Loan to pay off second charge?

Neverending_Story

Evening, so our situation is this.  A few years ago we needed a loan fast and due to my husbands circumstances we ended up taking out a second charge secured loan on our house.  The interest rate was far from ideal but acceptable.
Fast forward a few years and our situation is vastly better and I want to get rid of the second charge quickly.  There's about £9k left.  We have been making overpayments but it is not going down quickly enough.  We would like to remortgage when our rate is up at Easter and take out some money to extend the house.  We were told last year we couldn't remortgage with the second charge still in place to pay off the second charge but I am now unsure if that is true having seen some other threads. 

So the question is... can I take out a personal loan at a lower rate and over a shorter term to pay off the secured loan, thus enabling us to remortgage and take out some money, and probably repay the new loan early too?

Thank you

[Deleted User]

It's theoretically possible, but you'll need to both pass affordability and find a lender who'll accept the reason for the loan.

Try an application or two but keep your expectations low.

Neverending_Story

Deleted_User said:

It's theoretically possible, but you'll need to both pass affordability and find a lender who'll accept the reason for the loan.

Try an application or two but keep your expectations low.

Thanks.  The affordability isn't a problem.  I don't want to apply for things and get rejected as I would like to keep my credit history clear if possible, so I am just fact finding right now.

[Deleted User]

The affordability could well be a problem, as you'll be assessed on having this loan on top of your existing ones - so £18k of loans plus the mortgage plus anything else  

A search or two will have little impact on your credit history.

Neverending_Story

Deleted_User said:

The affordability could well be a problem, as you'll be assessed on having this loan on top of your existing ones - so £18k of loans plus the mortgage plus anything else  

A search or two will have little impact on your credit history.

Thanks, but as I said, affordability isn't a problem, I just want the loan to go down faster and if I can pay less interest it would be better.  I might try and call a few places tomorrow to see what they say first.

ItsComingRome

Neverending_Story said:

Deleted_User said:

The affordability could well be a problem, as you'll be assessed on having this loan on top of your existing ones - so £18k of loans plus the mortgage plus anything else  

A search or two will have little impact on your credit history.

Thanks, but as I said, affordability isn't a problem, I just want the loan to go down faster and if I can pay less interest it would be better.  I might try and call a few places tomorrow to see what they say first.

It may not be a problem to you but it may be a problem to any lender, who will have to take your existing commitments into account when assessing affordability.

Having said that there's not really anything to lose by doing this.  Your affordability will be unchanged and you'll get the secured debt noose off from around your neck.  It may also be cheaper.

steampowered

If you have a personal loan, mortgage lenders will look at that when they are calculating how much mortgage they think you can afford.

For credit cards, most lenders will use 3% of the balance each month as a monthly commitment.

Taking a personal loan to pay off the second charge makes a lot of sense. Especially if the second charge is running up statutory interest? This can be as much as 8%. You might even find that a personal loan has a cheaper interest rate. 

I would hold off extending the house until you have saved up for it. It sounds like you have been racking up debt while paying your current mortgage. Taking an even bigger mortgage sounds like a recipe for disaster.