Debt consolidation / home improvement loan

BrunoYMY

Hi. I took out a debt consolidation loan last September and now I’m looking to remortgage. My advisor seems to think the only thing harming my application is having a debt consolidation loan. I’m having a lot of work done at the house and was wondering if I took out a home improvement loan to clear the debt consolidation loan would it look better for me? 

Emmia

From a mortgage lenders perspective, both loans are debt that needs to be repaid alongside any remortgage deal, which affects affordability. 


Also, the home improvement loan amount is presumably higher than the balance of the consolidation loan, as you're looking to pay that off AND do work on your property?

Thrugelmir

How are you funding the improvement work on the property.  Accumulating more debt? 

BrunoYMY

My father in law is funding work on my extension and I’m hoping to remortgage to pay him back. However my advisor says I can only get a 80% max mortgage because i plan to clear debt with it. So I was wondering if I cleared debt under a home improvement loan it would allow me to go for 85-90% mortgage. 

mcpitman

BrunoYMY said:

Hi. I took out a debt consolidation loan last September and now I’m looking to remortgage. My advisor seems to think the only thing harming my application is having a debt consolidation loan. I’m having a lot of work done at the house and was wondering if I took out a home improvement loan to clear the debt consolidation loan would it look better for me? 

Debt = debt.

It tends not to be the reason for the finance, but the amount and speed of accumulation of debt that makes lenders edgy.

Thrugelmir

mcpitman said:

BrunoYMY said:

Hi. I took out a debt consolidation loan last September and now I’m looking to remortgage. My advisor seems to think the only thing harming my application is having a debt consolidation loan. I’m having a lot of work done at the house and was wondering if I took out a home improvement loan to clear the debt consolidation loan would it look better for me? 

Debt = debt.

It tends not to be the reason for the finance, but the amount and speed of accumulation of debt that makes lenders edgy.

Trends such as spend now,  pay later and later become evident from reported credit history.