Loan or Remortgage?
A bit of help please -
I got my house at a good price as it needed work, and I'd hoped to consolidate the debts I'd accrued when renovating it by getting a homeowners loan from HSBC (my mortgage provider), but I've failed thier affordability tests. I naively expected that this would be ok.
There's no guarantee that I'll use the loan to pay off the debts from HSBC's point of view, so the affordability says it's too much for me. I understand where they are coming from, why should they just believe me that I'll use the loan in the way I said?
But, with that being the case - what can I do?
I pay around £400 a month in loan and credit card repayments at the moment. On top of my £452 mortgage payment. £850 a month.
If I'd been able to get the HSBC homeowners loan, I'd have been able to take my monthly payments down to around £600 a month. Clearly more affordable.
Are there any lenders who'll work with me, who'll basically accept that I'll use the money to pay off the debt? I've contacted First Mortgages to speak to an advisor there, but I'm waiting on them calling me back.
I'm also not sure if I'm better off remortgaging with extra borrowing, or just getting a secured personal loan for the debt consolidation?
I'm aware that over the course of the loan it'll cost me more to do this, and paying it off quicker is most financially prudent. I only plan to stay in this property a couple of years though. At which point I'll sell, pay off the outstanding mortgage debt and, if I have one, consolidation loan.
I got my house at a good price as it needed work, and I'd hoped to consolidate the debts I'd accrued when renovating it by getting a homeowners loan from HSBC (my mortgage provider), but I've failed thier affordability tests. I naively expected that this would be ok.
There's no guarantee that I'll use the loan to pay off the debts from HSBC's point of view, so the affordability says it's too much for me. I understand where they are coming from, why should they just believe me that I'll use the loan in the way I said?
But, with that being the case - what can I do?
I pay around £400 a month in loan and credit card repayments at the moment. On top of my £452 mortgage payment. £850 a month.
If I'd been able to get the HSBC homeowners loan, I'd have been able to take my monthly payments down to around £600 a month. Clearly more affordable.
Are there any lenders who'll work with me, who'll basically accept that I'll use the money to pay off the debt? I've contacted First Mortgages to speak to an advisor there, but I'm waiting on them calling me back.
I'm also not sure if I'm better off remortgaging with extra borrowing, or just getting a secured personal loan for the debt consolidation?
I'm aware that over the course of the loan it'll cost me more to do this, and paying it off quicker is most financially prudent. I only plan to stay in this property a couple of years though. At which point I'll sell, pay off the outstanding mortgage debt and, if I have one, consolidation loan.
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Comments
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Turning unsecured debt into secured debt is seldom a good idea. If something goes wrong, you could lose your house.
Can you overpay your loan / credit card? Even if you can throw an extra £50 or so at it every month, it'll make a massive difference on the amount of interest you're paying."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."1 -
Turning unsecured debt into secured debt is seldom a good idea. If something goes wrong, you could lose your house.
Can you overpay your loan / credit card? Even if you can throw an extra £50 or so at it every month, it'll make a massive difference on the amount of interest you're paying.
Dont go there, the other two threads have said the same but the OP is wanting to remortgage or consolidate.
I would waiting for your broker and remortgage to a new lender as HSBC cannot help you. If you take out a secured consolidation loan the rate will likely be more that your current loan, and turning 0% interest debt into interest debt would be a little crazy, and there will be fees for the secured loan, assuming HSBC allow it.
If your sole aim is to reduce your monthly expenses by £250 and sell in 2 years and clear it all then you will likely walk away with the same amount of cash, as you will be paying a lower amount to clear your debt in the meantime. Unless you save the £250 a month that you think you could save.
Good luck and let us know when your broker comes back with some results.0 -
foxy-stoat wrote: »Dont go there, the other two threads have said the same but the OP is wanting to remortgage or consolidate.
I would waiting for your broker and remortgage to a new lender as HSBC cannot help you. If you take out a secured consolidation loan the rate will likely be more that your current loan, and turning 0% interest debt into interest debt would be a little crazy, and there will be fees for the secured loan, assuming HSBC allow it.
If your sole aim is to reduce your monthly expenses by £250 and sell in 2 years and clear it all then you will likely walk away with the same amount of cash, as you will be paying a lower amount to clear your debt in the meantime. Unless you save the £250 a month that you think you could save.
Good luck and let us know when your broker comes back with some results.
Hi F-S, I know and yes that is my sole aim. I want to pay less each month at the moment.
The extra £250 a month I will have will allow me to do things I currently can't afford to do. I fully understand that paying off debt in the cheapest way possible is the best thing to do, but I want to enjoy my life too.
I've nothing but admiration for those who find the cheapest way of repaying thier debts and make it thier priority. It's not my priority though.
I am aware I've started two other threads recently, they're not exactly the same thing though. Sorry if it seems that way.
