Mortgage in Principle, but rejected consolidation loan so worried

jamesd

Building_Surveyor, it's not a free exchange: rent is being paid and that is a cost that would be saved by buying.

Getting rid of the unsecured debt at high costs would be useful, though, as time allows. It's definitely not a secure situation at the moment.

Rapished

ok well had meeting with the bank this morning they say all is fine, the consolidation loan would be unsecured so more of a risk, the mortgage is obviously secured against the house, with us putting in the deposit the house value is far more than they have agreed to lend so we'd be in positive equity from the off on that one.

I feel your points about madness, sadly we're a family of four and need to obtain a property to grow in, renting for me is stupidity on the long term,

We will continue to use excess money to clear our debts but the bank have agreed to the consolidation in my name, saving us the interest from the credit cards plus making it a £230 less a month in expenditure.

We will continue with renting our BTL, and in approx. 7/8 years look to review that and maybe sell it to clear that completely, or continue with it until it holds enough equity to make us mortgage free early if that makes sense.

Our income is that, that we will have no caribean holidays and the Ferrari will have to wait but we can comfortably afford everything and have our personal debts gone within 3/4 years.

Am I mad?

Thrugelmir

The decision on the mortgage will be made by the underwriters. So you've potentially some hurdles to leap over yet.

jamesd

You're not mad, you seem to be making sensible enough decisions for your circumstances. Quite a bit more unsecured debt compared to savings and investments at the moment and that's not so good.

At the moment you're very vulnerable to things like unemployment or illness that would reduce income but time and diligent work on the debts and savings will help with that.

Do take care not to make any more credit applications between now and just after completion day. Mortgage lenders sometimes do additional checks just before completion, asking for things like copies of bank statements again and doing updated credit checks. So you need to keep things looking as good as possible until the move is done.

Please do let us know how things develop, particularly when you finally get to move in to the new place, assuming all goes well on the trip there from now on!

Rapished

underwriters?

We have the bank doing an value inspection of the property within the next week or so, the chap seemed to think that would be the only hold up if that come back relating to any defects etc, but there pretty sturdy ex local authority style houses so hoping all's good.

Many thanks for all the assistance, we have written letters to the credit people to disassociate and clear up some other bits, so that'll be done,

Worked out all expenditures and forthcoming plans

So fingers crossed but thanks again.

leveller2911

Rapished wrote: »

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I feel your points about madness, sadly we're a family of four and need to
obtain a property to grow in, renting for me is stupidity on the long
term,

Why do you think renting long term is stupidity?.

The common sense option is to pay down your personal debts with the savings you have, thus cutting down the money your losing via interest verses the interest (pittance) your savings are getting.

Remember you are receiving advice from mortgage advisors here and not financial advisors and as such tend to just give advice re mortgages ahead of general financial common sense advice.

Am I mad?

I don't think your mad but I do think your gambling. Do you feel lucky?.

Building_Surveyor

jamesd wrote: »

Building_Surveyor, it's not a free exchange: rent is being paid and that is a cost that would be saved by buying.

Getting rid of the unsecured debt at high costs would be useful, though, as time allows. It's definitely not a secure situation at the moment.

Completely depends on how much the rent is tbf. Mortgages costs and upkeep of a property isn't worthwhile for some. And if you get into negative equity your in an even worse position.

Personally I wouldn't save a large chunk of money knowing I still had debt hanging over my shoulders. Because When I factor in the debt I would feel like I haven't actually saved anything. That is my own personal opinion.

Thrugelmir

Rapished wrote: »

underwriters?

These are the people empowered by the bank, that have the authority to sign off mortgage offers. So they will look at the application and make a decision. Not the person sitting in the bank branch. Who more than likely hasn't a clue!

Rapished

Ok so not clear yet then, we're doing a 2 year fixed rate, so if all goes horrid, we could sell up and if market rises or stays put we'd have that chunk back out to re evaluate, but personal debts would be less than half the amount by then,

Its got a massive garage so I can always keep re arranging my tools if I have no money to do anything else, and grass wont cut itself, i'm hoping there will be the odd penny/pound lying around for a day trip or two.