Loan application of £25k query

dmurray0

Hi,

We are getting an extension put on the house and need to borrow £25k. Finance wise, we are mortgage free and have roughly only £300 per month coming out of my account for TV, Rates etc. I've never had any adverse credit etc and my credit score when I checked with Experian a while back was good.

Basically, I see a handful of companies offering 7.4% for the loan e.g. Sainsburys, Tesco, Nationwide, M&S etc and from looking at the forums people with good credit scores tend to get mixed decisions from different companies. Are there any companies more "friendly" to getting a loan, and if so who are they?

I don't want to apply for the loan from one company, get turned down, apply to a second and so on.

Cheers,

Damien

AFK_Matrix

Try the Nationwide soft search as then it won't show up on your credit file but will give you a good idea if you will be accepted.

dmurray0

Just checked it and it comes up as 10.9%, not 7.4%. I take it other lenders will be applying the same rates too? Can't understand the increase as I've never missed a payment, always paid things off in time etc.

CLAPTON

try getting a mortgage at much lower rates

somethingcorporate

What is your income?

You'd need in excess of £50k to be able to get a £25k loan and have few other commitments. Being mortgage free obviously helps!

The mortgage route may be a good one to consider although it will secure the debt on your property (but have far better rates).

jonesMUFCforever

CLAPTON wrote: »

try getting a mortgage at much lower rates

This was my thinking too - get a mortgage, shop around for ones without any fees.

poppasmurf_bewdley

I don't think you would get a loan for £25k without it being secured. A mortgage via your own bank should be your first port of call.

chambta

somethingcorporate wrote: »

What is your income?

You'd need in excess of £50k to be able to get a £25k loan and have few other commitments. Being mortgage free obviously helps!

The mortgage route may be a good one to consider although it will secure the debt on your property (but have far better rates).

That's simply not true.

dmurray0

Cheers folks....never thought about the mortgage route...will do a bit of digging around...with the mortgage of only £25k and being mortgage free, would I need a 10-15% deposit or could I get a 100% mortgage?

pheonixrising21

dmurray0 wrote: »

Cheers folks....never thought about the mortgage route...will do a bit of digging around...with the mortgage of only £25k and being mortgage free, would I need a 10-15% deposit or could I get a 100% mortgage?

I wouldn't have thought that you would need a deposit. The "deposit" would be remaining equity left in your house once the loan is taken i.e. if your house is worth £100k and you want to borrow £25k against it, you already have (in essence) a 75% (£75k) deposit.

I believe a 100% mortgage refers to when you borrow the entire value of the house in order to buy it (100% loan to value), or in your case to borrow the entire value of a house you already own. I don't think it refers to a percentage of the amount you want to borrow.

dmurray0

Thanks for all the advice folks. Got verbally approved for the mortgage with my existing bank and getting all the paperwork sorted out this week. Repayment wise I am saving just shy of £4k in interest as my bank also had a £650 cash back offer on. That is paid at the start of the mortgage too so pays for my conveyancing. Thanks to everybody here for the advice :beer: