Further borrowing - reasons

WeeThistle

Hi,

We applied for further borrowing on our property last week for home improvements.  We've since had a think about things and decided we might be better paying off our personal loans (both for cars) and then using our spare income to do the works on the house - it would save us some interest.  Do we let the mortgage provider know that we're now going to do this or do they not mind?  Thanks in advance for any advice.

neilwchad

I would say yes. It suspect any debt consolidation would limit or cap the extra borrowing amount I.e. LTV. If you intended to plough the money into the house they might look at it differently than saying buying a car/ holiday etc. 

I’m not expert, just going off what extra borrowing criteria with NatWest which I’m in the process of. 

MalMonroe

I assume your application was successful?

But in any case, I'm with neilwchad - always better to be up front and honest as interest rates, etc., could well be different.

WeeThistle

I'm still waiting to find out, I'm hoping I might know something this week but not sure how long these things usually take.  Will let them know thank you.

MattMattMattUK

If you tell them it is for debt consolidation there is a fairly good chance they will refuse outright. What you actually use it for after you get it will not be checked.

[Deleted User]

You are technically using it for home improvement just in a round about way , I would just leave as is , they won’t check what you use it for , aslong as monthly payments been made they will be happy 

MWT

WeeThistle said:

Do we let the mortgage provider know that we're now going to do this or do they not mind?  Thanks in advance for any advice.

Telling them it is to improve the property they hold security over and then using it for debt consolidation would be fraud.

The LTV limit and approval process is based on your declared use of funds, up to you if you decide to tell them or not, but be clear what you are doing if you don't...