Remortgaging, shop around or...

Logmar

Hi,
I got in touch with my current provider today to see about additional borrowing and moving from my variable rate of 4.24% to a lower one. I wanted to borrow additional money to renovate our bathroom and take a chunk out of our credit card thus reducing monthly outgoings.
I was told they wouldn't let me borrow more but would still move me onto a reduce % rate.

Am I better trying with another provider?
I don't want to destroy my good credit score by asking several different mortgage providers.
Will a lender actually be able to prove what you've spent additional borrowing on?

muhandis

- "moving to a lower rate" I take that to mean a product transfer ie moving to a different product with the same lender without any additional borrowing or change in term.

- Do you know what the reason is for not letting you borrow more? Debt consolidation and home improvements are both acceptable reasons for additional borrowing so it is unlikely that these (by themselves) are the reason for the refusal but it also depends on the size of the debt.

- If they won't let you borrow more, it could indicate that you are on the edge of affordability calculations. Other lenders *might* be able to lend you more, but it is unlikely to be a lot more.

- In your place, if I wanted to check what options I had, I would get in touch with a mortgage broker to see what remortgage options exist. No danger of "destroying your good credit score"

Logmar wrote: »

Hi,
I got in touch with my current provider today to see about additional borrowing and moving from my variable rate of 4.24% to a lower one. I wanted to borrow additional money to renovate our bathroom and take a chunk out of our credit card thus reducing monthly outgoings.
I was told they wouldn't let me borrow more but would still move me onto a reduce % rate.

Am I better trying with another provider?
I don't want to destroy my good credit score by asking several different mortgage providers.
Will a lender actually be able to prove what you've spent additional borrowing on?

Logmar

Thanks for the reply,

Yes is the answer to your first question.

The way I see it is that if I pay off a large chunk of my CC and pay the rest off within the year I will be at least £250 'up' on what I am just now (I pay at least £250 to my CC each month) as far as I see this should improve my affordability score surely?

I have an appointment with a broker tomorrow morning so I will see what happens there.

stripeyfox

Logmar wrote: »

Thanks for the reply,

Yes is the answer to your first question.

The way I see it is that if I pay off a large chunk of my CC and pay the rest off within the year I will be at least £250 'up' on what I am just now (I pay at least £250 to my CC each month) as far as I see this should improve my affordability score surely?

I have an appointment with a broker tomorrow morning so I will see what happens there.

"If". The consolidation trap which many of us have fallen into, often more than once.

IF you pay off the credit card, then yes, you will have less outgoings. But the lender knows that statistically you are likely to fall back into the trap. Even if you pay it off, there is a good chance you'll carry on using it and end up owing more.

You may have the very best intentions of paying it off and closing the CC account, but there are many more example of people falling back into the trap than those escaping it.

dimbo61

Many credit card companies increase the amount you can have on your credit limit without ever asking the customer !
Why so you get into more debt and pay more interest.