Loan/Mortgage query

aliasojo

Just wondered why you can't get a consolidation loan to pay off credit cards etc and what's left on your mortgage, but you can get a remortgage to cover what's left on your existing mortgage and credit cards?

Is this standard for all lenders?

Assume all amounts (including mortgage balance) are small and loan rate is less than existing mortgage rate and would only be over 5 years.

Rafter

aliasojo,

Not sure I quite understand your question, but seems to be an issue around whether the loan is secured or not and over what term.

In general, unsecured loans are more expensive than secured loans (mortgages) and the longer the term the higher the rate potentially - depending on what is going on in the money market.

I think what you are highlighting is an anomoly in the market at the moment where unseucred loans are very competitive and at very low rates.

If you are on a standard variable mortgage with little term to run and a small balance outstanding, you could well pay less in interest if you could get an unsecured loan.

Some consolidation loans are in fact 'secured', effectively a second mortgage on your home.

If you have a great credit rating and good income, you could get an unsecured loan and then pay off your mortgage and credit cards. The lender might be curious about why you would use it for paying off a mortgage though and you might be better off stating home improvement as the reason for the loan.

R.

Robert_Sterling_3

Rafter wrote:

aliasojo, The lender might be curious about why you would use it for paying off a mortgage though and you might be better off stating home improvement as the reason for the loan.
R.

I would not advocate making a false statement on an application form.

HelenR_3

Robert_Sterling wrote:

I would not advocate making a false statement on an application form.

improving the home , by owning ALL of it , thats home improvment isnt it , in a way :cool: