Mortgage-free, so can't borrow against my home...

LDG_79 · 18 January 2020 at 12:39AM

Drowning under my unsecured debts, and the best solution I can come up with over and over, is using the home I own outright to take out a secured loan with a more affordable repayment amount each month. I'm aware of have to take on an undesirable interest rate as a subprime borrower, but it would still make life much more affordable.

The roadblock I keep hitting over and over is the fact I'm mortgage free.

Homeowner loans are, for all my searching, designed as a second charge product. This means I'd need to have a mortgage in place already, and aiming to unlock some equity.

Regular mortgage lenders won't offer their products against a home I already own and live in, unless remortgaging from one lender to another.

So I'm rather stuck. No product I can find out there will allow me to borrow against my home.

Can anyone help with product types or names, or lenders, who may be worth pursuing?

For reference - I'm 40, self employed, owned the property for 4 years without a mortgage, and it's worth approx 200k.

Thanks.

haras_nosirrah · 18 January 2020 at 12:47AM

You can take out a traditional mortgage on an unencumbered property subject to affordability and your credit file

LRmortgage · 18 January 2020 at 8:04AM

Assuming you have the relevant income and meet other criteria, a broker should be able to place this on a traditional mortgage for you.

ACG · 18 January 2020 at 9:21AM

A homeowner loan or secured loan is what we (brokers) generally refer to a second charge. That means it has to sit behind a first charge (ie a conventional mortgage).

You are looking at the wrong product, you need to be looking at a mortgage.

Having debt does not usually affect the rate. If you are paying late or missing payments, that would affect the rate. Depending on your income and the amount of debt you have, you may find some lenders decline you outright due to "debt to income" calculations lenders have in the background so it might not be a bad idea to speak to a mortgage broker.

haras_nosirrah · 18 January 2020 at 10:16AM

Speak to a broker. If you don't know any then read the boards here and pm one of the brokers who you feel gives good advice. Many excellent brokers post here

getmore4less · 18 January 2020 at 10:37AM

first thing to do is see if there are other solution and have a plan that does not repeat the problem.

post a SOA on the debtfreewanabee

https://www.lemonfool.co.uk/financecalculators/soa.php
https://forums.moneysavingexpert.com/forumdisplay.php?f=76

Mortgage-free, so can't borrow against my home...

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