Add-on Mortgage

SillyBeans

Hi everyone. Looking for some advice.

I'm currently waiting for the bank to get back to me about a mortgage for my first house (scary!!). They've said they've spoken to the underwriters and don't see any issues so fingers crossed they approve it.

A family member gave me money to help with my deposit (my dream house came on the market so decided this was the best option as if I waited another year or so to save the rest of the deposit the house would be gone). Now obviously as far as the bank is concerned this money is a loan. However I fully intend to repay the person who gave it to me. I was wondering how likely it would be for the bank to give me say €25,000 extra to add onto my mortgage in a year or so if I told them it was for doing up the house? I would intend to use some of it for that reason but the rest I'd use to repay that 'gift'. I just thought it would be easier to manage it that way as obviously it would be spread over the term of the mortgage rather than me scrimping and saving to pay it back to my relative as quickly as possible. Is this just a crazy idea?

Thanks

athtrasna

Yes it is crazy. Over the lifetime of the mortgage you would be paying back multiples of that 25 k, making it very expensive.

You're also suggesting fraud by misrepresenting what the money would be used for (though unlikely to get it, they tend to seek quotes, tenders etc from you these days to release renovation money).

I'd really suggest trying to find another way OP

SillyBeans

Thanks for your reply. My relative is in no hurry for the money, I would just feel guilty spending money on anything else until it was paid back. The idea of adding it to the mortgage was because the repayments would increase by only a tiny amount each month and I wouldn't even notice it. I didn't realise they asked for quotes etc. Back to the drawing board!

whippet

SillyBeans wrote: »

Thanks for your reply. My relative is in no hurry for the money, I would just feel guilty spending money on anything else until it was paid back. The idea of adding it to the mortgage was because the repayments would increase by only a tiny amount each month and I wouldn't even notice it. I didn't realise they asked for quotes etc. Back to the drawing board!

also if you get a 'gift' of the money for the deposit the bank will usually insist on a letter from the person gifting the money confirming that they will not be seeking repayment of the gift and will not have any material interest in the property.

If you declare this money as a gift while it is a loan you are making a fraudulent declaration on your mortgage application - something that was prevalent during the bubble era and we all know the consequences of people making incorrect declarations on mortgage applications and the numbers now who can't meet their repayments

Gumbo

SillyBeans wrote: »

Hi everyone. Looking for some advice.

I'm currently waiting for the bank to get back to me about a mortgage for my first house (scary!!). They've said they've spoken to the underwriters and don't see any issues so fingers crossed they approve it.

A family member gave me money to help with my deposit (my dream house came on the market so decided this was the best option as if I waited another year or so to save the rest of the deposit the house would be gone). Now obviously as far as the bank is concerned this money is a loan. However I fully intend to repay the person who gave it to me. I was wondering how likely it would be for the bank to give me say €25,000 extra to add onto my mortgage in a year or so if I told them it was for doing up the house? I would intend to use some of it for that reason but the rest I'd use to repay that 'gift'. I just thought it would be easier to manage it that way as obviously it would be spread over the term of the mortgage rather than me scrimping and saving to pay it back to my relative as quickly as possible. Is this just a crazy idea?

Thanks

top up mortgage for home renovations require Invoices and professional supervision in most cases. The bank will insist on the quotes been copied to them and certificates from an Engineer or Architect at various stages.

Also the loan amount been given must add value to the property, ie. i dont think they will give it for internal decorations.