Loan now, mortgage later

[JamesDuncan]

Hello all,

I need some advice and education on my current situation. I have found a property that I like and I would be a first-time buyer. I have asked if my uncle if he can give me a personal loan through his business which he said is fine but I would have to pay 3% on the loan every year but, if I pay it back early the lower the percentage to be paid back. This would allow my to do work on the property that needs doing and then after a year or maybe earlier I would be paying the loan back plus the 3%. Now, my first question is how would this work? Would I remortgage the property and be able to give him the full amount through that?

Kind Regards,
James,

 

[PostBrexitInvestor]

Hi James,

That all sounds very interesting!

A few questions:-

• How are you funding the mortgage deposit
• How much is the loan
• What is the value of the property now
• Cost of work on property
• Value of property after additional work

This will help us all get a clearer picture of the scenario.

 

[kate1]

If you want loan, then you always remember to apply for IVA when you will take a loan. This agreement will help you in future. It is beneficial for repaying the loan.

 

[diyhelp]

If you think the work on the property will signficiantly boost the value then there is scope to take the loan, do the work and then remortgage, paying off the loan in full. What is your backup plan? Simply repay the loan (and mortgage) from rental income?

 

[realdeals]

Are you looking to buy, redevelop and then flip the property? Have you a backup plan incase the markets remain subdued for any great length of time?

 

[Joshua Baines]

If you are planning on remortgaging the property make sure you are confident on the Market Value of the property, this can be done using sites like rightmove, mouseprice, and land-in-sight.
Good luck and i hope this helps

 

[Longterminvestor]

Did you go ahead with the purchase? If not there is every chance that you will be able to shave something off the price when the markets return to "normal". Maybe hold off a little to see what happens?