Help plz

tegai1

Hi Guy's,
I need some advice.

I have a house valued at £117,500 and I am due to re-mortgage. My current balance on the mortgage is £90,000 and I have a personnal loan of £17,000 as well.
Now my question is should I re-mortgage for £107,000 which will clear all debt other than the mortgage or keep the loan going for its term (4 years left) and just get a £90,000 mortgage?

I do actually want to move house in the next year or so. So if I clear the loan I am effectively taking away the equity that would allow me to put a 10% deposit on the next house. (As I’m a contractor I must put a 10% deposit down on a mortgage).

Our current combined take-home pay is £4000 a month, with the existing loan being £390 a month.

Any advice is very welcome - just can't decide what to do as getting this annoying loan out of the way seems so tempting but I don't want it to leave me in a position where I won't be able to move house because of it. It almost feels that I would be worse off with no debts!

Thanks

MrsTinks

It is always a bad idea to make unsecured debt into a secured debt

Sorry too early for me for a more in depth explanation will try later

headinthesand_3

Although your £17000 debt will be taken into account when applying for a new mortgage, your income seems fine for size of mortgage you want.

Also it is very bad to convert unsecured to secured debt because in laymans terms they can't touch your house if its unsecured.

Hope this helps

CLAPTON

Given the state of the housing market you would be wise to assume that your house will be worth between 5 and 10% less next year than now.

If moving is important to you and you need 10% deposit then you will need to take that into account.

One would need to know that the APRs are and how much you can save over the next year to give any real advice.
On 4k income per month maybe you could look to saving as much as possible for an deposit if you refinance the loan or alternatively pay as much as possible to reduce the loan.