Personal loans and remortgage

XEO25

Hi, I've just got a FTB mortgage and will look to get a better deal in 2 years, after my fix expires. 

I'm looking to take out a personal loan of 15k (over 5 years) now for home improvements, but had 2 questions...

1. When it comes to the remortgage in 2 years, how will the loan impact this? Is it just the repayment amount and how that impacts affordability, or does the size of the loan (remaining amount) matter too?

2. I've been 'pre approved' for a loan from RateSetter - is this a reputable lender and would lending from these be any worse than a big bank?

If it helps to know, the loan repayment is about 10% of my monthly income, and I'd be left with about 30% of my monthly income as disposable after all outgoings (including this new loan). 

Thanks

XEO25

Just following up on this to see if anyone can advise before the post disappears into the abyss!

Thanks

stek2008

XEO25 said:

Hi, I've just got a FTB mortgage and will look to get a better deal in 2 years, after my fix expires. 

I'm looking to take out a personal loan of 15k (over 5 years) now for home improvements, but had 2 questions...

1. When it comes to the remortgage in 2 years, how will the loan impact this? Is it just the repayment amount and how that impacts affordability, or does the size of the loan (remaining amount) matter too?

2. I've been 'pre approved' for a loan from RateSetter - is this a reputable lender and would lending from these be any worse than a big bank?

If it helps to know, the loan repayment is about 10% of my monthly income, and I'd be left with about 30% of my monthly income as disposable after all outgoings (including this new loan). 

Thanks

Can't advise as to the impact on future mortgaging but can confirm RateSetter are a reputable lender. I've used them 3/4 times over the years and had no issues - and generally good rates. You can pay back early and save money when able which is handy. 

They used to be P2P (so generating interest for other normal people investing with them) but are now fully owned by Metro Bank and all loans are now Metro bank's loan book. So in fact it is a big bank you'd be borrowing from. 

Windofchange

All about the numbers. A 15k loan for someone earning 100k per year is going to have a very different outcome to a 15k loan for someone earning 20k a year. Plenty of mortgage calculators online from all the big banks, so I would suggest putting your numbers into one of those and seeing what results come out the other side. I have found the Nationwide one to be pretty useful in the past, but there are plenty of others:

https://www.nationwide.co.uk/mortgages/mortgage-calculators/borrowing-calculator/

In terms of where the loan is from, I'd say as long as you are avoiding pay day loan companies and their ilk then the size of the bank is of no consequence.