Mortgages and debt consolidation

PeteWhite

Just been to two banks to discuss re-mortgaging and consolidating debts. The second bank we went to told us that the debts could only be consolidated over a 10 year period even if the mortgage was for 15 years! this was news to us, has anyone else heard of this?


Pete

amnblog

We were not in the meeting so it is news to all of us.

I suspect current underwriting age limits are been applied which differ from when you took the original mortgage.

Your option is, of course to seek another lender.

Think carefully however about consolidating currently unsecured debts against your home.

Funny_old_game

That is correct Pete. Pretty sure this popped up before, ANY debt consolidation has a max 10 yr term even if the main mortgage is over 20 years. I think it was a Halifax.

As opposed to not letting people do it, they are helping you otherwise your stretch the amount repaid over a silly period, outweighing the benefit of staying with them snd paying it off.

Thrugelmir

Lender is making a commercial decision. A request to consolidate suggests that you are poor at managing money. So the lender is reducing it's risk that you'll reoffend going forward.

PeteWhite

Annblog: That particular lender is third on our list so far, so not really in the running anyway. Not sure what you mean by "...underwriting age limits..." but I'm 46 and we're looking for a 12 year mortgage, so it "should" be paid off well before I retire.


Funny Old Game: we're only looking for a mortgage over 12 years anyway.


Thrugelmir: The lender told us it was a FSA directive, none of the other lenders/brokers we spoke to have mentioned this.


Anyway, I came here to ask about the 10 year debt consolidation limit, not to get criticised for being poor at managing money. Thanks for that.


Pete

JustinR1979

I have seen many posts by amnblog and thrugelmir - I think you're lucky to be receiving their advice, even if the truth hurts
They can only work with the info you give them, and tell it as it is.

kidmugsy

PeteWhite wrote: »

Anyway, I came here to ask about the 10 year debt consolidation limit, not to get criticised for being poor at managing money.

Don't be so childish.

kiddakidda

Debt consolidation into Mortgage is very much part of what many would term as the 'Bad Old Days'. I was involved in selling Mortgages in the early noughties and saw many borrowers go through the cycle of re-mortgaging and consolidating, racking up more unsecured/credit card debt and doing it again.

Some people hadn't even got through the penalty period on their current deals before they were contacting me again to consolidate!!................ It was a blinkin Mess.

It makes sense that lenders are putting restriction on the amount of time unrelated debt to the mortgage can be paid over and 10 years is still pretty generous.

With you having only 12 years left on the mortgage, how long did you want the consolidated term for?

Senior_Paper_Monitor

There is a tendency for bank staff lower down the chain to reply "it's an FSA - should be the FCA now - directive" (it's the airline equivalent of "because of security sir".


Its not a specific directive - however there are many FCA policies and guidelines which the banks are free to interpret (as part of their commercial policies) as they deem appropriate.


Limiting the repayment period on consolidated debt rather than adding to the full mortgage seems a responsible interpretation and policy.

PeteWhite

JustinR1979 wrote: »

I have seen many posts by
They can only work with the info you give them, and tell it as it is.

Agreed, but jumping to conclusions over my circumstances is not very helpful, is it?


Pete

PeteWhite

kidmugsy wrote: »

Don't be so childish.

Wow, thanks for the constructive criticism.