I'm really looking for advice around how to move forward with this. Do people here have experience of working with lenders who believe you when you say you want to borrow the money to pay off existing debt.0 -
I didn't see your earlier thread, I don't think, but it comes across very much as you want to have your cake and eat it. Meaning, you've already 'enjoyed your life' when getting into the debt in the first place. Now it's time to pay for it. You can't have it both ways.Hi F-S, I know and yes that is my sole aim. I want to pay less each month at the moment.
The extra £250 a month I will have will allow me to do things I currently can't afford to do. I fully understand that paying off debt in the cheapest way possible is the best thing to do, but I want to enjoy my life too.
I've nothing but admiration for those who find the cheapest way of repaying thier debts and make it thier priority. It's not my priority though.
I am aware I've started two other threads recently, they're not exactly the same thing though. Sorry if it seems that way.
I'm really looking for advice around how to move forward with this. Do people here have experience of working with lenders who believe you when you say you want to borrow the money to pay off existing debt.
There are some lenders who offer consolidation loans providing that the other debts are with the same company, because then they can close the other accounts off. I've never heard of this happening across different loan providers, though."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
I didn't see your earlier thread, I don't think, but it comes across very much as you want to have your cake and eat it. Meaning, you've already 'enjoyed your life' when getting into the debt in the first place. Now it's time to pay for it. You can't have it both ways.
There are some lenders who offer consolidation loans providing that the other debts are with the same company, because then they can close the other accounts off. I've never heard of this happening across different loan providers, though.
I don't think it's fair to say I've had my cake and ate it. The debt I have is entirley house costs. I spent £20k renovating and furnishing my house.
I'm not the sort of person who takes out a loan to go on holiday, or uses a credit card to buy loads of clothes. I'm sensible with money. I knew when I bought my property that I'd need to spend about £20k to get it how I wanted it, but I knew doing so would still make me money on the property. It will. I owe £108k on the mortgage, £20k in loans/credit cards. I could prob sell now for £175k though.0 -
The extra £250 a month I will have will allow me to do things I currently can't afford to do. I fully understand that paying off debt in the cheapest way possible is the best thing to do, but I want to enjoy my life too.
I've nothing but admiration for those who find the cheapest way of repaying thier debts and make it thier priority. It's not my priority though.
'Enjoying' your life is what got you into this to start with, but you haven't learned the lesson yet of not spending what you don't have.
To continue to 'enjoy' your life is only going to rack up even more debt, so you haven't yet reached that moment, which people normally call a 'lightbulb' moment when you realise that by continuing to spend more than you have affects your future life. So your 'enjoyment' is now affecting your future life.
Go to the debt free wannabe board, post your SOA, they may have some ideas where you can save and pay more towards the debt you have.
Adding your debt to a mortgage isn't paying less, in the long run, it's paying more, because for every pound you pay, you'll effectively be paying them double or more. It'll just seem like you're paying less because you're not taking a long term view.
Plus, if you did add it to the mortgage, what would happen is that you won't have learned any lessons about spending and you'll be back in a couple of years time with even more debt that you're desperate to consolidate.Shampoo? No thanks, I'll have real poo...0 -
'Enjoying' your life is what got you into this to start with, but you haven't learned the lesson yet of not spending what you don't have.
To continue to 'enjoy' your life is only going to rack up even more debt, so you haven't yet reached that moment, which people normally call a 'lightbulb' moment when you realise that by continuing to spend more than you have affects your future life. So your 'enjoyment' is now affecting your future life.
Go to the debt free wannabe board, post your SOA, they may have some ideas where you can save and pay more towards the debt you have.
Adding your debt to a mortgage isn't paying less, in the long run, it's paying more, because for every pound you pay, you'll effectively be paying them double or more. It'll just seem like you're paying less because you're not taking a long term view.
Plus, if you did add it to the mortgage, what would happen is that you won't have learned any lessons about spending and you'll be back in a couple of years time with even more debt that you're desperate to consolidate.
No, sorry but you've got the wrong impression of me.0 -
Taking a secured loan is very expensive route to take, the interest rates look attractive but the fees are average £3999 plus!!
Remortgage is the way forward for your situation, try some brokers than going to the big guys directly.
Also get a lower fixed period, say 2 years then you don't have to pay early repayment fees.
There are products that allow over payments (flexible payment plan) without incurring any charges.
You can use the comparison sites to get an average rates and costs. Speak to some of them.
Hope this helps.0 -
Taking a secured loan is very expensive route to take, the interest rates look attractive but the fees are average £3999 plus!!
Remortgage is the way forward for your situation, try some brokers than going to the big guys directly.
Also get a lower fixed period, say 2 years then you don't have to pay early repayment fees.
There are products that allow over payments (flexible payment plan) without incurring any charges.
You can use the comparison sites to get an average rates and costs. Speak to some of them.
Hope this helps.
Thanks, I have an appointment at one Mortgage Broker on the 28th Jan. I'll look around at others too.0 -
No, sorry but you've got the wrong impression of me.
That is entirely possible..I can grasp the wrong end of any stick without any help from anyone...
Okey cokey, in that case then, if your broker can't come up with something, head to the debt free board then....:)Shampoo? No thanks, I'll have real poo...1
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