Remortgaging to repay HTB, consolidate debts and borrow for home improvements in one go?

monkeysrevenge

Hi all

Seem to be hitting a brick wall with regards my attempt to repay my HTB loan with multiple lenders, due to affordability being lower by having other lines of credit.

In summary; our house is worth circa £500k at the moment, with a Halifax mortgage of around £200k. Help to buy equity is around £100k (20%).

We have a couple of loans for cars, and some credit cards all totalling around £30k at the moment, which we've spent on getting solar installed and a few other house related bits. We would also like to borrow around £20k for re-lay the drive and do up the garden.

Therefore my hope is we can remortgage £200k + £100k + £30k + £20k  = £350k, against our £500k house.

The issue is, nobody I've spoken to so far seems to be willing to do this in one go. Their policies seem to be that the HTB is to be paid back first in one application, then a further application put in for the additional borrowing after 6 months.

We have ample affordability if we consolidate our debts as part of the remortgage to £350k, but keeping the £30k borrowing in place takes us a below affordability (we lose £100k of "borrowing power" by having £30k debts!). Therefore on this point we are kind of stuck between a rock and a hard place.

Has anyone else tried to do this, and have an recommendation on how to go about this (aside from "pay off our debts first")?

Many thanks

kingstreet

Have you spoken only to lenders, direct?

I can't see any particular problems with this, but there would be certain lenders to avoid.

Mark_d

It sounds like to can't remortgage to repay the HTB loan whilst keeping your unsecured borrowing in place.

If you could remortgage not for £350k there's no guarantee that you would repay your unsecured debts, so that affects your affordability.

Is there a reason you used unsecured borrowing to finance your cards and home improvements?  If I needed to finance a £20k home improvement then I would release the fund through additional mortgage borrowing, as this is generally cheaper than taking out a personal loan.

Hoenir

monkeysrevenge said:

Has anyone else tried to do this, and have an recommendation on how to go about this (aside from "pay off our debts first")?

First step is to address the HTB Loan. Then take matters forward from there. 

Remember mortgage lenders analyse your borrowing activity over the preceding 72 months from your credit history. Trends tell the lender a lot about the applicants and their attitude towards personal money management.  Lenders look at the macro picture not the micro. Time heals as they say.