Consolidation & merge

Melanie_12

Hiya...abit of advice really...

I'm the one in our house that deals with all the financial stuff which has left me with 2 loans in my name (each with around 3k left to pay on them, need to get the final settlement amounts etc). I pay £150 a month on these each and they have 3 or 4 years on them left.

I now earn much less than my partner but my outgoings are (on paper) much higher because of these.

We are going to be applying for a mortgage later this year so I'm wondering if I should consolidate these loans into one JOINT loan for a smaller monthly outgoing and in both our names. (We're first time buyers)

I had a quick search (obviously would look harder) and I could get a loan to cover both over 5 years and pay not much more than £150 a month which would take my monthly payments down (Maybe more appealing to mortgage lenders?!)

Any help or direction is welcomed. !!!129322;

[Deleted User]

Don't pay less. Pay more to get it cleared and improve your affordability.

If you can shift it to a lower rate, the do that as well.

Dobbibill

Can your OH contribute to the loan - it makes no difference the name on the account if you are both willing to contribute to the payments.



There is no guarantee that you would get a better rate - give it a try by all means but don't stretch it out for the sake of it. A mortgage is a big commitment and the less time you have remaining on other commitments the better.



Consolidatation isn't ideal solution many believe it to be.



As FTBs you can both get the HTB ISAs to put some of your deposit savings too

Melanie_12

Hiya,

All our money is transferred from our personal accounts into an account that pays other bills and we spend from that. We have separate help to buy accounts and savings for our deposit so that's all sorted.

I was just thinking purely to spread the liability across both of our names rather than just mine as the bills that I'm responsible for are a much higher percentage.

We have (together)
- 2 loans which I pay out of my personal account (total £300 a month)
- credit card (0%) with a manageable amount on for the 'emergencies' (vet bill, car trouble etc..)
-car finance which he pays out of his account (£100 a month)

I need to check the fine details of time remaining and finance owed which I will do tomorrow and then look at quotes to see what comes back on that. This is purely for advice if people think what I'm thinking makes sense... It's all so confusing!! :rotfl:

DCFC79

Can he not pay more towards the car finance ?

Can you make any cut backs so theres more money to put towards the loans ?

Melanie_12

Due to saving, Paying excess towards our loan is not currently an option. We are looking to get a mortgage this year so it's essential we continue to save what we can to help.

The car finance only has a year left on it so we're going to continue paying that as we go.

The main question is....

Is it going to be more beneficial to Transfer the two loans that are in my name to one joint loan in both of our names?

The background is:
He earns more than me but due to me being the one that organises our finances I've got the loans and credit cards in my name. I am not looking to borrow more money and ideally not over a longer period of time. Im due to finish 1 loan in 2/3 years and then the other in 4.5. So if I took a loan over 4 years it won't be much different but may bring my monthly payments down (for the time being to help with securing a mortgage)

We're looking to get our mortgage towards the end of the year. We already have help to buy accounts and other saving accounts so I don't need help with that side of it.

DCFC79

Melanie_12 wrote: »

Due to saving, Paying excess towards our loan is not currently an option. We are looking to get a mortgage this year so it's essential we continue to save what we can to help.

The car finance only has a year left on it so we're going to continue paying that as we go.

The main question is....

Is it going to be more beneficial to Transfer the two loans that are in my name to one joint loan in both of our names?

The background is:
He earns more than me but due to me being the one that organises our finances I've got the loans and credit cards in my name. I am not looking to borrow more money and ideally not over a longer period of time. Im due to finish 1 loan in 2/3 years and then the other in 4.5. So if I took a loan over 4 years it won't be much different but may bring my monthly payments down (for the time being to help with securing a mortgage)

We're looking to get our mortgage towards the end of the year. We already have help to buy accounts and other saving accounts so I don't need help with that side of it.

The thing is lenders will see the new loan as extra debt and the apr may go up, they will have no idea of what you plan.

foxy-stoat

Melanie_12 wrote: »

Is it going to be more beneficial to Transfer the two loans that are in my name to one joint loan in both of our names?

I'll answer your question - if your applying for a joint mortgage then no it will make very little difference.

If your affordability it resting on you converting £300 a month payment on 2 loans to say £200 a month to 1 loan over a longer period then you probably are not in the best place to get a mortgage.

System

Melanie_12 wrote: »

Due to saving, Paying excess towards our loan is not currently an option. We are looking to get a mortgage this year so it's essential we continue to save what we can to help.

Oh dear.

One factor not considered is that outstanding loans will reduce the amount of money that will be offered by a mortgage company so you end up having to save more to have a larger deposit to make up for the fact the mortgage company won't lend as much because of the loan you've got. Might want to put that to your other half if they're hell bent on having the "Even though we're a couple, a team, I pay for mine and you pay for yours even though you earn a load less and it'll screw us BOTH over."

He earns more than me but due to me being the one that organises our finances I've got the loans and credit cards in my name.

I'm assuming that he benefits from the loans and the credit cards in some way or another even though it may not be directly? If so then it is very selfish on his behalf to expect you to pay for it all when he benefits.

More of a relationship issue. My neighbour is married to a bloke who has the "my money is my money", earns less than him and is expected to pay an equal share. He even did that when she couldn't work after having a child and took it to the point I had to help her defend against an eviction. Couldn't ever in a million years contemplate that way of thinking with my wife.

Melanie_12

You may have misunderstood, the only reason they're in my name is because I organise all the finances. Each month when he gets paid he keeps only the money he needs to cover his bills in his account and transfers the rest to another account which is in my name. I occasionally let him keep about of money to buy a new game! Haha

In relation to affordability I was just wondering if paying £200 a month out is better than £300 a month. We can afford the mortgage, bills etc as we're paying out now a simular amount and saving at the same time.

foxy-stoat

Melanie_12 wrote: »

In relation to affordability I was just wondering if paying £200 a month out is better than £300 a month.

It will make little difference if you have 2 x £1500 loans @ £150 per month each or 1 x £3000 loan @ £200 a month.

What are the interest rates on the loans ? If you take out another loan for 5 years you may find that the interest rate on a small amount and the purpose to pay existing debt puts you in a higher interest rate.

I would overpay where you can and clear the loans quicker.