's of thousands of pounds the lender is going to need not only an explanation, but evidence of what that money is to be used for. I dont think "giving to my uncle" would be easy to get past an underwriter, but "giving to my uncles business" would definitely not be. Lenders hate lending for business purposes! Its probably doable, but from a lenders perspective, its very opaque and that will make them very nervous.

Perhaps consider your uncle going on the deeds too, and after a year you buy his share from him with a mortgage. Alternatively you could let your uncle buy the place, pay him some rent in the meantime and then let him sell it to you, you can even buy at a discount and some equity in the property can be a deposit. Search for Family Concessionary Purchase. Your uncle would need to seek specialist advice from both solicitors and tax advisors, but whilst there may be higher costs initially, their path to getting the funds back are probably much more predictable.

 


Stuart Phillips
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AALTO Mortgages Ltd

Independent, Whole of Market, BTL Specialist.

 

http://www.aaltomortgages.com
sales@aaltomortgages.com
0207 183 1101

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