Secured to unsecured

megoingmad

Hi, New to the forum but in need of some advice.
In 2004 we bought our home with the then Northern Rock and via a financial advisor he gave us various options but pushed the 100% mortgage saying we could use our deposit for other things... to us (20 yrs old at the time) this was too good to be true and we took it on !!! Anyway, as the years went by, my so called financial advisor did yearly assessments with us and we took out a 12000 secured loan to consolidate some credit cards etc... then my husband was made redundant and I was due to have our little boy so we moved to a interest only mortgage so we always paid them...this wiped us out and credit cards became the norm until my husband was fully employed again... but by then we had to go into debt management. Fast forward 7 years and we are back on track and comfortable but our house is now only worth £69950 and we owe Northern Rock £82000. We owe £64000 as part of the mortgage and £18000 secured. We neeeeeeeeeed to move and have had an offer on our home for £69000 but they won't let me sell as they want the secured part at the same time... obvious ! What are my chances of turning a secured into an unsecured loan so they can get a huge chunk back and I can pay monthy to get out !!
Any advice would be great... has anyone ever done this ?

maninthestreet

Any unsecured loan is going to affect your ability to pay off the new mortgage you will need for the property you want to buy.

Thrugelmir

How has the unsecured loan grown from £12k to £18k?

If you've got the money (or savings) to move house and fund a larger mortgage start overpaying the unsecured element.

There's no harm in 100% mortgages at the outset. Providing people understand what they are taking on and behave financially accordingly. Days of borrowing ever increasing amounts to pay back tomorrow are fast disappearing.

megoingmad

Due to us having to take out another loan to cover the money we had to use during the time my husband was out of work... The loan is secured not unsecured, I want to see if it is at all possible to move it to a unsecured loan.

At the time we had had our house valued at £92000.... now it only worth £69950

We are moving into rented for the next 4 years as we are both fully employed with a total income of £45000 a year so can afford to pay rent and have the rest in savings to start over again with a new mortgage. We are hoping to have paid a huge amount off.

Easy to say stay where you are but this is just not possible due to neighbours - this is a different story.
I just wanted to know if it was possible to change a secured to an unsecured ? ?

Many thanks

Annisele

megoingmad wrote: »

I just wanted to know if it was possible to change a secured to an unsecured ? ?

There's only really two (sensible) ways to do that. The first is to get the original lender's agreement to switch, and the second is to take an unsecured loan elsewhere in order to pay off the secured loan.

(Other ways include getting the house repossessed; I don't count them in the sensible options).

Edit: If you do switch to unsecured, you might find the interest rate goes up a lot, which would dent your ability to make savings. What rate are you currently paying on the secured loan?