Early repayment of secured loan

catman-without_wings

Hi a quick question. I have decided to take a secured loan out on my property. This is not as foolhardy as it sounds.The house is worth upwards of £140,000, mortgage is under £18,500. However it urgently needs some work doing on it.This will have two effects firstly the value of the house will rise steeply and secondly we can then sell it(will really struggle at the mo).My question is if I borrow the cash over the smallest period available(5 years in this case) I would be looking to pay the loan back in approx 6-8months having sold the house. Will I be charged the loan amount plus 6 months interest plus a punitive two months interest or will they charge the total interest for the entire loan period? Please don't suggest an unsecured personal type loan its simply not possible.Thanks for reading this.

Rafter

You would only pay the penalty interest and the interest during the period of your loan, plus any up front arrangement fees and and early termination fees - check the small print!

The cheapest way would seem to be to get a fee free mortgage for a larger amount or a further advance from your current loan provider.

If your credit rating is that poor though then you may find it hard enough to get a secured loan, let alone a new mortgage, particularly if the property is in too poor a condition to value.

Good luck.

R.

CLAPTON

it will depends upon the T&Cs of the loan that you get.

catman-without_wings

Thank you. The house is not THAT bad! Aprox £8,000 of work will result in house going up in value by at least double that. Not taking this step lightly, this is in con junction with an estate agent and current prices for houses on this estate.

Butlers1982

You will usually pay 6% of the balance if you pay it off in the first year of the loan, what rate have you been offered?