Topping up Mortgage with a personal loan to borrow more
Discussion
Just a quick question here:
I am looking for a mortgage, been to an Independent Financial Advisor, got an affordability figure, which is about 20k short of what I really need, so pretty much accepted his calculations.
One of my mates has said if I went directly to a bank, they would do the mortgage then add a personal loan for the shortfall on top and stick it through for the full amount.
My understanding of MMR and affordability makes me think that this is not possible without some bending of the affordability rules.
I thought a £200 - £300 credit commitment would hammer down your affordability even more, and be counterproductive.
Has anyone had any experience of this?
I am looking for a mortgage, been to an Independent Financial Advisor, got an affordability figure, which is about 20k short of what I really need, so pretty much accepted his calculations.
One of my mates has said if I went directly to a bank, they would do the mortgage then add a personal loan for the shortfall on top and stick it through for the full amount.
My understanding of MMR and affordability makes me think that this is not possible without some bending of the affordability rules.
I thought a £200 - £300 credit commitment would hammer down your affordability even more, and be counterproductive.
Has anyone had any experience of this?
Sarnie said:
Try a different advisor.............. 
Are there specific reasons why your lending figure is £20k short?
Just affordability really (5x+ salary), he thought I may get up to £140k, but after putting through calculations with a couple of lenders he got back a figure of £129,500 from both. So it is the maximum affordability really, nothing else. It is just properties are now £20k above my budget anyway (not that there are any around at the moment at all).Are there specific reasons why your lending figure is £20k short?
I have put the idea on hold for a few months, bank some more deposit and see what happens election time. It just surprised me a bit when my mate said banks are putting through mortgages, with personal loans on top.
anonymous said:
[redacted]
Why did the lending drop from £140k to £129,500?Are you a FTB'er?
Are you/your IFA aware that a lot of lenders reduced the max income multiples for FTB'ers from 5x down to 4.5x income last week?
But not all of them!
And some lenders WILL accept part of your deposit being supplemented by a loan.............as long as the additional payments fit on affordability......but the reality is that if it fitted on affordability to do that, your income would be sufficient to secure sufficient mortgage lending without needing an additional loan....
Sarnie said:
Why did the lending drop from £140k to £129,500?
Are you a FTB'er?
Are you/your IFA aware that a lot of lenders reduced the max income multiples for FTB'ers from 5x down to 4.5x income last week?
But not all of them!
And some lenders WILL accept part of your deposit being supplemented by a loan.............as long as the additional payments fit on affordability......but the reality is that if it fitted on affordability to do that, your income would be sufficient to secure sufficient mortgage lending without needing an additional loan....
Yes I am an FTB'er.Are you a FTB'er?
Are you/your IFA aware that a lot of lenders reduced the max income multiples for FTB'ers from 5x down to 4.5x income last week?
But not all of them!
And some lenders WILL accept part of your deposit being supplemented by a loan.............as long as the additional payments fit on affordability......but the reality is that if it fitted on affordability to do that, your income would be sufficient to secure sufficient mortgage lending without needing an additional loan....
I think his affordability calcs in January were a bit off. He did an affordability calculation rather than approach lenders initially. When he checked about 2 weeks ago (I think with Woolwich & Santander), they came back less at the £129,500.
He did say some were going to be reigning back their salary multiples in coming months. I was aware that there was a limit of 15% of total lending being above 4.75x
As you say about the loan part, when my mate said about it, I could only think it would be to supplement a deposit (perhaps to reduce the LTV to a lower rate), as if you were up to your stops on the salary multiple or affordability, then a Personal Loan is only going to hit what you can borrow. What you have said confirms my thinking. I couldn't see any bank stuffing a personal loan through on the back of a mortgage to somehow get around MMR affordability.
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