Borrowing more money - what to say?

pimento

I wonder if the solution might be to sell a share in our house to a relative? I'm pretty sure I have at least one relative who would loan me the money but I don't want to ask. Selling a share to be paid back when we do sell (something that was always on the card once our son left home as we won't need a four bedroom house once he's gone). Surely that wouldn't be a problem?

Hm.

pimento

HappyMJ wrote: »

Go on holiday...you don't need a house.

That sounds simple. I wonder what it would cost to store a four bed house load of possessions?

holly_hobby

Thats a good suggestion, the problem is the property is mortgaged - which (apart from CGT issues etc) complicates the issue (plus there is a son, which may cause yet more nobbles).

Holly x

pimento

They have it all covered, don't they?

HappyMJ

pimento wrote: »

I wonder if the solution might be to sell a share in our house to a relative? I'm pretty sure I have at least one relative who would loan me the money but I don't want to ask. Selling a share to be paid back when we do sell (something that was always on the card once our son left home as we won't need a four bedroom house once he's gone). Surely that wouldn't be a problem?

Hm.

Your mortgage company won't allow that they'll require full payment of the mortgage. So your relative will have to lend you the money to clear your mortgage and another £25,000 on top plus any fees and charges and any lost interest as agreed.

HappyMJ

pimento wrote: »

That sounds simple. I wonder what it would cost to store a four bed house load of possessions?

£30 to £50 a week for a year. Sell off whatever you don't need.

pimento

So, in short, it seems to be impossible to cheaply step off the merry go round for a short while.

Bummer.

CFC

Pimento -

I am very sorry to hear of your situation.

Speaking as a normal human being rather than some kind of mathematical nutter, I suggest you avoid selling your house while your husband is ill, as moving is immensely stressful and frankly you both could do without any added stress.

I would avoid a personal loan.


I suggest that you ask for a 25k extension of your mortgage in order to 'refurbish and renovate'. After all, you have a nice house, it's time it was repainted and had a new bigger kitchen, isn't it? By the way, there is no legal obligation AT ALL to actually spend the money on that, you can spend it however you see fit - once you've received it, it's your money. Nobody asks you for any details on how you actually spent it. That's one hurdle out of the way.

I suggest you call your mortgage provider and ask them what the best deal is that they can do for you. As you have so much equity they will undoubtedly be falling over themselves to offer you money at a fairly reasonable rate. If you end up paying base rate plus 3% or even more on the additional mortgage, it's not the end of the world, is it?

Do not tell them you intend taking a sabbatical. After all, providing you can repay the mortgage there's no need and you haven't actually booked the holiday yet. Please don't have a tender conscience about this, your total borrowing is going to be 25% of what the house is actually worth, if the two of you fell under a bus even they would get their money back, so it's not really an issue.

Once you have your quote, you can look at how much you have got saved, how much your spending would be when on holiday,and work out if you could still afford the monthly mortgage repayments out of your savings while you are away.

If their quote is too expensive then switch providers and borrow more at the same time. I see HSBC recently offered a 2.99% five year fix for a £99 fee. It will require a bit of maths on your part once you have the quotes, but you will certainly be able to find something affordable. It could be though you prefer to stay with C and G and avoid the stress of remortgaging even though it costs you a little bit more.



If you can't afford the mortgage repayments out of your savings for the 6 months, then you might need to look at shorter holidays so you can keep some income, if you can, then you're sorted. Really, for you, what you can afford is the only limitation, ie whether you can keep you your increased mortgage payments while you are away for 6 months.

I wish you all the best, hope you get it sorted out.

jamesd

pimento wrote: »

I suppose I could move the whole mortgage to my bank (First Direct) and add some to it.

Forget that idea. FD will ask far too many questions, then refuse unless you repeatedly lie to them and they may well catch that when they look at your current account transactions. Similar for HSBC.

pimento wrote: »

My employer is very helpful and quite flexible so there might be a deal to be done regarding leave. Maybe we could take several shorter holidays rather than one long one and then I wouldn't need to do the leave without pay.

Unless you want an around the world cruise you'll probably find that you appreciate regular holidays of a month or so three or four times a year, mixing some paid and some unpaid leave. That's also likely to be relatively easy for your employer to deal with.

So far as the mortgage goes, now does seem like a good time to be extending the term to reduce the monthly payments and allow more free money for things such as pension contributions and general flexibility. If your income alone is sufficient then a remortgage to do that and perhaps add a little additional capital withdrawing for improvement work should be fairly readily doable. Better to do it with your current lender than FD or HSBC, or any lender other than FD or HSBC. However, BoE plus 2% is a good interest rate and you'd have trouble matching that without a significant fee. It still might well be worth doing, though, to get the money and payment flexibility.

As holly hobby mentioned, a personal loan then adding it in a remortgage is one route, and a nice long term gives you more flexibility.

Another is to sell the property sooner. With the son now 20 years old it's time to be thinking of that anyway. A bit of rent subsidising for a while beats keeping a larger mortgage and a remortgage while moving home and releasing some equity along the way is more likely to be acceptable to a lender. At least, you can expect that the lender would accept you keeping the current mortgage amount, so you'd free up any money gained from a reduction in property value.

A smaller place will also save you ongoing costs in council tax and utilities, particularly if you get or upgrade a place to be well insulated and efficient.