Been curious on this one for a week or so now, and I know if I ask an advisor they're going to look at me like I've took a dump on their desk.

Is it possible to get a mortgage that's not tied to a property?

My thinking is that it will be easier for me to get, since the company doesn't actually release any money to begin with, plus when I do find somewhere the funds can be released quicker. It's also a win for the provider since I'm paying on a borrowing that's not actually been borrowed yet.

Also it means I won't have to save up an indeterminate amount for the next 10 years to be told no.

why not just borrow more against your house?

I was under the impression, but could be very wrong, that you needed a property to borrow money against,
so, that if you did not repay the loan, the mortgage company would always have your property to sell on, and recoup there loss

Steve

Mortgages are 'secured' loans against something of value. In this case the lender will take a charge against the property the money is lent against. In the event that you fail to pay the lender, via a court order, takes possession of the property and sells it. Once it has got its money and cost it will return any difference to you.

Are you saying you want to secure a mortgage to buy a house that you haven't found yet, and don't currently have a deposit for but will when the time comes?

I believe the process can be started, and you can get approval for a 'mortgage in principle'. That way the checks against your personal circumstances can be completed, and only the checks on the house will need to be done.

But I can guarantee the mortgage will NOT be what takes the time. We got a mortgage agreement ten minutes (roughly) after finding a house, it was all the land checks and other solicitor crap that took two months.

You can get a morgage agreement in principle. this involves them carrying out all the credit checks etc which are required in advance of being given the morgage and is an agreement from the lender of the sum they are prepared to lend and subject to their approval of the property (once you find one).

My understanding of the question is...

You would like to start paying for a mortgage now although the bank will only set aside the money without actually releasing it until you buy a property.

I'm not sure of the logic of paying interest on a loan that you don't have? Why not save up what you would pay to the mortgage company each month and earn interest on the money?

I took out an endowment policy about 3 years before I got my house.

When I was looking for a house I went and got the mortgage agreed in principle based on the endowment and a repayment to cover the gap between what I'd already sorted and what I wanted to spend.

When sorting the mortgage one place looked at me like I was a criminal (and even suggested what I'd done with the endowment was illegal), the other place laughed and sorted me out very quickly with what he claimed was probably the longest list of options he'd ever seen due to my good financial sense.

In short No.

Mortgage companys tend to have a lot of different offers with different rates usually depending on protery value and deposit percentage, etc. Without having a property to mortgage the mortgage company would have nothing to value and with no deposit they wouldnt be able to slot you into a group.
The only thing you would be able to do is as others have said and get a mortgage in principal, to do this you would need to workout around about what property price you would be buying and what deposit you would have to get a good deal, its similar to what your asking except that is already agreed and you dont pay anything until the mortgage is finalised.



[Edited on 10/11/13 by chrism]

just make regular savings equal to what you think the mortgage repayments are likely to be.
Choose a regular savings account that gives the best interest rate.

That way you will get used to losing a chunk of income every month, plus build a deposit.

probably worth a visit to a bank mortgage adviser and see what options you have at the moment. banks tend (IME) to be easier to deal with, specialist advisers elsewhere are often too hungry for commission. Have their uses though...

You want to make mortgaage payments on something you do not own?





You are better off putting that cash into savingd account and use that as deposit the amont you will need to borrow wilk be less so you win.
Unless you hsve found a long term low rate mtg, can't see why you want to psy interest.

Mortgage in principal, that makes a lot more sense.

Thankyou all