Can you help?

carlsberggal

Hello, I'm in a bit of a quandry and useless at figures!! I'm on a fixed rate of 5.44& until November next year, Northern Rock (lender) want to me to take a secured loan out of £10,000 instead of raising the mortgage. This would be at a cost of 9.97% with £375.00 fees. The penalty for switching mortgages is £1600. The mortgage is £37,000 and the house is worth £140,000 - £145,000. Shall I go with the secure loan or completely re-mortgage? Many thanks in anticipation

dimbo61

Well we dont know how long you want the loan over ? 5/7/10 years or do you want to add it to the mortgage?
Have you considered a personel loan ( went on moneysupermarket and found 3 lenders under 10% ) Whats your credit score ? check this out !
What do yo need the loan for ?
You have a small mortgage and good LTV but we dont know your income or debts!
You have a secure fixed rate for another 12 months even at 5.44% and an ERC of £1600 plus set up fees if you move elsewhere.
DO You really need the £10,000 ?

carlsberggal

Hi dimbo61 - we need to get a loft extention as just found out 18 year old daughter is having a baby and is coming back from uni to stay with us and we need the room
My credit score is good
Income is around £38,000 (for both of us), though mortgage is in my name as I had it before me and my husband met. Though his score is not brilliant, so maybe would have to be in my name only, earn £18,000.
Have a loan with the Halifax for £9,000, no credit card debts
Heads just spinning and need to know my options, so we can move ahead

dimbo61

You may want to see one of them " whole of market mortgage brokers" for best advice.
I have an offset mortgage which is fixed for a few years
First direct seem to have some of the best deals at the moment including a 3 year fix at 4.39%.
You are spending the money on improvements to your home which will we HOPE add value !
Adding an extra bedroom and maybe an en suite would add value when you come to sell.
What interest rate are you paying on the loan ?
Taking an offset means that you can keep the extension money in the offset account untill you need to pay for work or buy materials!
You should be able to borrow 4X your income if no other debts and LTV of less than 50% GOOD LUCK with everything

carlsberggal

The loan is if I remember as the paperwork is at home, 7.9%. And thanks for the good luck!