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  • FIRST POST
    • wiley25
    • By wiley25 16th Mar 17, 7:17 PM
    • 19Posts
    • 3Thanks
    wiley25
    HSBC Homeowner Loan.
    • #1
    • 16th Mar 17, 7:17 PM
    HSBC Homeowner Loan. 16th Mar 17 at 7:17 PM
    Hi all.

    Bit of background:

    About 3 years ago I had about £6000 of credit card/overdraft/other finance debt after I renovated/furnished my property, which I own (with a HSBC residential mortgage, value £85,000, currently owe 58,000).

    I applied at the time for a homeowner loan of £10,000, 6k to go towards debt consolidation and 4k towards home improvements. As I didnt itemize the home improvements part of the loan they declined the loan (and adviced not to reapply for a homeowner loan again for a year or two) and I ended up getting a personal loan to consolidate the debt.

    As it stands now I have about 4000 left to pay on the personal loan and am looking to purchase a new (used) vehicle.

    What recently experience do people have with HSBC homeowner loans, what is their lending criteria? ie, will they lend for the purpose of a new a vehicle or do loans have to benefit them (ie, home improvements)?

    The plan would be to spend 4k of a £10000 homeowner loan on continued debt consolidation (from my previous consolidating personal loan) and the remainder on getting a much needed new vehicle.

    Thanks in advance.
Page 1
    • BrassicWoman
    • By BrassicWoman 16th Mar 17, 7:28 PM
    • 1,218 Posts
    • 4,862 Thanks
    BrassicWoman
    • #2
    • 16th Mar 17, 7:28 PM
    • #2
    • 16th Mar 17, 7:28 PM
    if, in 3 years, you have repaid only 2k and have no extra savings, how can you afford a £10k loan?
    May GC £215/£50 (oops)
    April 2016 GC: £24.09/ £20
    • wiley25
    • By wiley25 16th Mar 17, 7:35 PM
    • 19 Posts
    • 3 Thanks
    wiley25
    • #3
    • 16th Mar 17, 7:35 PM
    • #3
    • 16th Mar 17, 7:35 PM
    if, in 3 years, you have repaid only 2k and have no extra savings, how can you afford a £10k loan?
    Originally posted by BrassicWoman
    The original loan was bumped up to nearly 9,000 once the interest was applied.

    Monthly repayment currently of £168.

    A secured loan of £10,000, matching my remaining mortgage term (20 years) would be £44 pm. Much cheaper (in the short time, admittedly) than other options of financing a new vehicle.
    • DCFC79
    • By DCFC79 16th Mar 17, 7:49 PM
    • 29,345 Posts
    • 18,555 Thanks
    DCFC79
    • #4
    • 16th Mar 17, 7:49 PM
    • #4
    • 16th Mar 17, 7:49 PM
    Sorry to say but the lending criteria is secret, no 1 on here will know andd even if they did you may have to be bumped off.

    Maybe ask the bank your question.
    Je Suis Charlie
    • wiley25
    • By wiley25 16th Mar 17, 7:52 PM
    • 19 Posts
    • 3 Thanks
    wiley25
    • #5
    • 16th Mar 17, 7:52 PM
    • #5
    • 16th Mar 17, 7:52 PM
    Hah, it certainly seems that way!

    I would ask the bank, but during the last application process I asked that very question, even said I would come back to them with an itemised list of all the improvements I planned and their cost. They told me it was too late then and to try again in a couple of years...
    • BrassicWoman
    • By BrassicWoman 16th Mar 17, 8:22 PM
    • 1,218 Posts
    • 4,862 Thanks
    BrassicWoman
    • #6
    • 16th Mar 17, 8:22 PM
    • #6
    • 16th Mar 17, 8:22 PM
    how much would the interest be on your £44 a month loan? over the whole life of it.
    May GC £215/£50 (oops)
    April 2016 GC: £24.09/ £20
    • wiley25
    • By wiley25 16th Mar 17, 8:28 PM
    • 19 Posts
    • 3 Thanks
    wiley25
    • #7
    • 16th Mar 17, 8:28 PM
    • #7
    • 16th Mar 17, 8:28 PM
    A lot more than just paying off the personal loan and borrowing additional funds for a vehicle. However, it would mean being 3-400 a month better off, and as I'm in the process of a business start up, it is a necessary evil. Relatively small overpayments would also vastly reduce an additional 10k.

    I also hasten to add that the subject of this thread isn't "Should I get a loan?", I'm big enough and stupid enough to manage my own affairs, was just after some recent experience dealing with HSBC.

