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JGM, Solicitor
Category: Law
Satisfied Customers: 13478
Experience:  30 years as a practising solicitor.
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Dear Solicitor, I am in the U.K and I am planning to buy a

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Dear Solicitor, I am in the U.K and I am planning to buy a property a home where I am a first time buyer. I have cash of about 68,000 but the property is 90,000 so I am short of 22,000. I am eligible for a personal loan upto 29,000. Can I take a personal loan and cover the gap for the purchase price, keeping in mind that I will be mentioning to my conveyancing solicitor the source of funds as personal loan for the difference amount. Thank you.

Thanks for your question. There is no issue with you taking a personal loan for the balance. All you have to do is show your solicitor the loan papers that you sign. In fact this is probably the only way you can finance the balance as most lenders won’t offer a mortgage for less than £25000. A personal loan is a perfectly good source of funds. I hope that helps. Please leave a positive rating so that I am credited for my time.

Customer: replied 1 year ago.
Thank you for the answer, but in the terms and conditions of personal loan it says the purpose should not be to acquire property.
8.1 You agree the purpose of the loan is not to acquire or retain property rights in land or in existing or projected buildings nor is it to repay debt secured on such property. The loan is not secured by any mortgage, charge, standard security or other security which you or anyone else have given, or give, under any other agreement."Please kindly clarify. Thank you.

In principal there is nothing to stop you buying property with a personal loan. Presumably the lender you have approached has offered a product which is not for use as part of a property purchase.

Customer: replied 1 year ago.
If I do take the personal loan from this lender, will I have any isuues with the conveyancing solicitor? What kind of documents will I have to give to the solicitor for proof of funds? I have no problem repaying the personal loan and can even pay off the loan before time too.

You would show the solicitor your bank account with the loan funds being credited by the lender. You could also show the main part of the offer of loan but possibly not the detailed terms.

Customer: replied 1 year ago.
I hope the conveyancing solicitor does not say you cant use personal loan to fund for the balance amount to purchase the property.

There is no general law to that effect even though the lender here has made it a contractual condition of the loan for whatever reason.

Customer: replied 1 year ago.
Thank you. Just a last question if i may, to my understanding you are a U.K solicitor. Is that correct.

I have been a qualified UK solicitor for 32 years.

JGM and other Law Specialists are ready to help you
Customer: replied 1 year ago.
Thank you. Just making sure that I am getting the correct information from a qualified person. Thank you again for your valuable advise.