Further advance to pay off loan for home improvements

Millenifail

Hi,

Firstly, apologies if this has come up before - I didn't find anything searching.

TLDR: we took out a loan/credit to do the house up, intended to take out a further advance to cover it once our mortgage reached six months, now realising that we may have made our affordability look bad, even though we'll be paying off that debt.

We bought a place six months ago. It was in need of some modernisation and modifications to make it work for us; biggest jobs: new boiler/central heating, upstairs rooms plastered, kitchen/dining/living room knocked-through for open plan, new kitchen, new carpets upstairs, new laminate downstairs.

We took out a 20k loan to get us started, and spent another 10k on credit on top of that, covering stuff like materials and appliances. We bought a house well under our budget, and we have decent incomes, so this all feels comfortable. That said, my wife was on maternity leave for our first five months here, and we racked up more debt than we intended (seemed to happen both times she went on matt leave). Researching further advances now, I am realising that we've possibly done this a bit !!!!!!-backwards, and should have waited six months to get the money from our mortgage lender, rather than taking a loan, since we've potentially tanked our borrowing criteria.

So now we are looking to do a further advance to cover that borrowing. On the application, it is very happy for me to put down "home improvements". However, if I am being most truthful, the further advance is covering unsecured debt. This obviously triggers all sorts of red flags for the lender, not to mention puts a 10k cap on borrowing.

I want to be honest with the lender. I also think we are making a sensible decision: the house has gone up in value 15k without taking into account improvements; the additional borrowing will not take us past 85% LTV; a further advance is far cheaper debt than the loan/credit, thus making us safer borrowers.

Any advice? Should I put the loan purpose down as home improvement? This is not untrue, but equally, if I had to explain it to an underwriter, I'm aware I could sound shifty. I can't believe that we would be the first people to do this, or that it would be preferable from our mortgage providers perspective to leave us paying unsecured loans/credit when we've added value to the place.

Ideally, I'd like to talk to someone at the lender to explain this, but equally, I don't want to ruin our chances and be left with the unsecured loan.

Sorry for the essay, any advice appreciated.

[Deleted User]

Are you borrowing to fund home improvements?  Or are you borrowing to consolidate unsecured debt on to your mortgage?  

I think its clear that its the latter.  Whether the lender allows you to reclassify if you can evidence that all funds were spent on the property is only something that can be answered by speaking to them or telling us the lender and maybe a broker can tell you their experiences. 

If the lender calls it debt consolidation and limits that to £10k then its your call if you tell the truth or not