I need €100k for 6 to 9 months.

BnA

I need some creative thinking on this....

Myself and my wife have an asset (A house that is 75% finished) worth €300k. We owe nothing on it. We have got it this far on money had from the sale of our last house a few years ago. The site is on my parents land so it cost us nothing.

I have a SH*T credit history. I set up a business a few years ago and went about 2 years without getting paid. Business is up and running now and all is well, but I have a poor history from mising repayments etc at the time.

However, what is really killing me is a term loan that I had. It went a few payments in arrerrs 2 years ago and when I got money, I paid off a lump sum towards it. I paid off another lump sum at the start of this year and I thought I was ok untill the start of next year. However, it turns out it is 7 payments in arrerrs now. The bank had been sending letters to our old address (the house we sold 2 years ago). Now, I know it is completely my own fault. I should have checked up on it and just paid it off, but I genuinely thought I was ok untill the end of the year. So now, apart from showing a poor history 2 years ago, my ICB report is showing a current loan in arreers. Obviously I am paying off the loan straight away (It is only €3k) but it is going to take time for that to whittle down through my icb report.

In 6 months time I will be able to get a mortgage on the house because my credit history will have cleared suffiently.

However, in the meantime, I need 100k to finish the house because

a) We want to move in

and

b) I will only get that mortgage in 6 months on a finished house, not on a half built one.

I am hoping I can muster up 20k to 40k on a personal loan (my wifes). But I would still need a lot more. The only options I can think of are :

1) Ask a firend to get a personal loan for me. At the moment, this is the best I can think of. The friend is my business partner for a few years and I helped him out in the past, but still, I'm not sure if I want to go this way.

2) Ask my (or my wife's) parents to help me out. I am not sure what kind of money they could get from the bank as they are not young. Anyway, not really a favoured option. They are a different generation to me and would worry about things like that so I'm not mad about the idea. To be completely honest, I don't think I would do it.

Has anyone got any other ideas. Ideally, I would like to get some kind of "Bridging Loan" for 6 months, but my sheeet credit history is killing me here. Have I any way of doing this, where some institution could take the house as collateral.

Thanks in advance for any suggestions

dotsman

BnA wrote: »

In 6 months time I will be able to get a mortgage on the house because my credit history will have cleared suffiently.

I'm not quite sure what you mean by this. Your ICB record will take at least 5 years to clear, and your record with the bank possibly a lot longer.

I also don't understand what you mean by getting a mortgage once the house is complete. By that stage what would you need to borrow the money for? Under normal circumstances, the purpose of a mortgage is to borrow money to pay for a property with the loan secured on that property. Until recently, many banks would lend you the money under "equity release" (ie borrow money for another purpose. but secure it against your home), but with the current recession, along with your past history, this may prove difficult.

Back to your question, I'm afraid I've no good answer! Have you even tried your bank (or another bank) to see if you can borrow the remaining costs? Banks have no problem lending for self-builds. They are more complicated than buying a pre-built house, but the fact that it is already 75% complete should take care of most of those complications.

craichoe

I believe he's trying to secure a loan of 100k against the Property hes building for the business.

OP you have two problems with that,

1. You say your house is worth 300k but the house is only worth what someone will pay for it.

2. The bank will be alot less likely to give out a 100k loan with your history, the other poster is right i believe, it would take 5 years to clear the history.

BnA

dotsman & craichoe

Thanks for the replies.

Just to answer yeir queries.

I need the €100k to finish the house. It is not for the business.

The reason I only need it for 6 months is because, in 6 months I will be able to get a mortgage. I know my Credit History takes 5 years to clear fully, but the mortgage company I have been applying to told me that if I show 6 months of clear history, because of my wife's good history and my low Loan to Value ratio, they will be able to give me the mortgage then. Obviously, I will be paying a sh*t rate because of my credit history, but I can put up with that for a few years.

I am being very conservative valuing the house at €300k. No point in over estimating it here to get advice that is then not relevant. It is a 3k Square Foot house on a one acre site looking out over Lough Derg. Similar houses were selling 2 years ago for €500k plus. They are being advertised now for €400 to €450k. The €300k figure I have used is extremely conservative.

I have since managed to round up around 40k. I could take 20k out of the business temporairly for a few months and a friend can loan me anoher €20k.

Is there any way that my wife would be allowed to go for a mortgage on her own ?

Thanks again for the replies and any other thoughts / ideas would be welcome.

Bluehair

While it's not answering the actual question (how to get the money) I'd urge caution in this situation.

Six months is really not a lot of time in the grand scheme of things and given it's all short term financing you're trying to arrange in the mean-time it would seem you're going to be paying over the odds just for the pleasure of moving in a few months early.

It's not exactly the prudent decision given the current economic climate.

Seriously just get your head down and focus on the business for the next six month and then look at the mortgage situation again.

stepbar

Lets say you get the 100k you need from friends etc.

What are you going to say to the bank when you want to release equity?

BnA

Bluehair wrote: »

While it's not answering the actual question (how to get the money) I'd urge caution in this situation.

Six months is really not a lot of time in the grand scheme of things and given it's all short term financing you're trying to arrange in the mean-time it would seem you're going to be paying over the odds just for the pleasure of moving in a few months early.

It's not exactly the prudent decision given the current economic climate.

Seriously just get your head down and focus on the business for the next six month and then look at the mortgage situation again.

Thanks for your input Bluehair.

You see the problem is, that because of my history, I am limited to only one company who will lend to me. And they don't do stage payments on self builds. So they will not give me money to finish the house in 6 months. They will only give me money in 6 months on a house that an engineer or a valuer signs off as being finished.

Even if I don't actually get the house to the level where I would be happy to move in (with 3 small kids) I would still need to get at least 60k to 70k to get it to a level where it is technically finished.

stepbar wrote: »

Lets say you get the 100k you need from friends etc.

What are you going to say to the bank when you want to release equity?

Thanks stepbar

I will tell them the truth. They suggested it to me themselves that I could try get a loan from family members to finish it.

trad

Again this recession is over how many people will have a clear credit history? The banks are getting a second chance getting bailed out so maybe they should afford us the same courtesy.

chris85

if this current loan that is showing a bad credit history is there clear it down to zero and they have to put a paid status on the ICB, this will be a lot better for credit purposes... any previous bad credit loans ensure they are paid fully and they will not be outstanding on ICB.. they will show as paid.

BnA

chris85 wrote: »

if this current loan that is showing a bad credit history is there clear it down to zero and they have to put a paid status on the ICB, this will be a lot better for credit purposes... any previous bad credit loans ensure they are paid fully and they will not be outstanding on ICB.. they will show as paid.

Well that is done as of yesterday anyway. I think it takes a few weeks to filter through to the ICB. They just get monthly updates.

I am still trying a few other options.

I sure as hell won't give up.

Toots

trad wrote: »

Again this recession is over how many people will have a clear credit history? The banks are getting a second chance getting bailed out so maybe they should afford us the same courtesy.

*Sigh* it's statements like that that really grind my gears! As I've said before in many posts, banks aren't getting free money out of this, they have to pay a fortune for the privilege. Part of the conditions of the recapitalisation is that the banks adjust their lending criteria so that the mistakes of the past aren't repeated ie: giving loans to anyone and everyone.

BnA

Toots and Trad. Not at all helpful. Sod off

chris85

BnA wrote: »

Chris & Toots. I am looking for serious advice here that is extremely important to me. If ye want to bicker, open yeir own thread.

hold on, we and toots aint bickering..

i gave practical advice over ICB listings and toots was giving sound financial advice over lending criteria. the banks are not going to loosen there lending criteria just because lots of people have got bad credit rating ratings... they are being more strict now as is very obvious. they have written off so much debt and dont want this happening again.

sorry if the advice isnt what you want to hear...

BnA

Sorry Chris. I quoted the wrong post. I meant that comment for Trad and Toots, not you.

trad

BnA wrote: »

Toots and Trad. Not at all helpful. Sod off

I was merely making the point that the banks have made mistakes , the developers have made mistakes and borrow have made mistakes, the banks are being absolved of their sins, they are not getting free money, and a lot of us, me included, will have a tarnished credit history when this is all over. If a significant number of people have a bad credit history who are the banks going to lend to.

If you want patronising advice pay your accountant, this is a forum and we are all entitled to our opinion whether you want to hear it or not.


I do hope you can resolve your predicament, me, I'm off to sign on for the first time in my life.

Toots

BnA wrote: »

Toots and Trad. Not at all helpful. Sod off

BnA. Not at all polite. Infracted. Behave.

BnA

Toots* wrote: »

BnA. Not at all polite. Infracted. Behave.

Let me put it in a more polite way so for you toots

You waded into this thread with a rigmarole about how tough things are for the banks which was not at all related to the subject of the thread and was most unhelpful.

I particularly did not like your nasty little dig about how banks will no longer be "giving loans to anyone and everyone."

Toots

BnA wrote: »

Let me put it in a more polite way so for you toots

You waded into this thread with a rigmarole about how tough things are for the banks which was not at all related to the subject of the thread and was most unhelpful.

I particularly did not like your nasty little dig about how banks will no longer be "giving loans to anyone and everyone."

BnA, I responded to a post you made stating that you felt that the banks should be more accommodating to customers since the recapitalisation, so yes, it was related to the thread. I simply pointed out that just because the banks have been recapitalised/bailed out/whatever you want to call it, doesn't mean that the banks should be more lax in their lending policies. You seem to be reading far too much into my post if you think I was having a 'nasty little dig' at you.

I should also remind you that if you have an issue with a post, you should use the 'Report Post' function, not respond on thread by telling people to sod off. Similarly, if you have an issue with a moderator's actions, you can PM them or one of their Co-mods.