HSBC Homeowners Loan

easty

I had a meeting with HSBC today to discuss a homeowners loan, which has been declined. They're going to refer it to see if they can make it work, but I'm not holding my breath.


I bought a house for £133k about 18 months ago, it was cheap for the area as it needed loads of work. I've spent £20k doing it up, but had to borrow this (personal loan and 2 credit cards). The houses on my street are now being valued at £160k, and selling recently for £170-172k. I owe £108k on the mortgage. So have about £50k of equity.


I'm paying £450 a month for the mortgage, but also £195 for the loan, and about £175 to the credit cards.


I was looking to consolidate this with an HSBC Homeowners Loan of £20k to pay off the debts and pay back one figure of around £100 a month. So in reality it's saving me £270 a month.


When HSBC run the numbers they say I can't afford it. It's not able to take into consideration that I'll use the money to pay off the debt. I understand where they are coming from, but is there any other option for me here? I absolutley do want the new loan to pay off the existing debt. There's no way to prove that though...is there?

[Deleted User]

No, not really. It would also cost you more in the long run, rather than saving you money.

Look for more modest ways to cheapen the debt, such as BT or MT cards. But maintain, or even increase payments, rather than reducing them .

easty

I'm just thinking about the here and now to be honest. I only expect to live here another 2-3 years, at which point the mortgage and homeowner loan would be paid off with profits on the sale.



With a homeowner loan, on top of the existing mortgage, it'd be in effect having "one mortgage" of £128k. That's manageable to me. £550 a month.



I'm finding it more difficult currently to save for anything, like a holiday or new clothes or driving lessons, as so much of the money is going on house costs. It's frustrating, given I have equity in the house. I could sell up and move, but I've just got it exactly how I love it.

foxy-stoat

You could easily shuffle £20,000 of credit card debt on 0% interest paying a few percent a monthly payments for 2/3 years. You be far easier and cheaper for you as well.

Get a money transfer card for the loan and balance transfer option for the other credit cards if they have interest.

If your looking for something bigger in a few years you will want as much equity in the property as possible and paying down the unsecured debt along the way.

easty

foxy-stoat wrote: »

You could easily shuffle £20,000 of credit card debt on 0% interest paying a few percent a monthly payments for 2/3 years. You be far easier and cheaper for you as well.

Get a money transfer card for the loan and balance transfer option for the other credit cards if they have interest.

I currently have a £10k bank loan, with balance of £8800, paying £192.50 a month.


One credit card with a balance of £6k, with a £6.2k limit. Paying £135 a month. Interest free til December.



One credit card with a balance of £5.7k with £6k limit. Paying £55 a month. Interest free til October 2021.



I'm not convinced I'd be approved for another credit card, nor that it would be the best solution.

foxy-stoat

easty wrote: »

I currently have a £10k bank loan, with balance of £8800, paying £192.50 a month.


One credit card with a balance of £6k, with a £6.2k limit. Paying £135 a month. Interest free til December.



One credit card with a balance of £5.7k with £6k limit. Paying £55 a month. Interest free til October 2021.



I'm not convinced I'd be approved for another credit card, nor that it would be the best solution.

I am not convinced you should be turning unsecured interest free debt into secured interest debt this year.

What is your interest rate on the loan?

easty

foxy-stoat wrote: »

I am not convinced you should be turning unsecured interest free debt into secured interest debt this year.

What is your interest rate on the loan?

I do get where you're coming from, but I'm not concerned about the unsecured/secured aspect. If my house was in the condition it's in now, I'd happily have taken out a £128k mortgage for it. That's how I'm looking at it. It'd still have been a great deal.



The interest rate on the loans not huge, 5.9%.

foxy-stoat

easty wrote: »

I do get where you're coming from, but I'm not concerned about the unsecured/secured aspect. If my house was in the condition it's in now, I'd happily have taken out a £128k mortgage for it. That's how I'm looking at it. It'd still have been a great deal.



The interest rate on the loans not huge, 5.9%.

That is great, but as your lender has declined your additional borrowing you are stuck unless you can remortgage to a new lender. If your fixed rate is coming up then speak to a broker with your numbers, they will be able to place you with the right lender.

easty

foxy-stoat wrote: »

That is great, but as your lender has declined your additional borrowing you are stuck unless you can remortgage to a new lender. If your fixed rate is coming up then speak to a broker with your numbers, they will be able to place you with the right lender.

The advisor at HSBC will get back to me next week with a final answer, but I can't see why the answer would change. I imagine these things are run through a computer, simple as that. Me saying I promise to pay off the debts with the loan is unlikely to make a jot of difference!


Once I've heard back I will be looking to talk to a mortgage broker to remortgage the property. I'm sure that'll be possible, but it all just seems a bit unnecessary. But, like I say, I do understand that it's all run through a formula on a computer. It is what it is.