Helping my parents with financial advice

cococoladebt

My parents are on a 5 year fixed rate (5.69%) into the 3rd year now with Natwest. They have noticed that HSBC are now offering a 5 year deal with 2.99% and they are looking to remortage with HSBC. Remortgaging with HSBC will slash their repayments by £330 a month.

To move over to HSBC will cost them £5,000 in fees to natwest. They have 75% equity in their home but I am concerned that their debts (£30,000 debts on 0%) and missed payments (4 in the last year but 4 only in 5+ years) will be an issue with HSBC?

I may suggest that they pay down as much of the debt as possible and continue to build on their credit rating and then apply to HSBC next July? They will then pay Natwest only £3,580 in repayment charges. What do you think?

ACG

Im not sure HSBC would accept them as it currently stands anyway. I wouldnt be 100% confident they would accept them in a years time either.

HSBC can be because of the rate and appear to be very selective with who they accept.

GMS

Are the missed payments on the mortgage or unsecured debts?

cococoladebt

Missed Payment on the unsecured debts.

opinions4u

I doubt HSBC would touch them with a barge pole.

Lavendyr

How can you be sure that HSBC will still have such a good deal by next July? That's ultimately the risk they would be taking by waiting...

getmore4less

Whats the plan for that debt?

If they have been missing payments then when those 0% run out won't they be stuffed?

Whats the follow on rate, full term, and mrtgage size.

What was the debt level 12, 24, 36 months ago

Senior_Paper_Monitor

My guess is the best advice you could give your parents is to sit down with a mortgage broker/financial adviser as soon as possible and come up with a tailored financial plan for what I suspect is a fairly limited period that they have the opportunity to address it effectively with any level of choice involved.

Thrugelmir

cococoladebt wrote: »

Missed Payment on the unsecured debts.

Suggest you sit down and see where they can economise in their personal budget.

£30k of debt and missed payments suggests that they are serious problems to be addressed.

cococoladebt

Lavendyr - Good point. HSBC Might not have the best deal.

Getmore4less - The plan is to pay off £15,000 by the end of the year and the remaining balance by the middle/end of next year. All the debts have been moved on to mother's name with 0%. If the debt remains by late next year then we can move the debts on to my father's name on 0%.

Thrugelmir - Payments were missed because dad forgot to make the payments and he went on a long holiday. Hence why I set up a direct debit on all the accounts.

Today Natwest have offered the market a new 2.95% 5 year mortgage. I will ask my dad to speak with Natwest manager to see how much it would cost to move over to this new deal. If we stay we Natwest I guess the bank won't do a credit check and new application? Now I do wonder how much it would cost to move to a different product with Natwest. (5,000 early repayment + 2,495 new product fee?

getmore4less

Still not answered what the debt has looked like over the last few years.

Don't think you can change product with the same lender paying ERC.