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Getting a Secured Loan and then remortgage?
Comments
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Firstly, I would like to thank you FireWyrm for your detailed reply however I would say it felt somewhat like you were talking down to me which is not needed when I come on here looking for advice.
It wasnt my intention to talk down to you, but I dont sugar coat it either. You asked for opinions.
Not strictly true. Halifax (who our mortgage is with) have not done a full credit search at all so doesn't show up on credit reports. In addition, since moving I have got a Nationwide FlexDirect account with a Credit Card with a £2800 limit on (with the aim of transferring some of the higher rate balances over).
hmmm.Yes, I agree it was a mistake but the house is only 15 years old and even for a full survey, the surveyor wouldn't have moved the previous owners posessions.
No, but he might have spotted those cracks in the conservatory and perhaps a few more things you havnt found yet. What is done is done, but for the future, a full survey is well worth the money.
Bet you can if you restructure your spending and budget obsessively. Come over the the Debt Free Wannabe board and post an SOA to get you started. We can offer real and practical advice on how to restructure your finances so you can start to get the most out of your money.
With the payments for the unsecured debt we currently have, we would not be able to save any money to do the work until the unsecured debt has gone.I'm not expecting a 'dream house' otherwise we wouldn't have bought the house we did but there's nothing wrong with wanting to find out what the cracks are in the conservatory and wanting a non-rotten kitchen.
True. But you cant afford it. You are planning to do with the work with money you dont have. It is a recipe for disaster. Wait. Most people have to do the same. It isnt a hanging offense if your kitchen has seen better days. It must have been good enough for you when you viewed the house. Annoying it may be, but your issues are cosmetic, not structural. The only time I would say 'heck yes' to a secured loan was to save the structure of the house.erm...because we want to put things in our kitchen cupboards without the cupboards being rotten,
How about a bit of basic DIY to strengthen the cupboards instead. Presumably, the previous owners had stuff in there?because we want to be able to shut the doors in the house,
The outside doors? If so, go ahead and secure those immediately. While you are at it, change the locks front and back if you havnt already done so - no telling how many people have a key floating around.because we want to have heating in rooms that currently have radiators that need replacing?
Did you bleed the rads and check the pressure on the boiler first? A boiler service will cost you about £200. Could be something as simple as an air lock. Why would you want to replace radiators unless you were sure this was the issue?Our current mortgage rate is 2.69% so pretty good.
For now. In two years, it wont be there anymore.The idea of doing home improvements now is to raise the value of the house a bit so when we come to remortgage, we will hopefully have made enough of a difference to increase the value to cover the loan as well within the 75% LTV.
It wont. The mortgage lender doesnt give a stuff what you did inside. They care only for the index value which is calculated against the sale of other houses of similar type and size. A certain level of basic decor is assumed. When you come to remortgage, they wont even set foot in your house to see all this expensive good work. They will only care that you have a secured loan which increases your LTV to at least 85% and will charge you the prevailing interest rate for that band at that time.I hear what you're saying but a) I would not simply 'walk away' from an unsecured debt and even then, there have been cases where lenders have obtained charging orders on their customers houses so it's not as clean cut as you make it out to be.
No, it isnt and they can also bankrupt you but secured loans are for mortgages only. It is bad practice to turn unsecured into secured unless your property or your life depends on it.I think you're unfairly generalising here. What's to say we will run up unsecured debt again?
Experience. Come over the DFW and ask anyone whether they have done what you are proposing and whether it worked for them. 90% will tell you it didnt work - it never does. I've done it 3 times myself. Things have a nasty way of cropping up. You pay off your unsecured debts, you roll it all into a secured debt, you run fine for a few months - and....the boiler breaks, the car breaks, the cat gets sick, there is a birthday, a wedding, you lose your job...in short, life.
Uh huh.The unsecured debt has been mainly to buy essentials for our first home.Since then we have worked hard to pay cash for everything else we've needed.
So, why do you have debt if you have paid cash for everything and why cant you pay that off first?
Very good. Best of luck with that.We will not need the unsecured finance once it's paid off and will be closing the accounts so to not be tempted.
In the meantime, feel free to completely ignore everything I have said - it is an opinion, but consider this - I am a voice on the internet with absolutely no vested interest or care one way or the other how you run your life. I only offer my experience, such as it is. I predict you will be back on DFW in a few years time, only with a lot more debt if you go down this path.Debt Free! Long road, but we did it
Meet my best friend : YNAB (you need a budget)
My other best friend is a filofax.
Do or do not, there is no try....Yoda.
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Then the work that's needed will almost certainly be superficial. How come the cupboards are so rotten?the house is only 15 years old
then don't give up - try again. I moved into a 130 year old house that needed work doing and I taught myself. It took way more time than money and has actually stopped me spending money on other pursuits.It's just hard because I'm absolutely rubbish at DIY (have tried before and failed every time)0 -
bertiewhite wrote: »Then the work that's needed will almost certainly be superficial. How come the cupboards are so rotten?
then don't give up - try again. I moved into a 130 year old house that needed work doing and I taught myself. It took way more time than money and has actually stopped me spending money on other pursuits.
Unfortunately we don't know why the cupboards are rotten. There's no water leaks or anything that we can tell so would need to check for damp, etc.
I wish I had the time to try and try again.0 -
I purchased my house (in sole name) in December, with a £114,000 mortgage. I was then approved, no questions asked, for a £6,000 loan from my bank in January at an APR of 5.8%. So what you're saying isn't always the case. Would depend entirely on the OP's credit history and borrowing track record.If you just completed on a mortgage, your credit rating is tinned for the next 6 months - banks wont give you the time of day, let alone a less than userous APR on anything bigger than a few hundred."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
My thoughts exactly. It would have to be a pretty special kitchen to improve the selling price of the house. Most people put in new kitchens when they buy a house. Or quite soon after.a shiny new kitchen would increase the ease of sale of your house but you are not looking to sell as you just bought it. It will add little to the value.
Spending £2k doing up a house does not add £2k to the value of the house though - I would be very cautious if I were you
A nice kitchen might make a house sell more readily, but it is unlikely to make the house worth more.I can afford anything that I want.
Just so long as I don't want much.0 -
I purchased my house (in sole name) in December, with a £114,000 mortgage. I was then approved, no questions asked, for a £6,000 loan from my bank in January at an APR of 5.8%. So what you're saying isn't always the case. Would depend entirely on the OP's credit history and borrowing track record.
Exactly. We thought about getting a smaller unsecured loan or a couple of credit cards but they would be increasing our monthly outgoings, not reducing them and therefore, whilst we could potentially 'walk away' from the debt if we experienced difficulties as FireWyrm said, that would be irresponsible.0 -
Exactly. We thought about getting a smaller unsecured loan or a couple of credit cards but they would be increasing our monthly outgoings, not reducing them and therefore, whilst we could potentially 'walk away' from the debt if we experienced difficulties as FireWyrm said, that would be irresponsible.
Do not turn unsecured debt into secured, ever. Even if your mortgage company would be happy with this, they will charge you valuation fees, solicitor fees (this is a far more serious legal procedure than you think) and anything else they can think of, including mortgage re-arrangement charges etc. You may feel that walking away from an unsecured debt is irresponsible, and that is laudable, but at least you cant lose your house over it if you lose your job. The best the social will pay is your mortgage interest, not your secured loan too and then, not all of that. If the debt is unsecured, you simply walk away with nothing more than a trashed credit rating(which is no bad thing)and a CCJ or two and that's it. If you have a secured loan, your equity is compromised (costing you more in the long run in interest overall), your debt is secured, the lender can force you to sell the house to repay the loan and if you lose your job, the benefits wont cover it. If you walk away from unsecured debt, your credit is tinned for 6 years - for a mortgage, it is 12.
This isnt just a normal loan that happens to be secured on property - it has far reaching implications, legally and financially.Debt Free! Long road, but we did it
Meet my best friend : YNAB (you need a budget)
My other best friend is a filofax.
Do or do not, there is no try....Yoda.
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Do not turn unsecured debt into secured, ever. Even if your mortgage company would be happy with this, they will charge you valuation fees, solicitor fees (this is a far more serious legal procedure than you think) and anything else they can think of, including mortgage re-arrangement charges etc. You may feel that walking away from an unsecured debt is irresponsible, and that is laudable, but at least you cant lose your house over it if you lose your job. The best the social will pay is your mortgage interest, not your secured loan too and then, not all of that. If the debt is unsecured, you simply walk away with nothing more than a trashed credit rating(which is no bad thing)and a CCJ or two and that's it. If you have a secured loan, your equity is compromised (costing you more in the long run in interest overall), your debt is secured, the lender can force you to sell the house to repay the loan and if you lose your job, the benefits wont cover it. If you walk away from unsecured debt, your credit is tinned for 6 years - for a mortgage, it is 12.
This isnt just a normal loan that happens to be secured on property - it has far reaching implications, legally and financially.
This is very good advice, but I just wanted to add one more thing to it. You seem to be taking firewyrm's comment about 'walking away' to mean forgetting about the debt and never paying it back. That's not it at all - if the worst happened and you got into a situation where you were completely unable to pay your debts for a time, that doesn't necessarily mean anyone would advocate you just deciding not to pay them. There are things you can do when you get into dire straits - get the interest frozen, make token payments etc. just until you get back on your feet, and then there's nothing to stop you going back to making full payments if you wanted to. There are people on this forum who have done this, and ended up paying back every penny they owe. This is the difference between secured and unsecured debt - you can't get that breathing space with secured debt, and you're risking your home. Just because you'd never walk away from a debt (an admirable quality), that's no reason to put yourself into a situation where your home would be at risk.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
so...I spoke to Norton Finance, just wanting a quote to weigh up our options. Norton Finance then passed me onto another company who then offered me a guaranteed loan of £10,000 (£7,000 less than I'd asked for) AND they want an APR of 46.9% over 6 years...they must be joking!0
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so...I spoke to Norton Finance, just wanting a quote to weigh up our options. Norton Finance then passed me onto another company who then offered me a guaranteed loan of £10,000 (£7,000 less than I'd asked for) AND they want an APR of 46.9% over 6 years...they must be joking!
Not good but potentially a useful indicator of where you are in financial terms.0
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