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  • FIRST POST
    • Suarez
    • By Suarez 17th Jul 17, 3:18 PM
    • 933Posts
    • 609Thanks
    Suarez
    Pay off some loan or use towards equity?
    • #1
    • 17th Jul 17, 3:18 PM
    Pay off some loan or use towards equity? 17th Jul 17 at 3:18 PM
    I am looking to move house but have a large loan.

    Current House £90,000
    Mortgage remaining £69,000

    New House £90,000
    New Mortgage £67,500

    My income £15,000
    Partner £10,000
    One dependant

    The only finance I have is a £19,000 loan. I have saved approx £10,000 so my main question is - would I be better using some of that amount to reduce the balance of the loan or better to put it towards the property equity to have a £60,000 mortgage instead?
Page 1
    • getmore4less
    • By getmore4less 17th Jul 17, 5:10 PM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    • #2
    • 17th Jul 17, 5:10 PM
    • #2
    • 17th Jul 17, 5:10 PM
    What rate is the low and mortgage for different LTV.

    How much are you paying and could you pay.
    • Thrugelmir
    • By Thrugelmir 17th Jul 17, 5:24 PM
    • 55,548 Posts
    • 48,899 Thanks
    Thrugelmir
    • #3
    • 17th Jul 17, 5:24 PM
    • #3
    • 17th Jul 17, 5:24 PM

    The only finance I have is a £19,000 loan.
    Originally posted by Suarez
    Suggest you try some lenders online affordability calculators to ascertain the impact. This is a significant debt to owe given your income.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • tori.k
    • By tori.k 17th Jul 17, 7:00 PM
    • 2,848 Posts
    • 6,305 Thanks
    tori.k
    • #4
    • 17th Jul 17, 7:00 PM
    • #4
    • 17th Jul 17, 7:00 PM
    You will want to speak to a broker a 6k loan made 20k difference in our DIP with Halifax and we are not on much more than you 30k a year between us, no dependants.
    Debit to Credit (stage 1) 3652.34 completed 15/10/16
    Debit to Credit (stage 2) 6299.09 completed 25/06/17
    Last Castle 150,000/ 25300
    • CD*
    • By CD* 17th Jul 17, 10:34 PM
    • 9 Posts
    • 5 Thanks
    CD*
    • #5
    • 17th Jul 17, 10:34 PM
    • #5
    • 17th Jul 17, 10:34 PM
    I am looking to move house but have a large loan.

    Current House £90,000
    Mortgage remaining £69,000

    New House £90,000
    New Mortgage £67,500

    My income £15,000
    Partner £10,000
    One dependant

    The only finance I have is a £19,000 loan. I have saved approx £10,000 so my main question is - would I be better using some of that amount to reduce the balance of the loan or better to put it towards the property equity to have a £60,000 mortgage instead?
    Originally posted by Suarez
    75% LTV is the trigger rate for cheaper deals.

    May depend on the interest rate on the loan versus the mortgage.
    • Suarez
    • By Suarez 18th Jul 17, 8:37 AM
    • 933 Posts
    • 609 Thanks
    Suarez
    • #6
    • 18th Jul 17, 8:37 AM
    • #6
    • 18th Jul 17, 8:37 AM
    What rate is the low and mortgage for different LTV.

    How much are you paying and could you pay.
    Originally posted by getmore4less
    The mortgage rate would be 1.98%. The loan rate is 3.98%.

    I'm paying £500 per month of capital off the loan at the moment including the capital element of the monthly payment.
    • Suarez
    • By Suarez 18th Jul 17, 8:38 AM
    • 933 Posts
    • 609 Thanks
    Suarez
    • #7
    • 18th Jul 17, 8:38 AM
    • #7
    • 18th Jul 17, 8:38 AM
    You will want to speak to a broker a 6k loan made 20k difference in our DIP with Halifax and we are not on much more than you 30k a year between us, no dependants.
    Originally posted by tori.k
    Can i be cheeky and ask how much mortgage you got?
    • getmore4less
    • By getmore4less 18th Jul 17, 9:21 AM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    • #8
    • 18th Jul 17, 9:21 AM
    • #8
    • 18th Jul 17, 9:21 AM
    The mortgage rate would be 1.98%. The loan rate is 3.98%.
    Originally posted by Suarez
    there is your answer even if you don't hit your 75% LTV your 80% rate will probably still be better than the loan.
    • Suarez
    • By Suarez 18th Jul 17, 9:31 AM
    • 933 Posts
    • 609 Thanks
    Suarez
    • #9
    • 18th Jul 17, 9:31 AM
    • #9
    • 18th Jul 17, 9:31 AM
    I understand what you're saying but my question was more in terms of what would be better to get the actual mortgage. Do lenders prefer lower debts or higher deposit?
    • tori.k
    • By tori.k 18th Jul 17, 6:18 PM
    • 2,848 Posts
    • 6,305 Thanks
    tori.k
    Can i be cheeky and ask how much mortgage you got?
    Originally posted by Suarez
    Just under 150K that was without the loan
    Debit to Credit (stage 1) 3652.34 completed 15/10/16
    Debit to Credit (stage 2) 6299.09 completed 25/06/17
    Last Castle 150,000/ 25300
    • Thrugelmir
    • By Thrugelmir 18th Jul 17, 6:43 PM
    • 55,548 Posts
    • 48,899 Thanks
    Thrugelmir
    I understand what you're saying but my question was more in terms of what would be better to get the actual mortgage. Do lenders prefer lower debts or higher deposit?
    Originally posted by Suarez
    Debts and deposit don't sit in different pots. What matters is the net balance. As that's how much equity you have. Nor do some lenders like a high unsecured debt level in relation to income. Loss of job/income means there's no where to hide.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • getmore4less
    • By getmore4less 19th Jul 17, 8:48 AM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    I understand what you're saying but my question was more in terms of what would be better to get the actual mortgage. Do lenders prefer lower debts or higher deposit?
    Originally posted by Suarez
    Thats a decision you make later once you have the numbers and potential rates based on the various LTV guided by the broker.

    If you can get enough with both then no problem
    If dropping £10k of the debt helps then no problem
    the last resort is borrowing less at the lower rate.
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