adding 10 grand to my mortgage

acstokes

im in the fortunate position of having a £238/month mortgage, which is up for renewall.

I have circa 60k equity in my property and i want to take out a renewall for around 10k more than whats outstanding on my mortgage, so i have that 10k effectivly in cash.

is this a wise option? assuming i can make the additional repayments? what are the pros and cons of this? can i actually do this?

advise greatly appreciated.

property.advert

You'd think it was child's play wouldn't you but they'll likely want valuations and any fees they can think of.

If you have spare income to cover the additional debt, why lumber yourself with it over the term of your mortgage ? Would not a 4 year loan be better ?

ACG

If you take out a second mortgage or increase your mortgage, you will probably have to pay admin fees etc, but you will also have to pay interest on it.

If you dont need the £10k then it seems pointles to just have the money sat in your bank account.

John424

for 10k I would just use interest free credit cards or an unsecured loan.

_Andy_

John424 wrote: »

for 10k I would just use interest free credit cards or an unsecured loan.

Pretty crap advice given any unsecured loan is going to have a higher interest rate than secured lending.

betmunch

Stop trying to scare the poor guy, depending on the value of the property and the equity you could get it on a remortgage from a lender who doesnt charge fees, just the set interest rate. Its doesnt have to cost a fortune and secured lending is extremely cheap.

Any half decent Mortgage Broker could sort this out, or he could do it himself on the internet if he wanted.

This is of course assuming that the only issue with his application is the capital raising mentioned in the first post

acstokes

betmunch wrote: »

Stop trying to scare the poor guy, depending on the value of the property and the equity you could get it on a remortgage from a lender who doesnt charge fees, just the set interest rate. Its doesnt have to cost a fortune and secured lending is extremely cheap.

Any half decent Mortgage Broker could sort this out, or he could do it himself on the internet if he wanted.

This is of course assuming that the only issue with his application is the capital raising mentioned in the first post

Thankyou for your reply! seems like what id like to do could actually be a goer.

my mortgage as it stands is £59k, on a property valued a year ago at £110k, so in that respect their should be no trouble. my mortgage deal has recently reverted onto a b of e base rate tracker of sorts so i think i can still sign up to another deal if i want.

any further comments?

maninthestreet

_Andy_ wrote: »

Pretty crap advice given any unsecured loan is going to have a higher interest rate than secured lending.

An unsecured loan is likely to be over a much shorter time period then the OP's mortage has left to run, so may well work out cheaper in the long run.

opinions4u

acstokes wrote: »

Thankyou for your reply! seems like what id like to do could actually be a goer.

my mortgage as it stands is £59k, on a property valued a year ago at £110k, so in that respect their should be no trouble. my mortgage deal has recently reverted onto a b of e base rate tracker of sorts so i think i can still sign up to another deal if i want.

any further comments?

The key for me is to understand why you want to borrow and whar rate and fees you'll incur.

No point borrowing at, say, 6% and sticking it in a current account just in case.

property.advert

maninthestreet wrote: »

An unsecured loan is likely to be over a much shorter time period then the OP's mortage has left to run, so may well work out cheaper in the long run.

Exactly, which begs the question as to whether the OP can truly afford the shorter term repayments. If not, then raising extra funds via mortgage may be inadvisable as well.

Where is the OP's slush fund for 12 months bills and living expenses ? Probably a higher priority than borrowing more money unless already in place.

System

maninthestreet wrote: »

An unsecured loan is likely to be over a much shorter time period then the OP's mortage has left to run, so may well work out cheaper in the long run.

Unless you overpay and effectively clear the additional mortgage over the same time period you would have cleared the unsecured loan. (Of course depends on your mortgage and overpayment policy etc..)