****HELP**** Remortgage or Secured Loan

DaveD1981

I am a "first-time poster" and was referred to this site by a friend who received some good advice from other posters on this site, i hope you can do the same for me!!!

I hope I won't waffle on to much, and will try to get straight to the point.

We are a young couple (23 & 26) and currently owe £123k on my house and have 23yrs left to run on the mortgage.

I have £23k of Credit card Debt (due to refurb of house and my ex fleecing me)

The House is worth £150k (local estate agents valued at £160k, 165k, and £170k but we beleive £150k is the realistic achieveable price.

Early redemption until Dec '08 is £3600

My Salary is £30k + £5k Car Allowance + Mileage
My partner is currently on Maternity until Feb '08 and is on £115/wk. When she goes back to work, she will be on £12k.

My Questions are as follows:

Due to me having the creit card debt, am i correct to assume that I will be limited as to which mortgage deal is available to us?

Secondly, i have received an "agreement in principal" for a secured loan but would much rather have a remortgage to keep costs down. Is this my best option?

Thirdly, would i benefit from using a mortgage broker and if so, can anybody recommend a "fee-free" broker in the Gtr Manchester area (Failsworth)

In light of the figures above, i will be lloking at borrowing almost 100% of the value of the house. I this advisable??

I have never missed a mortgage payment but have missed a couple of credit card payments by only a couple of days. (my setup for automatic payments on internet banking didn't take into account the payment due dates landing over a weekend). My partners credit rating should be fine.

I am a bit naive when it comes to anything financial and would appreciate any help or advice you can give.

Thanks in advance for your help!!!

David

homer_j_3

I would try and hold out until December and remortgage at that point as you are going to have to pay the £3800 you mentioned if you go for the straight remortgage.

The secured loan option will normally be more expensive and seeing that you are so close to your deal ending, I would ask - is it feasible to continue as you are for 4 months without starting to miss payments etc.

Late payments should not show as arrears providing they are paid within the month due.

DaveD1981

Homer J,

Thanks for the reply. My mortgage doesn't actually finish until 2008 which is 16 months away and we really can't afford to carry on as we are for that long.

I have now ruled out a secured loan as this seems to be almost twice as much as borrowing the same amount on the remortgage. I have spoken with a mortgage broker earlier today and they are looking into my requirements.

Again, thanks for the reply and i will post how i get on.

homer_j_3

sorry, completely missed the 08 bit! I must try and stop posting between doing other things..

Yes please post back to say how you got on. Secured loans do have their place but often I find in the main - its the last resort!

MarkyMarkD

The problem with most secured loans is that they have high penalties for early redemption. As you can't afford to repay £23k over 17 months, you are in a bit of a difficult situation - if you take the secured loan over a longer period, you hamper your remortgaging opportunities in December 2008.

You haven't said how much you earn. If you DID get some short-term finance, would you be able to get a "normal" mortgage on your joint income in December 2008? And could you get a "normal" mortgage on your joint income right now?

It might end up being a toss-up between incurring the £3,600 now and taking a 100% type mortgage which you can then remortgage to a "normal" mortgage if your property value increases; and taking a secured loan now and then incurring penalties on the secured loan when you remortgage in December 2008.

Neither is a very appetising solution.

If anyone can suggest a short-term arrangement without stupid penalties, I'll be impressed!