Acceptable reasons for further borrowing
Discussion
When you ask a lender for additional borrowing on an existing mortgage, why do they ask what it's for? I can maybe, but not even then, see why they care if you are doing it to pay off credit cards. Is it just a perfunctory question or do they care if I want to refurbish or buy a car or keep the money for a stock market crash or invest it in mentoring sugarbabies?
When I took out a loan they asked what i planned to do with the money - at the time it was to consolidate debt from credit cards tbh they never checked if that is what I did with the money.
Remortgage it probably depends on the funds involved - if for example you were only remortgaging for £20k to update your kitchen and bathroom for example - that adds asset value in there eyes. Same for extension etc.
If its to buy a car I guess that means they could turn around and say no easier.
Remortgage it probably depends on the funds involved - if for example you were only remortgaging for £20k to update your kitchen and bathroom for example - that adds asset value in there eyes. Same for extension etc.
If its to buy a car I guess that means they could turn around and say no easier.
Because risk...
They need to know their chances of getting their money back if it all goes wrong.
If you use it to start a business, there’s a chance you’ll fail and owe lots of other people money, decreasing their chances of getting full repayment.
If it’s just to build an extension, the risk is much lower.
They need to know their chances of getting their money back if it all goes wrong.
If you use it to start a business, there’s a chance you’ll fail and owe lots of other people money, decreasing their chances of getting full repayment.
If it’s just to build an extension, the risk is much lower.
Greshamst said:
Because risk...
They need to know their chances of getting their money back if it all goes wrong.
If you use it to start a business, there’s a chance you’ll fail and owe lots of other people money, decreasing their chances of getting full repayment.
If it’s just to build an extension, the risk is much lower.
^This.They need to know their chances of getting their money back if it all goes wrong.
If you use it to start a business, there’s a chance you’ll fail and owe lots of other people money, decreasing their chances of getting full repayment.
If it’s just to build an extension, the risk is much lower.
It's all about risk...........................
How is it about risk, though? If I can't pay, they get the house, whether I bought government bonds with it or threw it off the Queen Mary.
If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
montecristo said:
How is it about risk, though? If I can't pay, they get the house, whether I bought government bonds with it or threw it off the Queen Mary.
If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
Lenders do not want to have to repossess property. They aren't in business to do that........it's an extremely long, expensive, drawn out legal process.......even though you might think "Their money's safe so why do they care?".......they care because they don't want to go through the above.If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
A client setting up a business with funds secured against their own home is a risk taker.......the business may fail.......they are left evicting a family because of an applicant's poor business choices.
Pay off a tax bill...........applicant can't organise their finances sufficiently to pay their tax with secured lending against their house......whats going to happen next year? Same again?.............no thanks.
Client wants to extend their property to increase floor space and value........no problem.
As I said, it's all about risk............if I was sitting on a pot of money, I know which of the above clients I'd lend to, irrespective of what collateral I hold over them...
montecristo said:
How is it about risk, though? If I can't pay, they get the house, whether I bought government bonds with it or threw it off the Queen Mary.
If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
They do not want to take your house. They want to make a loan, receive the repayments precisely as agreed, and end the deal with both sides having stuck to all of the terms.If it is about risk, then presumably the better-credit, wealthier, higher equity people are allowed some uses that the proletariat are not allowed?
If they ever get to the stage of taking your house they have had to pay solicitors, and barristers. They have had to wait, argue, and take risks in the court.
The security is a final backstop to help them recover money from absolutely hopeless cases. Thinking that they will happily take an awful proposition on as one day they may break even after a court case is naive.
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