Can anyone offer some advice?

Lodge

Hi Everyone.

Would love to hear your opinions/thoughts on this.

I have a mortgage with NatWest for 93K (22 years to go, property worth 170K)

I also have an UNSECURED loan - with NatWest- balance 28K.

I have a terrible credit rating due to having a couple of very bad years financially.

It's becoming difficult to make both payments each month (£650 Mortgage, £450 loan)

My thought is to consolidate the loan into the mortgage to drastically lower my monthly outgoings.

My question is this: Even though I have a really bad credit rating would they consider this as it would be making an unsecured loan a secure one?

Any thoughts/advice/experiences would be greatfully appreciated.

D..

Bismarck

Hi....would suggest you go over to the debt-free wannabees and they will shout "don't consolidate" at you very loudly.....unless you address the issues that made you create the debt you'll just recycle the problem with interest!...keep the £28K unsecured as long as possible would be the general advice as if it goes wrong your house is safer....can sympathise with why you want to do it and if your income supports the increased mortgage payments, I suspect NatWest would let you do it as you're securing their debt...and they probably frontloaded your loan with interest anyway....do you have a redemption figure for the loan - how far in are you and what interest rate is it?

Lodge

Not sure of the APR of the loan (will dig out paperwork later).

I hear what you're saying about not cosolidating but I can assure you I've seen the light and would not revert to my bad ways (but I guess everyone says that??!!).

I was thinking the same as you that Natwest would probably accept as it's securing THEIR debt.

Think I'll make the call and sound them out!

Any other experiences with this??

D.

_Andy_

When you say 'bad credit' - could you elaborate?

Thanks

Lodge

_Andy_ wrote: »

When you say 'bad credit' - could you elaborate?

Thanks

The usual story I'm afraid.

Defaults on a few credit cards.

Never missed a loan payment though and I had two months mortgage arrears which have now been "recapped" onto the balance of the mortgage.

Lodge

Just wanted to bump this one to the top!

Thanks.

Martin_T_3

Assuming you are currently on a repayment mortgage could you convert the mortgage to interest only and use any surplus money to reduce the unsecured loan?

cells

how about you sell the house for 170k, clear the mortgage and unsecured loan and start fresh with £50k in your pockeT? and also earning 270PM in interest?

are you on the lenders SVR?
becuase 650PM on 93K mortgage is 8.4% :eek: :eek: :eek:

Lodge

cells wrote: »

how about you sell the house for 170k, clear the mortgage and unsecured loan and start fresh with £50k in your pockeT? and also earning 270PM in interest?

are you on the lenders SVR?
becuase 650PM on 93K mortgage is 8.4% :eek: :eek: :eek:

The outstanding balance of my mortgage is 93K and it is an offset mortgage. I'm told the rate is 6.2%, so what should my monthly repayments be then?

Does it sound as though I'm being overcharged?

Thanks.
D.

PS: I would be reluctant to sell my property because in the current climate it appears to be increasingly difficult to get back on the property ladder once you get off.

Conrad

Lodge, I think Nat West could well decline your application, largely due to the FSA's 'responsible lending' initiatives. Thier compliance team will deem your home will be put at greater risk of repo by securing more debt, hence it wont meet 'responsible lending' rules.

You might argue it is more responsible and beneficial but that will not be relevant as there isnt a clause in the rules that accomodates the view you have about unsecured lending.

You might find an alternative lender willing to remo the lot but they again have to ensure you pass this new 'responsible lending' test and the overall rate might be high

Note that lenders like C & G now do adverse credit mortgages - a good broker will try all the options not just the usual sub prime sources.

Lodge

Conrad wrote: »

Lodge, I think Nat West could well decline your application, largely due to the FSA's 'responsible lending' initiatives. Thier compliance team will deem your home will be put at greater risk of repo by securing more debt, hence it wont meet 'responsible lending' rules.

You might argue it is more responsible and beneficial but that will not be relevant as there isnt a clause in the rules that accomodates the view you have about unsecured lending.

You might find an alternative lender willing to remo the lot but they again have to ensure you pass this new 'responsible lending' test and the overall rate might be high

Note that lenders like C & G now do adverse credit mortgages - a good broker will try all the options not just the usual sub prime sources.

In your honest, professional opinion am I better off keeping the loan UN secured and struggling through rather than secure it on my property, even though it will mean higher monthly payments?

Any advice appreciated.

Thanks.

D.