Re-mortgage - does this sound a good deal??

getmore4less

I have asked the brokers to look at borrowing £100,000 over 25 years so our debts will be cleared

No they won't be cleared you will just moved them and put your house at risk and will be paying the debt for a lot longer costing thousands

Why not look at the Woolwich for extra borrowing.

If they will give you more, it will be cheaper than a remortgage overall with the bulk of the lending staying at base+0.79%


You also need to understand why you have £25k of extra debt and what has changed to stop that happening again.

What does your SOA look like?

Thrugelmir

neenmarie wrote: »

Sorry i'm really not any good at this mortgage thing and i'm trying to understand it all. How would this work, could you explain. Would we get this with my husbands bad credit report?

Are you saying we could get a second mortgage on the same house? so borrowing £25k over 10 years would be;-

25,000 divided by 10 years = £2,500 per year
£2,500 divided by 12 months = £208.33 per month

As an example. You could borrow £25k over 10 years at a monthly outgoing of £330.

The interest rates aren't cheap on secured loans but at least you could retain your existing mortgage deal.

The secured loan would result in a second charge being placed on your property after your main mortgage. If you wished to repay early there would be a settlement charge.

neenmarie

getmore4less wrote: »

I have asked the brokers to look at borrowing £100,000 over 25 years so our debts will be cleared

No they won't be cleared you will just moved them and put your house at risk and will be paying the debt for a lot longer costing thousands

Why not look at the Woolwich for extra borrowing.

If they will give you more, it will be cheaper than a remortgage overall with the bulk of the lending staying at base+0.79%


You also need to understand why you have £25k of extra debt and what has changed to stop that happening again.

What does your SOA look like?

I know we are moving the debt but at the moment we need money to live on. I just want this big mess sorted out and to be honest it's mostly my husbands debt and i'm not sure where he has spent it?

I can really see that our mortgage of 0.79% is good but the rates will go up eventually. We can't borrow the £20k from the woolwich as it was declined due to hubby's bad credit report.

What is a SOA? Sorry probably being really thick!!!

neenmarie

Thrugelmir wrote: »

As an example. You could borrow £25k over 10 years at a monthly outgoing of £330.

The interest rates aren't cheap on secured loans but at least you could retain your existing mortgage deal.

The secured loan would result in a second charge being placed on your property after your main mortgage. If you wished to repay early there would be a settlement charge.

I see, i suppose it's best to pay more for a shorter amount of time. What about when the rates go up though, we can only afford around £650 per month on our mortgage? Also what about our credit rating how do we know who will lend us the money? I asked the woolwich why we were declined and they said it was something to do with my husbands bad credit report but couldn't tell us what!! How are we going to sort anything out if we don't know what it is that is stopping us?

Thanks

CloudCuckooLand

SOA = statement of affairs. Understand how all the money is going out, and you may realise unexpected savings...

Get to the debt-free wannabee forum.

neenmarie

CloudCuckooLand wrote: »

SOA = statement of affairs. Understand how all the money is going out, and you may realise unexpected savings...

Get to the debt-free wannabee forum.

I have worked it out and carrying on the way we are we don't have anything left after all the bills are paid and debts. We are really struggling! My husband is taking money to live on from a reserve account we have with our mortgage and that is up to it's limit now!

getmore4less

SOA

http://www.makesenseofcards.co.uk/soacalc.html


You need to go through one of these and find out where your money is going.

You have to go back through the debt to find out where it has gone, if this has been funding lifestyle in any way you need a serious look at the big picture.

Another option is to consider a DMP , unsecured debt are the first thing to stop when you can't put food on the table.

Losing that good mortgage rate must be the last resort.

Thrugelmir

neenmarie wrote: »

I asked the woolwich why we were declined and they said it was something to do with my husbands bad credit report but couldn't tell us what!! How are we going to sort anything out if we don't know what it is that is stopping us?

Thanks

The Woolwich won't be interested in consolidating debt. Mortgage lending is at low interest rates as its low risk. Normal mortgage interest rates don't factor in the risk of a borrower doing exactly the same again in the future. I.E. spending money they haven't got. Ultimately defaulting on their debts.

neenmarie

Thrugelmir wrote: »

The Woolwich won't be interested in consolidating debt. Mortgage lending is at low interest rates as its low risk. Normal mortgage interest rates don't factor in the risk of a borrower doing exactly the same again in the future. I.E. spending money they haven't got. Ultimately defaulting on their debts.

What would you do in my situation? I want whats best for us now and in the future and really don't know what to do or who to speak to?

getmore4less

neenmarie wrote: »

What would you do in my situation? I want whats best for us now and in the future and really don't know what to do or who to speak to?

debtfreewanabee board

http://forums.moneysavingexpert.com/forumdisplay.php?f=76


A SOA is a must to start planning your way out of this.