How long can you wait before drawing down an approved loan in the current climate?

We were approved for a top-up loan in December of last year from the EBS for 40,000. In april I went to the local branch and asked if we needed to reapply given the financial climate - to which i was told emphatically no. Once it was approved that was that (i didnt get this in writing though) We had to sign a review form for the extra life insurance to declare that our health hadnt changed in the mean time. We are now progressing with building work and I am a little worried that the EBS will change their minds and we will be stuffed.

Am i being paranoid? Should I draw the loan down now to pay for the first stage of building work (We have savings as well which i originally wanted to use first). This obviously means that we start paying interest that bit earlier (and consequently cant save the extra few thousand)

I am going to go to the EBS at the end of the week to discuss it with them but is there any advice from anyone who knows? Forewarned is forearmed.

anon473

Re: How long can you wait before drawing down an approved loan in the current climate

I would imagine that if you were considered to be marginal in terms of affording the additional debt then the lender might get nervous and withdraw the offer. Don't forget that any rate offered last December is subject to review up to the point of drawdown and will no doubt be higher than at the time of the original approval (in principle).

Re: How long can you wait before drawing down an approved loan in the current climate

To be honest we werent that marginal. Even with the rate hikes the repayments on the top up is less than half of what we save every month (and we are not trying hard to save at the moment) - whether EBS agree with my interpretation is another matter.
anon473

Re: How long can you wait before drawing down an approved loan in the current climate

ignore

Re: How long can you wait before drawing down an approved loan in the current climate

also i forgot, even though our house has dropped in value since december the total borrowing (mortgage + topup) is about 370k. EBS index link their house prices and quoted 443k as the value on our house 3 weeks ago. dont suppose that makes much of a difference.
anon473

Re: How long can you wait before drawing down an approved loan in the current climate

the top up loan is 40k
the house is valued (by EBS) at 443k
oustanding owed 332k

anon473

Re: How long can you wait before drawing down an approved loan in the current climate

Sounds like the post topup LTV (loan to value ratio) could be high (80%+) which could be significant? If you can afford to save so much as mentioned above would you not consider using your savings to fund some or all of the work instead of borrowing?

Re: How long can you wait before drawing down an approved loan in the current climate

All our savings are committed to the building (as well as the top up) - originally we didnt want to borrow anything.

I had't put it together that the LTV had gone up so much because the V had gone down!

anon473

Re: How long can you wait before drawing down an approved loan in the current climate

And your L is going up too!