A little help please

ANDY21

Hello all.

I have a question.

I currently have a loan with my bank that has just over two years to run. I owe just over 10000. What i would like to know is if i refinanced it for £15000 over 3 years, which i can pay comfortably, will this effect whether i would be able to get a mortgage early next year? The plan is to pay the final settlement figure and use the extra to pay off my credit card [£1800 owing) and fix my car. I have never missed a payment or anything like that.
If anyone could give me the benefit of their knowledge i would be very grateful.

Many thanks
Andy

[Deleted User]

if i were a mortgage lender my question would be...with a £15000 loan outstanding could you also afford the mortgage?

paddyrg

Nobody can know for sure, but mortgage will depend on so many other factors like deposit, etc., anyway - so who can tell? That said, the mortgage company will want to see your deposit in cash, not loan form, so may be anxious that you are highly financed

Can you definately get the extra £5k? The economic climate has changed, it may not be an option to you anyway.

ANDY21

Thanks for your reply Woodbine.

Yes if i was a mortgage lender i would ask the same. It would mean that i would pay £500 odd as my new monthly loan payment, which would be about an extra 100 a month. However i take home 2000 plus and this is my only debt, other than a mortgage payment of course.

Thank you very much
Andy

lawrie28

Why not see if you can get an extra loan for the £5k you need?

Refinancing the £10k will be compounding interest, so cost you more.

And if your looking for a mortgage, you'll need a deposit. If you hvae this, then use this money to fix car etc. and then get saving the money you have spent on loan repayments to top your deposit back up.

If you don't have a deposit, then getting a new loan won't make much difference, cos you'll need the deposit for the mortgage.

ANDY21

Thanks for your reply Paddyrg,

Yes i can get the extra 5000. I would hopefully have the 10% deposit as cash by then.

Thank you very much
Andy

paddyrg

ANDY21 wrote: »

Thanks for your reply Paddyrg,

Yes i can get the extra 5000. I would hopefully have the 10% deposit as cash by then.

Thank you very much
Andy

If you can get the deposit as cash, is it worth using that to clear the loan and then pay your deposit fund back at the same rate as the loan - you'll save money in interest, and can even earn a wee bit too? Just a thought!

ANDY21

Thanks guys
It's not something i absolutely have to do, i was just interested to know whether it was a viable option

ANDY21

paddyrg wrote: »

If you can get the deposit as cash, is it worth using that to clear the loan and then pay your deposit fund back at the same rate as the loan - you'll save money in interest, and can even earn a wee bit too? Just a thought!

I don't have the 12000 deposit at the moment, but hope to have it by early next year. Need to move out for my own sanity early next year. I know i might just be living in a bit of a dream world. Still something to aim for at the very least

paddyrg

It's a lot of cash to save, but totally understand about the sanity and needing to move out! Rental?

ANDY21

paddyrg wrote: »

It's a lot of cash to save, but totally understand about the sanity and needing to move out! Rental?

Thanks Paddyrg

Yes ideally i would like to buy, but if that isn't possible then i may have to consider renting.

Andy