Advice on remortgaging and borrowing more!

Nara

Hi all,

We want to borrow £10k to pay off our debts. At the moment we are currently on a base rate mortgage paying £589 a month. (our house is valued at £180,000 and we currently owe £120,000)

My first question is should I be truthful about the fact that I want to pay off our debts with this money? or should I say it is for home improvements? they seem reluctant to let us borrow money just to pay debts off, I can see their point but for us it will reduce our outgoing payments a lot, although I understand we will be paying more in the long term.

Our current lender will let us borrow the money but it is done as a seperate loan which is kinda annoying as it means having an extra payment going out and also having to worry about 'remortgaging' this payment every 2/5 etc years seperatly to our mortage.

Swapping lenders is an option as we aren't tied into this current mortgage but it is so mind boggling as the the amount of options it seems so much easier to make a phonecall and have it sorted with our current one. They have quoted about £60 a month extra for the loan, so looking around at other lenders I could probably get the whole amount in one mortgage a bit cheaper!

If I go with another lender and borrow the extra 10k how does this work?? do they pay off your current mortgage then pay the extra into your bank? I mean obviously you would have to tell them you want to borrow more then you owe?

Argg its all so confusing and I have been meaning to sort this out for months but everytime i start to look i get so muddled up! and im awful at decision making lol.

Any advice would be great??

Wh05apk

Assuming income etc is ok, there should be no issue remortgaging to another lender, you should be able to get a lower rate as well (who are you with, what is their SVR?)

They will repay your current mortgage, and you will get the balance to clear your debts.

If the process is baffling you, I would suggest you speak to a good broker, who will find the best deal for you, and "hold your hand" through the entire process.

Nara

Thanks for the reply, yes our income is fine no problems there. We are currently with Nationwide on 2.50%. I have found a couple of tracker deals for 2 years that would be the same monthly payment as what we pay now with the 10k included in that. But tracker is a risk I guess! but if we pay off our debts we would be freeing up an extra £300 a month so could afford to rise with the rates if they go up a bit, people keep saying they won't rise for a couple of years yet, but ofc no one can say for sure, its a bit risky i guess and im not good at risk taking lol.

I do have a broker I could speak too, I used him earlier in the year when we were thinking of buying another house so I might do that, but I have also read that sometimes the banks/building societys hold back deals that brokers can't get access too? so wanted to do a bit of research myself, but some of the companies that come up on the search sites i have never even heard of!

Also can you still apply for mortgages online/phone? My partner and I work alot so find it hard to make time to go to branches if they want a meeting and to see all the paperwork? which is one reason we haven't got round to sorting this out yet

Wh05apk

If you are with Nationwide on their 2.5% rate, I would stick with them, it's a great rate, ok the additional may cost a little more, but at least the main part will be on a good rate.

Nara

Thank you, should I be truthful and say its for paying off debts or say its for home improvements? Or does it make no difference in the long term ?:P

Wh05apk

Yes, otherwise they will assume you will be keeping the loans etc, and deduct that from your income to calculate what they will lend, borrowing a further £10k for debt consolidation should still be within their criteria.

Nara

True I didn't think of that ! I think my brain has fried spending a few hours looking at this stuff! Thanks for your help x