Advice for those buying new vans with mortgage

[Skyway]

Honestly wish I hadn’t posted this now! Jim can you possibly delete please?

this was mainly to advise anyone is adding a bit to a mortgage to be careful due to the delays.

but for info we’re both under 40 and have put a lot down over the years towards the house . We like to go away and normally spend time camping and abroad. Has made us both want to have something to do at weekends with covid around
adding a small bit that is so much cheaper than the loan interest. Minimum payments if we sell after a year we get the money back and pay of mortgage again.

Well do it not bad idea long time dead
Your money you choice
I would and have loads of time on property

 

[donnkim]

We had a similar problem waiting for a sale to go through which took longer than we expected. The dealer allowed us to put another £2,000 deposit to extend it for another 6 weeks. Might help.

 

[Daniel. M]

If you are worried about your deposit, ask to take a loan provided by the dealer, this then becomes a linked transaction, and governed by the consumer credit act, they have to legally refund your deposit, that is enshrined in law

 

[royw]

I think there is probably a lot of people on the forum who are of the older generation ( i am not quite there) but it was instilled into that generation to only purchase with cash other than a mortgage for your home and live for tomorrow. I have always been the same but when you consider the changes in the world this last 6 months or so you have to consider live for now as a viable way to live, also fiscally if you have a good rate on the morgage and frredom to overpy it could actually be the cheapest way to buy. We all have to be that little less judgmental these days ...

 

[Minxy]

Compared to taking out a 'Black Horse' loan at extortionate rates using equity in your home, so long as it doesn't cost more with all the fees etc, is the better option if you need the cash for something. Unfortunately as with lots of things like this the expected time to turn stuff around can often be delayed and in these unusual times I'm not surprised that it is taking longer than normal but certainly a good 'heads-up' for others contemplating doing this.

We re-mortgaged our home to buy a second one which we intended to move to after a few months when our existing one sold ... this was 14 years ago and we're still in our original home with the other rented out! We are fortunate that our rate is not 0.74% above base, so only 0.84% now, well under £100 a month (on a £109,000 mortgage), the mortgage itself was to be paid off from the sale of the one of the properties however due to CV etc our intention to sell either has been scuppered so we are now in the unenviable position of having our mortgage due next April without having sufficient funds to pay it off in full. Bummer!

Fortunately it's not all doom and gloom - we've been in touch with our mortgage provide a couple of times but due to the time left before the mortgage is due we were too 'early' to sort anything, however today I've spoken to a chap there who confirmed that due to our having 2 or 3 'solutions' we are likely to be able to get a 6-12 month initial extension on our existing mortgage which will give us time to either sell one of the properties, or save up enough to pay off most, if not all, of the mortgage at the end of next year using the income we'll be getting and existing savings (locked away in Bonds etc). One good thing is that this won't have any effect on our credit record (which is excellent) and the interest rate be the same we are paying now.

So ... back to the OP ... thanks for the warning but please ensure that you have done your calculations and consideration of the 'future' repayment of the mortgage and what you'll do if things suddenly change out of all recognition to that which you expect, as they have for us.

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[Figaro]

James-Alex
Speak with your lender, they usually have a panel of valuers they can use, ask them to find out if any can do it quicker

 

[Wh05apk]

I'm a mortgage broker, and confirm the op's findings, the current situation is that most lenders still have half of their staff working from home, and since lockdown it seems everyone wants to move, we are about 60% up on last year, and struggling, lenders are being more picky which is introducing delays, we normally would have got offers out in 7-10 days, now it is probably 4-6weeks.

Speaking to solicitors, they are also struggling, again many still working remotely, and again they are massively up on volumes, as a result many are now refusing new business.

Mortgage rates recently have soared fit higher loan to values, as lenders are trying to turn business away, but it's not working, as everyone else is pricing upwards as well.

Having said all this, today we had a mortgage offer out within an hour, the lender did a desktop valuation, and auto verified income with hmrc.

Lenders generally will allow capital raising for almost any legal purpose, and with current rates of less than 2% for a 5 year fixed rate, can be a very cheap form of finance (you don't have to take the additional borrowing over the same term of the mortgage)

 

[Figaro]

the lender did a desktop valuation

That sounds like the old days when your building society manager (where are they now) took a drive past on his way home in his Rover P6 then rubber stamped the mortgage offer next morning.