    Thank you for your concern though, I understand a lot of people would take the smaller monthly payment and not realise the long term implications.
    • ViolaLass
    • By ViolaLass 16th Mar 17, 8:29 PM
    • 4,952 Posts
    • 6,805 Thanks
    ViolaLass
    • #8
    • 16th Mar 17, 8:29 PM
    • #8
    • 16th Mar 17, 8:29 PM
    £6k for a car? You could easily spend less.
    • BrassicWoman
    • By BrassicWoman 17th Mar 17, 7:30 AM
    • 1,218 Posts
    • 4,862 Thanks
    BrassicWoman
    • #9
    • 17th Mar 17, 7:30 AM
    • #9
    • 17th Mar 17, 7:30 AM
    Banker's rule of thumb; the loan should be paid off before the asset needs replacing. Holiday loan = 12 months, you go every year. Kitchen/bathroom, 10 years. House extension, life of mortgage.

    Car loan - 3, 5 years? Yet your car is going to last for say 20 years going by loan length.

    You'd be mad.
    May GC £215/£50 (oops)
    April 2016 GC: £24.09/ £20
    • StopIt
    • By StopIt 17th Mar 17, 8:37 AM
    • 474 Posts
    • 406 Thanks
    StopIt
    The original loan was bumped up to nearly 9,000 once the interest was applied.

    Monthly repayment currently of £168.

    A secured loan of £10,000, matching my remaining mortgage term (20 years) would be £44 pm. Much cheaper (in the short time, admittedly) than other options of financing a new vehicle.
    Originally posted by wiley25

    Your maths are way off.


    20 Years x £44 is only 10560, which on a £10,000 loan would be an almost 0% APR.


    What are the exact finances?


    Firstly, this is a route that doesn't address why you're facing this situation. Yes, you'll be "better off" month to month, but what happens when that money is used and then some? More, secured borrowing? I mean, you've already consolidated once, and are likely not even past the point of paying off the interest accrued by taking out the loan.


    Get to the DFW board ASAP, post up an SOA and stop using debt to "get yourself out" of it. It has only one end.
    • PeacefulWaters
    • By PeacefulWaters 17th Mar 17, 9:15 AM
    • 6,390 Posts
    • 7,829 Thanks
    PeacefulWaters
    You want to put your house at risk to buy a car?

    Mad.
    • Money Rollercoaster
    • By Money Rollercoaster 17th Mar 17, 9:22 AM
    • 246 Posts
    • 595 Thanks
    Money Rollercoaster
    If you're going to secure the loan for a car against anything it should be the vehicle itself via an HP deal or something. You get into a mess with the finance ... they get the car and you still get to sleep in your house as normal!
    Living Life @ 174 BPM >> CC Balance (0%) -£3,565.99 - Target DFD Dec 2017 >> Loan (Car) (3.1%) -£19,803.74 - Target DFD Nov 2020
    • Malcnascar
    • By Malcnascar 18th Mar 17, 6:07 PM
    • 1,116 Posts
    • 1,220 Thanks
    Malcnascar
    You say youpay £168pm now and this will reduce to £44pm if financed over 20 years. This saves £122pm.
    You also say you will be £3-400 pm better off. I can see soime of this from the above but the remainder?
    You say you are in the process of a business start up, is this where the additional improvement to your finances comes from?
    Will HSBC agree to a Homeowner loan to

    a. consolidate additional borrowing
    b. extend the unsecured lending term
    c. lend funds for the purchase of an asset that has a life term considerably shorter than the proposed loan.
    d. Potential change to your source of repayment if you are deriving income from a new business venture.
    e. Loan to lending ratio of 80%, if your valuation is realistic. Are the Home Improvements maintenance or actual improvements.
    f. Fee's for secured lending such as legal, valuation booking and arrangement fee's.

    I can't speak for HSBC. However, if I were your existing mortgage lender I would be happy to see you take your business elsewhere. For me the risks don't support the lower margins that secured lending provide.

    So what would I do? If your existing car is "toast", I'd look for something that would cost a bit like a cheap car with 12 months MOT, run that for at least a year. I'd concentrate of developing the income from the business and make additional payments to the existing loan. Reassess my situation in the light of the progress I am making.
    • jonesMUFCforever
    • By jonesMUFCforever 18th Mar 17, 7:55 PM
    • 23,745 Posts
    • 10,974 Thanks
    jonesMUFCforever
    Mortgage lending criteria now is much tougher -not for buying a property- but for circumstances like yourself where you want to purchase a car over a long period of time.
    IMO they might agree to lend to you but the car part would have to be repaid over the likely lifetime of the car not the length of your mortgage.
    Add on any fees and you won't save much.
    What goes around - comes around
    give lots and you will always receive lots
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