Advice on seeking additional borrowing on mortgage to clear existing debt

kiriwitton

Hi - I'm seeking additional borrowing on my existing mortgage.

I have a one-off chance to make a lump sum settlement to write off a NZ Student Loan debt from 20 years ago - and getting this mortgage extension is my only shot to do so. Should I be honest with the bank about what this is for, or say that it's for home improvements or similar, instead?

I have plenty of equity in my property, a good salary, and my credit rating is fine, but I consistently go over my overdraft limit on my current account and am therefore concerned about presenting my statements to the mortgage lender.

Can anyone give me some advice about what I should do, and how to maximise my chances of being approved for this additional borrowing?

Any help would be very very much appreciated!

Thanks,
Mary

Thrugelmir

Be honest in your application. If you are constantly over your overdradft limit. Then tackle this issue first. Speak to your bank and ask whether they will convert the overdraft into a loan with affordable repayments. The proviso being that the overdraft facility is then removed. This will at least address one potentially problematic issue.

kiriwitton

Thanks Thrugelmir. Good advice on tackling the OD issue first and to have a resolution plan there.

In my preliminary application I did say the borrowing was for home renovations which I'm regretting. I will think about how to rein that back but was initially worried about how the bank would feel about me borrowing money to send out of the country. Don't you think this would be a problem?

thanks

Mary