Ahh, those were the days.

 

[thebriars]

Its very well worth while taking out a loan with, say, Black Horse in any case. There are plenty of horror stories out there about faulty new motorhomes, and the difficulties of getting a resolution. If its on finance, then the finance company own it and they will sort it out.

That's what I do every time now, and if the van is fine pay the loan off after a few months. Black Horse make this very easy.

 

[Clipgate]

Money lenders are facing an obvious negative equity situation shortly plus negative interest rates, thus the cautious approach.
The BOE wrote early this week asking banks if they were prepared for negative interest rates. Thus it is interesting times.
It's quite amusing watching the still continued conspicuous consumption in the high street, some may suggest no consumption no economy, well we will may well find out in the new year the outcomes of various theories, as yet untested.

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[Rapido925M]

We were brought up to "neither a borrower nor a lender be" (except for a mortgage, of course).
But we bought the MH by extending the mortgage on the house at 0.5% above BOE (amounting to 1.25%) and we had quite a tidy sum left over. This we were able to invest with Santander current accounts paying 3% such that the interest on £60k covered the mortgage interest on £120k AND give us a bit extra cash!

When the mortgage term ended I asked if we could extend it but that was refused.

Gordon

 

[SpeedyDux]

My previous Flex Mortgage allowed me to draw down the overpayments on short notice without any penalty. I used some of that overpayment to put towards the purchase of my first campervan. As soon as I had enough in the current account to make another lump sum overpayment I paid off what had been effectively a loan for the campervan.

Are Flex Mortgages still available? It is an excellent concept.

 

[Pirahna]

Why would anybody want to re-mortgage a house to buy a depreciating asset??

 

[chaser]

Why would anybody want to re-mortgage a house to buy a depreciating asset??

Quite, but I didn't like to say

 

[2x2camper]

Why would anybody want to re-mortgage a house to buy a depreciating asset??

Because it can be a cheap source of finance.

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[Spriddler]

Why would anybody want to re-mortgage a house to buy a depreciating asset??

Enjoyment, adventure, independent travelling?

Goodness knows why I spent money on a bottle of wine which was eventually depreciated down the loo when I could've put it towards paying off a mortgage.

 

[Coolcats]

Honestly wish I hadn’t posted this now! Jim can you possibly delete please?

this was mainly to advise anyone is adding a bit to a mortgage to be careful due to the delays.

but for info we’re both under 40 and have put a lot down over the years towards the house . We like to go away and normally spend time camping and abroad. Has made us both want to have something to do at weekends with covid around
adding a small bit that is so much cheaper than the loan interest. Minimum payments if we sell after a year we get the money back and pay of mortgage again.

James,

Your money your choice, add to that that some do not make it to 40 /50 /60 with everything being equal go for it don't wait another 20 odd years retirement will be a long way off and who knows how our bodies will be in years to come. If you don't do it now, then when?

Myself and the wife have travelled extensively and there were times when we were younger when we made decisions such as do we have carpets and decorate the bedroom or do we go to Canada.....Canada won, etc etc...the carpets came a year or two later, various career opportunities came along now I have some vehicles people here may describe as toys and a waste of money, we still travel, the house is paid for and well maintained but if I was in your position and not too worried about finance and with interest rates as they are why not ? go and have some fun with a MoHo.

 

[The Wino]

Its very well worth while taking out a loan with, say, Black Horse in any case. There are plenty of horror stories out there about faulty new motorhomes, and the difficulties of getting a resolution. If its on finance, then the finance company own it and they will sort it out.

That's what I do every time now, and if the van is fine pay the loan off after a few months. Black Horse make this very easy.

But if the op is taking out a new mortgage deal anyway they will be borrowing an extra lot they don't need. We had to buy a car once on finance as ours broke down on Christmas Day and we were driving to France skiing the next day that was a Bank holiday and weekend the previous ones gearbox was shot so it was buy a car or not go there were no rental ones available. The dealers demo had tax on it so thats what we bought the finance company were very reluctant to accept when we paid off a couple of weeks later.

 

[Wh05apk]

Why would anybody want to re-mortgage a house to buy a depreciating asset??

Because generally mortgages are the cheapest form of borrowing, with interest rates from just over 1%, just because its a mortgage doesnt mean it has to be over 25 years, you can take over a much shorter term of 5 years or so if you want.

