Remortgage Advice Needed!

vixyno1

I have an outstanding mortgage of £71,000 (£57,000 secured mortgage and £14,000 unsecured, it was the Northern Rock Together deal), a £20,000 secured loan which was used for home improvements, £16,000 loan which was credit card consolidation and £6000 on credit cards. What would be my best options to consolidate this. My house is worth between £90000 to £95000 and I have 21 years left on my mortgage term.

_Andy_

If you're wanting a remortgage, you won't be able to consolidate all that together as it would mean borrowing more than the property is worth and that is no longer possible on today's mortgage market.

luckyfool

You might be able to remortgage and consolidate the mortgage and secured loan together (then your loan to value might be around 77%). You should be able to get a reasonably good rate on that if you move quickly. I would look at a good long term rate if you can such as a term tracker or 5 year fixed rate (only if you can commit to the tie in period though).

Once that is completed you would have to sort out the unsecured northern rock loan, where you will find the rate rockets if you retain it but repay the mortgage. One option would be to go for a higher loan amount on the remortgage to pay off some of the northern rock loan, e.g. 85% or 90%. Then you might only have £3,000 - £6,000 left on the Northern Rock loan which you could potentially pay off over a year or two. You would also have the option to tidy up that on a lower rate by paying it off with a credit card along the lines suggested in one of Martins articles.

p.s. The reason I don't suggest moving the mortgage and unsecured loan and retaining the secured loan is that it complicates matters in terms of the legal work, and you would require the secured loan providers permission to do that. In the current climate I think they would be unlikely to grant permission as their position would be worsened significantly by such a transaction.