Remortgage advice please.

Leanne1812

Hi forum,

Hubby and I owe just short of 55k. There are 2 parts to our mortgage. 1st one is around 15k on capital repayment ( due to end in around 6-7 years). 2nd part is around 39k on interest only. Monthly repayments in total £414. Both parts are on SVR so we're not tied in, think it's around 4% at the moment with RBS.

We are considering consolidating both loans into one and putting on interest only for perhaps 2 years to give us some leeway during a financially tight spot. Repayments will drop to around £180 ( done with RBS mortgage calculator) . Do you think this will be easy enough for us to do? Should the bank be quite willing to change our deal or might it be difficult for us to do this?

Many thanks in advance.

Leanne

opinions4u

Most lenders would expect to see a repayment vehicle (e.g. a pension fund or stocks and shares ISA) to repay the interest only loan.

Putting this in to place usually costs as much as being on repayment anyway and, as many endowment policy holders have found, doesn't guarantee to repay the debt anyway.

You could look at extending the term (if age and retirement plans allow), but going to a mainstream lender and saying "things are a bit tight will you lend us some money please" isn't a great way to get a mortgage.

Post:

- value of property
- details of other loans you have
- details of any bad credit / missed payment
- your salaries
- your ages
- what your "financially tight spot" is being caused by

This information may help somebody to identify a better way forwards for you.

Leanne1812

Thanks for your reply.
House currently worth around £130k
Salaries. Hubby 18.5k, me 4.5k.
Ages. Hubby 47, me 40.
No bad debt.
Car loan owing around 7k, repayments £326 a month, this is why we want to consolidate, to pay the car loan

We own outright 2 btl properties. They are currently worth around £140k in total. This is my only income and i've added hubby's rental income to his salary.

In short, we had a small business until last october. When the business ceased trading our income decreased. We took the car loan when we had more disposable income and now we just want to free up some cash every month to make life a bit more comfortable.

Hope this helps, cheers.

Leanne

Leanne1812

Bump..............

Cheers for any replies.

Leanne

herbiesjp

Under 50% LTV you should be fine -however you will need to ask RBS for confirmation.

If you move lender, make sure that you go for a lender that does not have any of the above listed requirements, if you do not intend to set any up/or have any currently that you could use if need be.

getmore4less

you could ask RBS if they will extend the term to 15y.

Problem is you need a plan to pay off this debt.

you could sell the car and run a cheaper one.

Whats the net yield on the BTL might be worth selling one.

Leanne1812

getmore4less wrote: »

you could ask RBS if they will extend the term to 15y.

Problem is you need a plan to pay off this debt.

you could sell the car and run a cheaper one.

Whats the net yield on the BTL might be worth selling one.

Thanks for the advice, i'll phone RBS and see what options they have for us.

We tried to sell the car earlier this year but unfortunately with the car industry in dire straits and with our car being a performance car (A6) we were offered 7k less than what we paid a year previously so it just didn't make financial sense to trade in sadly.

We'd rather hold on to the BTL properties, we're in it for the long term and the rental supplements our income too. The plan would be to sell one of the BTL in time when the mortgage ends or hopefully just go on interest only mortgage for 2 years( when car loan ends)and then switch back to repayment.