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Additional borrowing against house
Hi,
I'm looking for more information on how to borrow more, secured against a house. The MSE guide seems to not to have been updated recently. Is there another guide somewhere I missed specifically on borrowing more with more detail on the process and rules of thumb?
And more wisdom from the forums on general practicalities and limits would be appreciated. For example, talking to Barclays suggests that they need to know why I want the money and they will lend up to 85% of value of house if making house improvements, 80% for other reasons. Is this a rule of thumb for most lenders or is it variable?
What are common pitfalls and rejection reasons? How common is this product? Is there a substantial interest rate premium compared to standard mortgage? Any other nuggets, particularly from those in the industry/ brokers?
Comments
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Are you able to say why you want this debt secured against your mortgage? If it's because you are planning extensive renovation then fine. But if it's for consolidating debts from credit cards and other loans then it's really not a good idea. You should first look at other ways to deal with the debts rather than taking something that is unsecured and making it secured. Any responsible lending should tell you the same though sometimes a bank can be convinced to do something that is not in line with normal practices.
As I understand it a bank won't simply give you more money at the current rate but will either do a completely new mortgage at the current rates (& possibly not particularly attractive ones) or will have a bolt on for the extra amount at a significantly higher rate - closer to that for car loans etc. Again it may well come down to the reason for the additional lending.
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Four months ago the OP had £30k of credit card debt and was looking for a first mortgage:
Have you somehow obtained a mortgage in that time and are already looking to extend it?
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