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Debt consolidation from a secured loan

Savathon
Savathon Posts: 5 Forumite
in Loans
Hi!

We have a secured loan with Nemo for £50k which we took out to cover the cost of an extension last year.

The term of the mortgage is 25 years. A high interest rate of 12%. Repayments costing us £540 per month.

We had hoped that our mortgage provider would agree to include this amount in a remortgage or additional loan, but not their policy.

Can anyone recommend other options whereupon we can consolidate this debt into a lower interest rate service. Our financial circumstances are thankfully good all round.

Regards,
S
«1

Comments

  • Gaz83
    Gaz83 Posts: 4,047 Forumite
    1,000 Posts Combo Breaker
    Savathon wrote: »
    Hi!

    We have a secured loan with Nemo for £50k which we took out to cover the cost of an extension last year.

    The term of the mortgage is 25 years. A high interest rate of 12%. Repayments costing us £540 per month.

    We had hoped that our mortgage provider would agree to include this amount in a remortgage or additional loan, but not their policy.

    Can anyone recommend other options whereupon we can consolidate this debt into a lower interest rate service. Our financial circumstances are thankfully good all round.

    Regards,
    S
    What's your income? How much is outstanding on the loan?
    "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."
  • Apples2
    Apples2 Posts: 6,442 Forumite
    If your financial circumstances are good, why on earth would you sign up for a 50k, 25yr loan at an eye watering 12% interest rate?
  • Savathon
    Savathon Posts: 5 Forumite
    Financial circumstances maybe good, but didn't / don't have £50k spare. Nemo was the only option at the time. Interested to know what options are out there now. Salary good. Not made any kind of dent on the £50k.

    Thanks,
    S
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    you are unlikely to get a unsecured loan for 50k anywhere.


    so your options are basically to re mortgage to a new lender if you own won't accommodate you.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    What's the current value of your property and how much is your existing mortgage?
  • Savathon
    Savathon Posts: 5 Forumite
    Property value £710k. Mortgage £434k. Tied into a fixed rate of 2.2% with current mortgage provider until March 2016.

    S
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Savathon wrote: »
    Property value £710k. Mortgage £434k. Tied into a fixed rate of 2.2% with current mortgage provider until March 2016.

    S



    approx. 50k at 12% for a year and 1/4 will be about
    50,000 x 12% x 1.25 = 7,500


    what is the penalty for breaking the mortgage early?
  • Savathon
    Savathon Posts: 5 Forumite
    Hi Clapton. 3% penalty.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    that would seem a penalty of 3% of 434k which is 13,020 plus of course re-mortgage fees


    so it doesn't seem a good option unless you would qualify for a lower mortgage interest rate.
  • Savathon
    Savathon Posts: 5 Forumite
    Probably best to sit tight until next year? Not withstanding making overpayments to the Nemo loan where possible? (No penalty for this.)
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