Bank won't allow extra cash on mortgage

Balamory

Hi All

Not really sure where the best place to put this but hope you can help.

My husband works full time and I am a full-time Mum. My husband earns about £14500 a year and we get tax credits of £250 a month and child benefit of £110.

Our mortgage is for £70000 and our house is worth approximately £110000. Our fixed rate with the Coventry Building Society at 4.2% runs out in January 2006.

We wanted to borrow an extra £10000 for home improvements but they will not allow it on our income. When we originally got our mortgage we were both working full-time.

Should we try and get the £10000 as a personal loan or try elsewhere for an £80000 mortgage and move from the Coventry.

Thanks for your help.

gravitytolls

If the bank won't lend on the value of your home, and your income, it could be they fear it will put too much financial strain on your household income......So maybe you should reconsider borrowing at all; or borrowing less.

Also, I've read several reports recently suggesting that the base rate will have to rise to at least 5.5% this year to maintain inflation at 2%, so I'd hang on if I were you, and see what happens.

We took out a loan last year to clear credit cards etc., and have cancelled the accounts to prevent increasing the debt. We have one card with no fees or balance, cared for by the inlaws just in case the car blows up.

Our aim is to have only a small mortgage in 8 years time, no other debts and then we can pay a little extra off the mortgage to clear it before we're really old a decrepid.

Good luck.

Balamory

Thanks gravitytolls for your advice. Yes, maybe wait a few years as the things I want doing are not urgent.

Joe_Bloggs

@Balamory
Do you know what the rate changes to after your 4.2% runs out ? You may have to come up with some money to get a better deal at around Christmas. This is often a task far beyond the majority of consumers.
Coventry SVR sucks but it does not apply to many products as far as I can tell. The Privilege rate requires some kind of madness to find the privilege.
J_B.

Balamory

Hi Joe_Bloggs

As far as I know it is the standard variable rate but I will check this out. Think we will try for another fixed rate after this. Last time we had the fees added onto the mortgage so we didn't have to pay anything out at the time.