Can we remortgage?

donald63

Hi,

The wife and I have been on a money makeover for the past couple of years after racking up huge debts. We have worked hard, knuckled down, cut the spending and now find ourselves in a position where we owe 25K unsecured debt - it was quite a lot higher before. We earn about 70K before tax and deductions.

our oldest is starting university in September. We would really like to help her so that she doesn't fall into the debt trap. We don't want her to leave uni with 50k of debt. our house is worth around 180K and we owe around 75k giving us approx 105k equity. We would like to remortgage and borrow an additional 25K to 'clear' the unsecured debts.I have done a few calculations on bank websites and the numbers look good.

Our current mortgage is with HSBC and on the website it says that existing customers can borrow more? Would this be worth a look or would a total remortgage be a better option?

We have no late payments etc. Even when our debts were higher, we were able to manage them and make the minimum payments.

kingstreet

Lenders don; tend to like further advances for debt consolidation. They'd rather sell you a secured loan instead. At a higher rate, of course.

You'll probably end up remortgaing. That's a new mortgage with a new lender on your current property where you borrow enough to repay the HSBC mortgage and your other debt.

Loan to value is key to this as I've just explained to someone else.

donald63

So with the additional 25k we would be looking at around 55% LTV. Would that be acceptable to most lenders?

kingstreet

https://forums.moneysavingexpert.com/discussion/comment/72201196#Comment_72201196

donald63

Thank you!

And my old life as a 'high debtor' wont sabotage this?

kingstreet

Some lenders have more appetite for such business than others.

An independent broker will be able to steer you away from the lenders which would have an issue.