Mortgage On Existing House

AVENUE

Hi There, I dont currently have a Mortgage on the House i live in. The House is valued at around £90,000. I have combined Credit Card/ Loan Debts of around £25,000 which are currently costing me close on £600 per month. However my income is not as high as it once was, and is currently around £18,500 pa gross. Would it be possible to get a Mortgage on the house to the value of around £30,000 to pay off the loans/credit card debt, and also allow me a bit over for some household improvements, and also Mainly to reduce my Monthly Payments from there current level, or would i need to look more along the lines of a secured loan. Many Thanks.

herbiesjp

You can do a mortgage for that amount (a mortgage is indeed a secured loan).

But you do not need specialist firms or anything, a high street lender should be able to help assuming you fit all criteria.

Income is fine, mortgage amount needed is fine, and the LTV is fine.

The only thing you need to be aware of (and is very important) is the fact you are tunring unsecured debts i.e. your loans etc into secured debt against your home.

The monthly payments will be cheaper, but if you pay over a longer term, then you will be paying more overall as you will be paying over a longer period of time

At that mortgage amount you are going to be very fee sensitive, so do not go for headline rates with high fees, but instead higher rates with low or no fees. Some lenders will treat your application as a re-mortgage, and will offer you free legal fees and free valuation as part of the process

If you are confident to do this yourself have a look at the comparison sites, otherwise get a broker to help as they should find something for you very quickly

AVENUE

herbiesjp wrote: »

You can do a mortgage for that amount (a mortgage is indeed a secured loan).

But you do not need specialist firms or anything, a high street lender should be able to help assuming you fit all criteria.

Income is fine, mortgage amount needed is fine, and the LTV is fine.

The only thing you need to be aware of (and is very important) is the fact you are tunring unsecured debts i.e. your loans etc into secured debt against your home.

The monthly payments will be cheaper, but if you pay over a longer term, then you will be paying more overall as you will be paying over a longer period of time

At that mortgage amount you are going to be very fee sensitive, so do not go for headline rates with high fees, but instead higher rates with low or no fees. Some lenders will treat your application as a re-mortgage, and will offer you free legal fees and free valuation as part of the process

If you are confident to do this yourself have a look at the comparison sites, otherwise get a broker to help as they should find something for you very quickly

Thank you so much, thats much appreciated, ive not had a mortgage for several years now, so am not experienced in searching around for one, the mortgage i had previously which is paid off now, was taken out in the mid 1980's and was just a variable rate repayment mortgage that we had with the one company (Halifax) throughout. Is it the case now that a mortgage will only run for a fixed number of years and would have to be reapplied for periodically depending on the mortgage? Also would you have any idea as to what would be a reasonable interest rate at the moment, and roughly the monthly payments for a £30,000 loan. I've just realised i did'nt mention my age. I'm 52 later this year, so i assume that will limit the repayment term. My NET Income is just around £12,000 pa. Very Many Thanks.

herbiesjp

The mortgage will run for a set timescale i.e 20 years

The intorductory rate, may run for 2,3, 5 years etc - whatever you choose

Your age may limit the overall term to age 65 - which would not be a bad thing - the shorter the better, so you can enjoy your retirement

Your NET income is fine.

Rates are not that important in your scenario, as due to the mortgage amount the difference in rate will be only slight. You need to find maybe higher rates with lower fees.

Can any friends recommend someone?

Over 10 years on a repayment mortgages basis you could be looking at repayments around £300 pm

AVENUE

Very Many thanks once again for your help. I hav'nt really got anyone who could point me in the right direction as to the best way of being guaranteed the best deal available, would you be able to point me in the right direction with regards this? Are the comparison sights easy to navigate for example, or would i be better going to a local mortgage advisor if i could find one, and then perhaps also checking my own bank to see what they have to offer. Are there any large or common pitfalls to come across that i might not be aware of? As you say, doing it this way would mean that i'm paying off unsecured debt by taking on secured debt, which perhaps isnt ideal. However, i know my income isn't going to improve greatly over the next year or so, so getting my payments reduced significantly would be a great help at the moment. Very Many Thanks.