Help please, regarding a secured loan.....

nishcoin

Help pls,

I'll try and explain as simply as I can, I am about to move house.

My current house has a 'charge' on it from a secured loan that I took out some time ago. Of which the cost is £145 p/mth.

My new mortage putting down 10% deposit and repaying secured loan = £770

or

My new mortgage putting down 25% deposit and NOT repaying secured loan = £525 (thus I would have to pay the £145 each month as well = £670

My Question;

Is it better for me to repay the secured loan but have a smaller deposit thus having a larger monthly mortgage.

or

Keep the secured loan and have a larger deposit thus having a smaller monthly mortgage.

Should I keep the secured loan or get rid?

Any help would be appreciated....

Nishcoin

Thrugelmir

To clarify the situation. Are you intending to move or just remortgage.

nishcoin

Apologies for the confusion...

I will be moving house, but just wondered if I should keep the secured loan giving me a larger deposit and thus enabling me to have a smaller monthly mortage or use the profit from the sale to pay of the secured loan giving me a smaller deposit and a higher monthly mortgage by £100

Thrugelmir

nishcoin wrote: »

Apologies for the confusion...

I will be moving house, but just wondered if I should keep the secured loan giving me a larger deposit and thus enabling me to have a smaller monthly mortage or use the profit from the sale to pay of the secured loan giving me a smaller deposit and a higher monthly mortgage by £100

The secured loan will be discharged when you sell the house. It won't be transferred to the new one.

nishcoin

The secured loan is 'Portable', so I would be able to take it to the new house if I wanted.

_Andy_

Putting the secured loan on to a first charge (mortgage) will almost undoubtedly give you a lower interest rate.

Conrad

Your mortgage lender, whichever one you chose, will not allow the secured loan to come with you. In any event the secured loan will be re - underwritten (oh yes it will, before you say it wont because its portable), and tbh it would be a lot of hassle having a mortgage and secured loan underwritten at the same time. For a start lenders online / computer based (call centre staff using one) application will not 'understand' / allow for this scenario as it's unusual and not built in by those that design application process's so all manner of confusing unforseen events will crop up that you cannot even begin to forsee.

Just pay off the loan.

nishcoin

Thanks for the reply.

My mortgage lender are willing to accept having the secured loan on my new house if the secured loan company remain 'second charge' as they are on my current house.

My wife would like to pay off the loan with the proceeds from the sale of our house but that would mean a lesser deposit for the new and a higher mortgage.

I am unsure......whether to just keep it?

Thrugelmir

Mortgage lenders always take the 1st charge on a property.

Another option. Stay put for a while longer and reduce the balance owed.

Conrad

nishcoin wrote: »

Thanks for the reply.

My mortgage lender are willing to accept having the secured loan on my new house if the secured loan company remain 'second charge' as they are on my current house.

Your'e likely dealing with front line staff. Once this gets near to legal completion and the lenders own legal team and a senior underwriter get a look, thats when the problems may come. Go into this with your eyes wide and get proper approval from both lenders up front.

Remember lender 1 will impose conditions on lender 2 that were not present pre - credit crunch. Lender 2 may well not agree.