 

[Otter Spotter]

Although all the signs are that this will not happen, if interest rates started to rise in the future, many people could find themselves really struggling.

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[Podney]

That sounds like the old days when your building society manager (where are they now) took a drive past on his way home in his Rover P6 then rubber stamped the mortgage offer next morning.

Ahh, those were the days.

Those were also the days when your employer could confirm your salary to the lender and add a couple of thousand to the figure,so that you could borrow more. That was in the days of high inflation when you pretty much new your salary was going up significantly every year.

I remember it very well,but it wasn’t a bed of roses when your mortgage interest rate shot up to 15%,was it.

 

[Coolcats]

Although all the signs are that this will not happen, if interest rates started to rise in the future, many people could find themselves really struggling.

They are currently falling and any rise will be. Long way off

 

[thebriars]

But if the op is taking out a new mortgage deal anyway they will be borrowing an extra lot they don't need. We had to buy a car once on finance as ours broke down on Christmas Day and we were driving to France skiing the next day that was a Bank holiday and weekend the previous ones gearbox was shot so it was buy a car or not go there were no rental ones available. The dealers demo had tax on it so thats what we bought the finance company were very reluctant to accept when we paid off a couple of weeks later.

I've used Black Horse several times, some of the cars/vans I've bought I've used them as there have been better deals if you have finance. Never had the slightest problem paying off the loans.

 

[SpeedyDux]

They are currently falling and any rise will be. Long way off

I am not convinced that the central banks can manipulate the financial markets indefinitely.

When the Invisible Bond Vigilantes strike it will come as a big surprise. IRs will rise rapidly. The UK government (and others) will default. Again.

 

[James-Alex]

Cheers for all replies guys and girls. As I said it was just advise to anyone wanting to get funds and to advise of delays currently. The rate we have got is far better than any finance and as it’s spread out over so long it’s better for us. Most lenders for finance are 8-10 years max which makes the repayments a lot more. Fortunately for us we have paid of inheritance to the mortgage and not wasted anything, makes a better situation for us both. At the time of getting inheritance moho wasn’t even in the picture.
We will be putting are foreign holiday pot into mortgage whilst we use it and should be cleared within a couple of years

hope you’ve all had a great day and enjoy your weekend

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[Trev45]

Those were also the days when your employer could confirm your salary to the lender and add a couple of thousand to the figure,so that you could borrow more. That was in the days of high inflation when you pretty much new your salary was going up significantly every year.

I remember it very well,but it wasn’t a bed of roses when your mortgage interest rate shot up to 15%,was it.

I remember those days my mortgage with Midland Bank in March 1990 was at 15.40% . It did go down to 14.7% in November the same year.

 

[The Wino]

I remember those days my mortgage with Midland Bank in March 1990 was at 15.40% . It did go down to 14.7% in November the same year.

I remember those days too and we had a business loan on variable rate too. But didn't it go down quickly in real terms wage inflation was pretty high so the repayments probably were going down by 5to10% a year as a proportion of wages or if you increased payments so it was the same % of wages you would be payed off in 10years.

 

[Wack]

Although all the signs are that this will not happen, if interest rates started to rise in the future, many people could find themselves really struggling.

that’s never going to happen , the Bank of England is preparing banks for negative rates , the days of the over 70s living off the interest on their savings is well over , it’s all about cheap finance to keep the economy going these days, spend spend spend

 

[Wh05apk]

that’s never going to happen , the Bank of England is preparing banks for negative rates , the days of the over 70s living off the interest on their savings is well over , it’s all about cheap finance to keep the economy going these days, spend spend spend

It will happen it's just a matter of time, the likelihood is that bank of England will trh to keep rates low, however lenders rates have little to do with BOE rates, look at the current situation, rates are soaring due to supply and demand. Long term once things settle, moneymarket rates dictate lenders rates, what will happen when we crash out of Europe with a no deal? as it seems Boris is determined to do? If UK plc is deemed high risk, rates could rise.
I think it will be a long time before we see BOE rates of 5-6% again, but I wouldn't be surprised if we get back to 2-3% within a couple of years.

 

[Boris7]

Back to the original issue, if the dealer will not wait I would look at finding a family member or friend to bridge the problem.

A member of our family had the same issue when buying a house, so we all put in enough to pay for the house while they got the financing in place.

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