Home Owners Loan

Ian73

Hi, i am looking to do some home improvements & am looking at getting a HOL,my question is do i have to go to my mortgage lender or can i look around for the best deal.I might be totally wrong with this idea so if anyone can offer words of advise i would be very gratful

Cheers
Ian

MarkyMarkD

If you mean a secured loan (and I think you do) it will almost definitely be cheaper to take it from your mortgage lender than from a second charge lender. In particular there may be fees associated with a second charge lender.

If your main mortgage is not tied, you could remortgage the whole thing to a new lender and get the whole loan onto a cheaper rate.

Or your existing lender (again if your mortgage is not tied) may allow you to have the further loan on an incentivised product.

Hope this helps.

Ian73

Cheers for your help,i think that puts it straight in my mind.

Ian

jellyhead

i hope i'm not confusing matters but i looked into this recently because we need about 15 thousand for an extension. i got a phone call today to say i can have an unsecured loan from marbles at 6.9%, without payment protection. we're 'sub-prime' and if we hadn't been we could have got a loan even cheaper from the AA, northern rock, etc. (and northern rock have a 10 year repayment option rather than just 7). there are no arrangement fees and no penalty if we repay early. for me, i couldn't see anything secured that was cheaper, everything else had arrangement fees and early redemption penalties too, re-mortgaging would have cost a lot in fees too although i suppose it allows you to spread repayments over 25 years.

it may be worth considering some of the best buy unsecured loans before getting a secured one. 6.9% was the personalised rate for me, it may be cheaper if you're not sub-prime. my sister has a higher interest rate than that on her mortgage - unsecured loan rates seem pretty low to me at the moment.

johannamse

I agree with BargainBunny - HOL are essentially a mortgage and when we got one, you have valuation fees and lawyers fees. Also when you want to remortgage your main mortgage, we had to pay a deed of posponment (? I think this is right) to the new company. Anthow, they can be expensive with hidden fees, so have a shop around first and get your sums right. Good Luck.

Ian73

Cheers everyone

jellyhead

my marbles rate was 6.3, not 6.9, i'm a muppet lol! i asked for a loan of half our joint salaries (forgetting to mention that i'm giving up work soon lol! i only earn 3 thousand a year anyway) and they called to say we can have half our salaries and would we like 2 thousand extra. they sent documents for both so i just have to decide which loan to go for.

my brother has paid a fee for his home owner loan from his own mortgage company. my sis just re-mortgaged and lost so much in arrangement fees and early redemption penalties etc. that she has only peanuts left over when she expected enough left over to buy a car. actually getting an unsecured loan might not be easy for everyone but if you can then i do think it's the cheapest option as long as you can afford to spread it over 7 years etc. rather than the mortgage term.

hairy_cornflake_2

It would depend on your personal circumstances and your current lender. Always try and see what rate they would offer you a further advance at and if a variable rate, try and see if you would be entitled to any discounts - if you dont have any tie in to your lender, look at remortgaging. There are many lenders who will remortgage with no fees or legal costs - but way up the rates! - the one account or intelligent finance offer some great deals currently - hope this helps ;D ;D

MarkyMarkD

A lot boils down to your income and your spare cash, as you can't get unsecured loans over the long term.

Many people want to spread the cost of home improvements over the same term as their mortgage - and can't afford to repay them over 5 years or so.

Getting a further loan on your mortgage won't normally involve legal charges, and won't necessarily require a valuation (depending on the level of equity in your house).

And, further loans can be obtained at rates which are very cheap indeed. We have a further loan at present which is at bank base rate + 0.55% = 5.3%. And we paid no fees at all - the valuation fee was refunded. And we aren't tied in at all either.