Help - Advance Loan on Mortgage

Grecian123

Hi all,

I'm new to this forum, but I have been at my wit's end all day and I don't know what to do.

I've recently received an advance on my mortgage (10,000) spread over my remaining mortgage term with the intention to replace my central heating and get some new kitchen units. I have received the money, all is good. However, I'm still in the deciding phase of how I want to do my kitchen etc. How long do I have to spend the money?

Also, what happens if I get better quotes and I have actually borrowed too much? There's an early repayment charge. Do I have to repay what I haven't used?

I'm starting to have doubts as to whether I want to do the work now as it won't increase the value of my home. I know I should have had this all settled before I applied, but I wanted to ensure I had the funding to start with. If I don't decide to take on the work, I do have a credit card with a balance on it, but I know with the lender I'm with I'm not allowed to use the loan for debt consolidation. Ahhh, I don't want to have the money just sat there doing nothing, and I don't want to pay it straight back as there's an early repayment charge. What is scaring me is if I no longer want to do up my kitchen, central heating, it's going to look like I lied on my application. If I did pay off my credit card (6,000), it'll look like debt reconciliation.

I applied with the best intentions to do up my house, however, I'm having doubts as to if I want to actually change my house, yet I have received the advance already.

Any advice will be greatly appreciated.

Gaz83

You're probably worrying for nothing.

Are you planning on keeping up the repayments? If so, I wouldn't worry.

Your lender isn't going to send someone round the house to check you've done what you said you were going to do. They're not going to want receipts or anything like that.

What's the early repayment charge? If it's going to help your peace of mind, could you just suck it up and repay it?

Grecian123

Many thanks Gaz83.

The repayment charge is 3%, but I don't want to have forked out 300 quid immediately for a loan I didn't use. My main aim is to replace my boiler. This was mentioned in my application, but there would still be a lot left over if I didn't do up the kitchen.

I think the only way they would become suspicious is when it comes to renewing my mortgage in Apr 20, if I were to pay off my credit card in one go, they would see this on the credit file around the same time as when I had the loan. I suppose the one way round this is to simply increase my CC payments from 300 to 500 a month. Still paying it off, but at a quicker rate and not raising alarms.