Loan or Additional Mortgage Borrowing

70sthrowback

Hi all, I am in the process of having a large extension done. I always knew there would be a shortfall to finish off the interior and had initially planned to get some additional borrowing against my Nationwide mortgage. However when I called them yesterday they explained that I would essentially be taking out a new mortgage product and hence the fees etc that are involved with that.

I did some sums over the weekend and I really need £15k, then anything else can be done over time. So this made me think of getting a personal loan instead which seems to be about a 3% rate for that amount of money. I have done the eligibility checker and its coming back positive. Can anyone think of a downside to raising the money this way?

For example, once we finish the extension I would like to remortgage as my current deal expires in May and hopefully see a good LTV change. But how much of a negative impact would a personal loan have on a mortgage application?

Thanks in advance

Gaz83

70sthrowback wrote: »

Can anyone think of a downside to raising the money this way?

You're not guaranteed to get a 3% rate on a personal loan.

70sthrowback wrote: »

For example, once we finish the extension I would like to remortgage as my current deal expires in May and hopefully see a good LTV change. But how much of a negative impact would a personal loan have on a mortgage application?

Thanks in advance

It will impact on affordability as you will have existing credit commitments.

70sthrowback

Thanks Gaz83, the affordability checker came back at 90% chance, I have a credit score of 999 and can easily afford the monthly repayments. So I am fairly hopeful it will be the advertised rate, but I know this is not guaranteed.

WRT to affordibility of the mortgage, completely get that. Are there any other negatives anyone can think of going personal loan v additional borrowing?

Thanks again