Home Owner Loan

4 Posts

in Loans
Hi all, I'm looking for a bit of advice in regards to borrowing more to do some bits around my house.
We moved home last year, porting my existing mortgage and taking out a second mortgage for the additional borrowing - both with HSBC. We intended on doing home improvements on a month to month basis with wages, but long story short, due to a massive lack of maintenance in the house over the years, we have several things going wrong at once that will need to be addressed quicker than our monthly spending will allow.
I have spoken to HSBC who have advised a home owner loan. £20k over 26 years at £74pm (total cost over the term £29k). On Martin Lewis' Secured Loans section of his website, he says that for additional borrowing a secured loan is NEVER the right option here.
I'm not sure what other options I have, as; an unsecured loan is too expensive - and my re-mortgage is not due for over 2 years with the early repayment charge (ERC) being around £2k. I was thinking of contacting the bank again to see if they could add the ERC onto a new mortgage, along with the additional borrowing of £20k to see if that works out any better, but I'm not sure if this is possible. To also note, the value of my home has gone up quite a bit since purchasing last year so I would be in a much more favourable LTV bracket when it comes to re-mortgaging.
Martin Lewis' words have made me more cautious over taking out this home owner secured loan, grateful for any advice.
Thanks.
We moved home last year, porting my existing mortgage and taking out a second mortgage for the additional borrowing - both with HSBC. We intended on doing home improvements on a month to month basis with wages, but long story short, due to a massive lack of maintenance in the house over the years, we have several things going wrong at once that will need to be addressed quicker than our monthly spending will allow.
I have spoken to HSBC who have advised a home owner loan. £20k over 26 years at £74pm (total cost over the term £29k). On Martin Lewis' Secured Loans section of his website, he says that for additional borrowing a secured loan is NEVER the right option here.
I'm not sure what other options I have, as; an unsecured loan is too expensive - and my re-mortgage is not due for over 2 years with the early repayment charge (ERC) being around £2k. I was thinking of contacting the bank again to see if they could add the ERC onto a new mortgage, along with the additional borrowing of £20k to see if that works out any better, but I'm not sure if this is possible. To also note, the value of my home has gone up quite a bit since purchasing last year so I would be in a much more favourable LTV bracket when it comes to re-mortgaging.
Martin Lewis' words have made me more cautious over taking out this home owner secured loan, grateful for any advice.
Thanks.
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Most people have no choice to take on a mortgage to buy a home, they couldn't afford it otherwise. Taking on additional loans means you have more debt, so more exposure should things go wrong and money becomes tight in the future. In this case you target the priority debt, the mortgage, as it's secured on property. If you have nothing left to pay the non priority debt, an unsecured loan, then so be it. You will not lose your home. If however your extra loan is also secured then you have no headroom if things get tight, they are both priority debts with the potential, albeit remote, to leave you homeless.
That's before you take into account the level of interest you will pay back of nearly £10,000