Yet another request for mortgage advice.

thefuzzbox

Hello,

Plenty of help received in the past so hoping for assistance once again in respect of some mortgage advice/suggestions.

Present Status: Married/3 kids. Partner doesn't work. I earn 60Kpa.
Present Mortgage: Nationwide Tracker br +0.34% (but with min. 2% so presently paying 2.34%) - repayments £303pm
House Value: Approx 325K, Current Mortgage 55K. (17ish yrs).
Other Debts: 2K loan (18.9%) - repymts - £126pm for 18 months.
Present financial happiness status: Nigh on 0%, scraping by (kids!)
Savings: None

Proposed plan of action:
Switch&Fix with Nationwide to 5yr fix at 4.59% (no product fee), but up mortgage to 85K (i.e. extra 30K borrowing). Going for this option as no ERC would be payable to Nationwide (saving approx 1750K)

Why borrow more ? Would use extra 30K for conservatory (15k?)/bit of internal building work(5k?) /repay the 2K at the ridiculous rate (2k), leaving 8K for holiday (2K)/ funds to put aside (1 car will probably need to be replaced in next couple of years).

Concern: Repayments would go up to approx 450/500pm from present 300pm but should be easily serviceable.

Question: Does this seem like a reasonable course of action if I am to borrow an extra 30K, is it even possible or have I oversimplied/missed out a key point

Thanks - thefuzzbox

Thrugelmir

thefuzzbox wrote: »

Present financial happiness status: Nigh on 0%, scraping by (kids!)
Savings: None

Then why burden yourself with another £28k of debt and take a holiday that's going to take you 17 years to pay for?

shortchanged_2

Sorry I have to ask but why are you struggling so much with a household income that high, very little apparent debt and such a small mortgage?

Something doesn't quite add up here. Are you being totally honest?

Spangled

If you increase your mortgage borrowing, do you HAVE to put the entire amount (£85k) on the new rate? ie could you keep your existing £55k mortgage on your BoE+0.34% tracker (a GREAT rate) and just add the additional £30k to the mortgage at whatever rate Nationwide will give you?

Is your current tracker a lifetime one or for a certain time?

kingstreet

You're already with Nationwide. Are they happy to lend you another £30k on a normal mortgage rate?

Normally they like to charge existing customers more for additional borrowing.

Personally, I think you need to carefully consider what you spend each month before you think about adding short-term debt and "spends" to the long-term commitment of a mortgage.

Things like this can become a habit, with you coming back to the well every couple of years for another "fix".

thefuzzbox

Hi,

Thanks for the replies to date.

Thrugelmir - Fair point about the holiday.

shortchanged - Yes, it was an honest appraisal of where I stand presently. Conscious fortunate to have the salary. Culmination of things lead me to this point. House isn't by any means small, but want some extra room with 3 kids (7,5,3 yrs old). Figured moving house would cost a huge amount - extra 50K to move to get the extra space plus 12K stamp duty equalling 62K before any other associated costs. Looked to be a cheaper option, and making building changes would mean we could comfortably stay here another 10 years.

Spangled - It's a lifetime tracker. Although base rate obviously not moved today, I'm feeling it may be time to fix anyhow. I just envisaged Nationwide saying no chance getting the extra at a mortgage rate, but instead of a loan at a whacking rate.

spitfire13

8k for a holiday?????? thats one good holiday, have you ever heard of a late deal? your figures dont add up, you shouldnt need a loan if your salary is 6ok a year with a 300 a month mortgage! are you spending too much of your disposable income, i think so!

Jenniefour

Why not go over to money saving board and see how you can save money on your outgoings - other than mortgage which is on an enviably low rate. And you will have seen the news that interest rates remain the same. Sounds like a review of where your considerable income is going might help. Some adjustments here and there and a proper budget which you can stick to might then put you in a position to get rid of the 2k debt and then save for things like holidays. Taking on more debt -at a higher rate -sounds like a risky proposition to me - but then I am fairly risk averse and would not consider increasing a mortgage to pay for 'extra's' like a holiday or a conservatory.

shortchanged_2

thefuzzbox wrote: »

Hi,

House isn't by any means small, but want some extra room with 3 kids (7,5,3 yrs old).

You have the same number of kids as I do and my house is probably smaller than yours.

If you are already concerned about your finances why do you want to add to them?

I would love a bigger house or even to extend it but I can't afford it at this moment in time so we just get on with things as they are.

All I would say is do not overstretch yourself financially, it is only likely to end with problems.

thefuzzbox

spitfire13 - Thanks for the input. My breakdown on the excess 8K was as follows (i.e. 2K for a holiday). However, as a couple of folk have pointed out, that was a pretty foolish thing to contemplate.

leaving 8K for holiday (2K)/ funds to put aside (1 car will probably need to be replaced in next couple of years).

"you shouldnt need a loan if your salary is 6ok a year with a 300 a month mortgage! are you spending too much of your disposable income, i think so! " -

To clarify for all. I wasn't intending to come on here and plead poverty - I know there are plenty of folk in a theoretically much worse position. I would however counter that I certainly don't have much disposable income, and holidays tend to be camping/farms rather than any sun-drenched superstay (helps that I'm the worlds pastiest person so sun doesn't really work for me anyway!).

My query was was more in terms of the mechanics of additional borrowing and what options were available in terms of remortgaging. The details were provided as context.

Thrugelmir

I agree with Jenniefour. Tackle the issue from a money saving angle. Perhaps using the money saved to clear your existing debt quicker. This will open up your options in the future.