Should she re-mortgage ???

barginseeker

Hi everybody,

Im trying to get some advice on behalf of my mum, She has a mortgage & 2 secured loans. By the end of this year she is hoping to sell her house and move abroad...in the meantime she has shown me her secured loan statements and they are ridiculously @ high interest! she has one with london scot @ 13.080% & one with Welcome @ 25.20%

She told me that she wants to borrow another 1k to do the remaining work on the house before it goes up for sale, i,of course advised her not too!

Would i be right in advising her to re-mortgage?? it would be at a lower interest and to pay the rip off loans off straight away, that way she would no longer be getting charged the high rates & she could borrow the extra 1k whilst paying a lower monthly payment too!

Welcome statement - She pays £229 pcm

DATE credit BALANCE

20/12/08 PAYMENT £229.85 £8805.15

03/01/09 Payment £229.85 £8575.30

20/01/09 Capitalisation Debit £245.42 BAL=£8820.72

This has carried on for all these years, makes me angry!! that she has struggled each month & nothing has hardly come off the bal

22/10/09 Payment £229.85 £8163.57

20/11/09 Capitalisation Debit £170.92 Bal=£8334.83

Any advice appreciated

beecher2

What's the level of her mortgage, and how much is the house realistically worth? You need to check that her LTV is low enough for her to get a new deal before doing anything else.

barginseeker

beecher2 wrote: »

What's the level of her mortgage, and how much is the house realistically worth? You need to check that her LTV is low enough for her to get a new deal before doing anything else.

She owes £21800 on her mortgage, the house value roughly £89000.

She pays pcm
Mortgage £230
Loan 1 £130
Loan 2 £229

beecher2

Is your mum in the middle of a deal at the moment? She might have to pay Early Repayment Charges if she is. You also need to phone up the loan companies and ask how would have to be paid to close the accounts. The other issue is making sure she gets a deal without penalties for leaving as she intends to sell up anyway. What's her salary?

barginseeker

beecher2 wrote: »

Is your mum in the middle of a deal at the moment? She might have to pay Early Repayment Charges if she is. You also need to phone up the loan companies and ask how would have to be paid to close the accounts. The other issue is making sure she gets a deal without penalties for leaving as she intends to sell up anyway. What's her salary?

The settlement figure we got for her mortgage is the £21800, I have just emailed the loan company's for SF of them! Yes, that is why im not sure if its a better option for her... i wouldn't want her to be owing more when its time too sell her house! I dont know a great deal when its come to mortgages. Her Salary is round about £13000 with bonus's. Its Just at the moment she is struggling to leave money for herself at the end of the month, then she wanted to borrow another 1k because she cant afford to finish the deco! which would even less money out of her wages :cool:

beecher2

Hopefully someone who knows more will be about to tell you her chances of getting extra funding through her lender, without an ERC - you could always get your mum to phone the lender to see what they say though, and make an appointment with a financial adviser maybe?

barginseeker

Bump! bump

kidcat

Just reading quickly thru and the thing that struck me is why does your mum have such high loans at bad rates? Could her credit rating be poor and she was unable to get credit elsewhere? If thats the case then unless her current lender would offer a change of product, I am not sure she would be able to secure another mortgage or one at a better rate anyway. HTH

barginseeker

kidcat wrote: »

Just reading quickly thru and the thing that struck me is why does your mum have such high loans at bad rates? Could her credit rating be poor and she was unable to get credit elsewhere? If thats the case then unless her current lender would offer a change of product, I am not sure she would be able to secure another mortgage or one at a better rate anyway. HTH

Hi
She has had them loans for over a year or 2 now i think roughly! Her mortgage for 9yrs...her mortgage Co too were high Int but her rates improved over the yrs....trouble is she had a bad credit rating over 10 yrs ago, with a basic bank acc etc ....Last year i told her to apply for a current acc & she got one. The loan im not sure why they are so high interest, i think over the last 9yrs paying mortgage & loans for 2 yrs never missing a payment her credit rating should be good!