is this loan a bad idea

piltonvet

hi
i was just wondering what peoples thoughts were on the idea me and my wife are having.
we would like a loan of 15000 so rang my mortgage provider who offered a rate of 4.99% variable secured,and a £185.000 setting up fee it can run along the life of the mortgage which we are happy with ,16 years left.
we have 3 years left out of a 5 year deal with the mortgage provider on our current deal of 6.40 % fixed and will no doubt switch if a better deal is about at the time.

so in effect at the end of 3 years fixed we will have £50,000 left on the mortgage plus the loan which will then tagged on to a new mortgage .
so only taking a risk for 3 years on the variable loan rate.

so good or bad idea:rolleyes:

Mips

Sounds ok to me - aside from the 185k setting up fee

rictus123

Same as me Dippychick! Lucky you, getting such a low apr but it is long term. My loan is 21.9% apr,can you imagine the intrest on that if it was over 16 years aswel! Can i ask what its for?

piltonvet

rictus123 wrote: »

Same as me Dippychick! Lucky you, getting such a low apr but it is long term. My loan is 21.9% apr,can you imagine the intrest on that if it was over 16 years aswel! Can i ask what its for?

a bit of everything ,car ,house,consolidation .
start the new year afresh we can afford the payments ,i know the interest will be a lot but im treating the loan as mortgage as it will be tagged on to it when fixed term is over

rictus123

Alright good stuff. Keep a few k emergency fund just incase! Was just being nosey

CLAPTON

from what you say, it would seem to me that it's just a way, to live beyond your means

if you do this then make sure you don't run up any other debts and start to save up for the next car / everything

rictus123

Agree clapton but is it putting your mortgage payment up by much? If you are using it to pay off a debt you currently have what is the difference between this amounts monthly payment and the difference in your current mortgage payment compared to your new one?

savingmummy

CLAPTON wrote: »

from what you say, it would seem to me that it's just a way, to live beyond your means

if you do this then make sure you don't run up any other debts and start to save up for the next car / everything

I agree with this! I will never get a loan unless it was desperately needed x

piltonvet

CLAPTON wrote: »

from what you say, it would seem to me that it's just a way, to live beyond your means

if you do this then make sure you don't run up any other debts and start to save up for the next car / everything

thats the idea

piltonvet

rictus123 wrote: »

Agree clapton but is it putting your mortgage payment up by much? If you are using it to pay off a debt you currently have what is the difference between this amounts monthly payment and the difference in your current mortgage payment compared to your new one?

currently repaying £150.00 a month on credit cards between us on 0% deals which are ending soon and running out of 0% deals.

the loan would work out at £120.00 a month, like i said i will treat it like a mortgage second payment , and start the year afresh .

i suppose we have lived beyond our means for a few years now ,but were not the only ones we`ve enjoyed it but now have taken stock of the situation and this seems the cheapest and easiest way for us

CHR15

Glad you have taken a stark look at your standard of living.

Remember everything you used your credit card for, every purchase you made, and consider you can no longer put those purchases on your cards, all those purchases must come from your current account (which has the £120 loan depleting the total every Month).

The temptation is going to be enormous with a credit card balance of £0 and all that available credit..... just one lot of shopping won't hurt, just one tank of fuel won't hurt etc etc...

Don't underestimate the discipline you are going to need to prevent getting deeper in the brown stuff.... Good luck