Changing mortgages and freeing up money?

tarkwin

Is it possible to change our current mortgage (HSBC-£33000) to another mortgage provider at a higher amount (eg £42000) giving me and my wife £9000 cash to pay off our debt. The situation has got very bad indeed and it needs addressing for us to move on in our relationship!!!! I have a degree but have really struggled to find a decent job, (I do work 36 hours a week, she does 16... we also have 2 young children 2 & 9). We are bringing in enough but are struggling to pay the debt interest. If there was no huge debts we could get by... one larger mortgage would really be a lifesaver!!!!!!

Is this possible? Can anyone help... I have had enough arguements and I want to get back to a family life! Thanks guys.

AndrewSmith

tarkwin wrote:

Is it possible to change our current mortgage (HSBC-£33000) to another mortgage provider at a higher amount (eg £42000) giving me and my wife £9000 cash to pay off our debt. The situation has got very bad indeed and it needs addressing for us to move on in our relationship!!!! I have a degree but have really struggled to find a decent job, (I do work 36 hours a week, she does 16... we also have 2 young children 2 & 9). We are bringing in enough but are struggling to pay the debt interest. If there was no huge debts we could get by... one larger mortgage would really be a lifesaver!!!!!!

Is this possible? Can anyone help... I have had enough arguements and I want to get back to a family life! Thanks guys.

Hi, and welcome to the forums.

In theory, yes it is possible to increase one's mortgage to release funds to repay any current loans or other debts. Whether it is possible for you to do it, or whether it is the most appropriate thing for you to do is another thing.

The suitability and ability of this will depend entirely on your own personal circumstances, income, property value and type, credit history etc: all of which are beyond the scope of discussion on a forum such as this. There is no substitute for taking professional advice.

However, if you post a litle more details along the lines of the points above I am sure we can point you in the right direction.

What you must remember is that by adding short term debt to a mortgage, you will pay far more for it in the long term.

Hope this helps

Andy

herbiesjp

As Andy rightly says, in theory you can do exactly what you are looking for.

Whetehr or not it is good advice is a different matter i.e. can you move some debt to 0% interest credit cards?

Have a word with a whole of market mortgage adviser and let them come back with some options based on your full current circumstances.

HTH

tarkwin

Myself and my partner are both in work. I work 36 hours a week and she works 16 hous a week. In total we only bring in £17,500 a year!!!!! God knows how we survive! But our house is worth more than the 33,000 mortgage we currently have. Not much more though. The house is worth over 60,000 but the houses in our are are all low prices. My credit history is fine, no problems at all. My wife thought the same but has been recently been rejected for a small loan, so I guess hers isnt clear? Any other details needed? We need to sort this out.

As for being a new member. I have been here ages in another name, this is the wifes account. My wife is 31 and been in employment since 17, only stopping to have children. I have always worked full time since leaving university...

herbiesjp

Based on those figures it would look like you would have the pick of most lenders on the market.

It would just be the case of finding the best one that meets your needs i.e. if you want flexibility or fixed deals, and wheterh you will fit the lenders' criteria (if you wife does have something registered against her)

Have you got a copy of your Experian or Equifax credit reports to see if there is anything on there? Sometimes you do not get a loan agreed, due to the company's credit scoring system and it does not necessarirly mean that you have got something registered against you.

tarkwin

herbiesjp wrote:

Based on those figures it would look like you would have the pick of most lenders on the market.

It would just be the case of finding the best one that meets your needs i.e. if you want flexibility or fixed deals, and wheterh you will fit the lenders' criteria (if you wife does have something registered against her)

Have you got a copy of your Experian or Equifax credit reports to see if there is anything on there? Sometimes you do not get a loan agreed, due to the company's credit scoring system and it does not necessarirly mean that you have got something registered against you.

I dont even know what a Experian Equifax is? And how do I get one lol. The mood here in our house is already much better! Thank you, all I need now is the cheapest mortgage. I have found that a 5 year fixed (4.99%) is £236 per month which is easily affordableish. So that isn't a problem. What do I have to do now? Apply for it or contact my current mortgage? Sorry I am a bit clueless... I really do appreciate your help.

silvercar

Remember there will be charges in moving your mortgage - legal charges and valuation fees as well as the mortgage charges.

Although it seems a straight forward solution to your debts you will be trading a short term problem to a long term loan, unsecured to secured debt. The actual money you pay back will end up more and you will be paying it back over a longer time.

I would suggest you do consult an advisor.

Experian Equifax are credit reference agancies, you will see why your wife was refused a loan.

At the end of the day if you want to move your mortgage you just send in a mortgage application to the new company. Make sure it is a re-mortgage you are applying for, most have a legal panel that sort out the legals for you - some even offer a free legal service.

Gorgeous_George

£4.99% may sound cheap but check out the small print. Things such as tie-in beyond the fixed period, admin fees for applying, early redemption etc., can often make the headline rate less attractive.

You'll have to pay for a valuation, solicitor fees, redemption of the old mortgage, admin fees for the new on. This could suck out £1000 of the extra capital that you are raising.

I can understand the attraction of your proposed course of action. but it isn't cheap. May be worth considering borrowing more providing you're savvy enough not to squander the extra but keep it in ISA's etc (£6K between you) so that if the situation arises again, you won't need to pay all the fees again to raise more capital against your home.

Best wishes

GG

tarkwin

So basically I am looking for a £40,000 mortgage (NOT INTEREST ONLY) that WILL give me £7,000 cash and to transfer my mortgage to themselves with little fuss? I found Tesco reasonable... 25 year (5 year fixed) at £236 per month over the 5 yearDoes this sound right?... and will they transfer it with any problems? What are peoples experiences with changing mortgages?

tarkwin

Any help is appreciated guys... using my details the Abbey will only give me 30,000? Any companies specialise in transfering mortgages? Or can anyone help?

Scouse_Mick

I changed mortgages from Nationwide to Yorkshire Building Society a couple of years ago and it was not a particularly pleasant process to be honest. Its not quite as bad as buying your house all over again but it was a lot more stressful than the process needs to be! That was my experience anyway.

And don't forget you will have to pay exit fees, legal fees, application fees and surveyors fees. Make sure you add all these up beforehand as it may not be worth it. Gorgeous George is right this will easily be in the region of £1000 which is dead money that you'll never see again.

If you do go ahead with it and you can easily afford the £236 why not reduce the term a bit to say 20 years or pay £250 pcm or something? You'll pay more per month but in the long run will save a lot on interest. As silvercar says you will be paying a lot more in total in the long run unless you overpay your monthly payments a bit. Its worth it if you can afford it.