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  • FIRST POST
    • Grazeley
    • By Grazeley 12th Apr 18, 9:54 PM
    • 29Posts
    • 6Thanks
    Grazeley
    Secured loan saga continues
    • #1
    • 12th Apr 18, 9:54 PM
    Secured loan saga continues 12th Apr 18 at 9:54 PM
    Evening all,

    Just wanted to sense check where my head is at right now please, thank you in advance.

    1.5 years ago we took out a 30k debt consolidation secured loan, i won't go into the background but we were very much pressured into this by a pushy 'financial advisor' and I was suffering from PND at the time and not on top form. I am fully aware how this was totally wrong so please dont feel the need to remind me consolidation never works, I am living that right now with debt back on the credit cards being chugged away at. Urgh! We are still reeling from the fact that spending £370 per month on the secured loan payments we've only paid off about £100 in 18 mths.

    My mortgage is due for renewal in 11 weeks. My gut says take the remortgage offer from my existing lender of a lower fixed rate which saves £200 per month. And then pay off the other debts and then start chipping away at the secured loan and perhaps look to absorb it into the equity in 2 years time at the end of the new fixed rate. Or pay some off with a 0% credit card or other lower interest rate option to pay it off.

    However, we could absorb it now into the mortgage - but i feel that loosing my equity and impacting my LTV and therefore offered mortgage rates on-going will be another smack in the face of this saga. But keeping it for even another day is chucking money in the bin.

    Hmm, I will post this in mortgages too.

    Thanking you.
Page 1
    • antrobus
    • By antrobus 12th Apr 18, 10:03 PM
    • 15,512 Posts
    • 22,146 Thanks
    antrobus
    • #2
    • 12th Apr 18, 10:03 PM
    • #2
    • 12th Apr 18, 10:03 PM
    ....
    However, we could absorb it now into the mortgage - but i feel that loosing my equity and impacting my LTV and therefore offered mortgage rates on-going will be another smack in the face of this saga.....
    Originally posted by Grazeley
    It's a secured loan. It has already impacted your equity and LTV.

    Unless you have some other asset it is secured on.
    • Grazeley
    • By Grazeley 12th Apr 18, 10:07 PM
    • 29 Posts
    • 6 Thanks
    Grazeley
    • #3
    • 12th Apr 18, 10:07 PM
    • #3
    • 12th Apr 18, 10:07 PM
    It's a secured loan. It has already impacted your equity and LTV.

    Unless you have some other asset it is secured on.
    Originally posted by antrobus

    Ok, thanks for that info. So it's a second charge secured loan, does that make a difference. It's not being taken into account to take out a new product with my current mortgage provider?
    • John-K
    • By John-K 12th Apr 18, 10:08 PM
    • 516 Posts
    • 732 Thanks
    John-K
    • #4
    • 12th Apr 18, 10:08 PM
    • #4
    • 12th Apr 18, 10:08 PM
    As above, the equity is already gone.

    Did you have a question?
    • Grazeley
    • By Grazeley 12th Apr 18, 10:14 PM
    • 29 Posts
    • 6 Thanks
    Grazeley
    • #5
    • 12th Apr 18, 10:14 PM
    • #5
    • 12th Apr 18, 10:14 PM
    As above, the equity is already gone.

    Did you have a question?
    Originally posted by John-K
    Sorry I don't understand?

    I have a £240k mortgage on a £320 property. So equity on this.
    Then £33k with another lender as a secured loan.
    • antrobus
    • By antrobus 12th Apr 18, 10:20 PM
    • 15,512 Posts
    • 22,146 Thanks
    antrobus
    • #6
    • 12th Apr 18, 10:20 PM
    • #6
    • 12th Apr 18, 10:20 PM
    Sorry I don't understand?

    I have a £240k mortgage on a £320 property. So equity on this.
    Then £33k with another lender as a secured loan.
    Originally posted by Grazeley
    Your equity is £47k. Your LTV is 85%.

    Your existing lender may not be concerned about the second charge, because it has priority.
    • John-K
    • By John-K 12th Apr 18, 10:24 PM
    • 516 Posts
    • 732 Thanks
    John-K
    • #7
    • 12th Apr 18, 10:24 PM
    • #7
    • 12th Apr 18, 10:24 PM
    Sorry I don't understand?

    I have a £240k mortgage on a £320 property. So equity on this.
    Then £33k with another lender as a secured loan.
    Originally posted by Grazeley
    Equity is the value of your house minus the loans secured on it. A mortgage is a secured loan, as is this second secured loan.

    You reduced the equity when you secured this loan on your house. Saying that you do not want to reduce the equity doesn’t make any sense, that boat has sailed already.

    You have £273,000 off loans secured on a £320,000 house. You have £47,000 equity.

    Now, enough of the semantics. You sound as though despite having added your loans onto your mortgage you are just building up debts again. Worrying about fiddling at the edges with these is not helping you; how do you intend to stop spending more than you earn?

    Keep down this road and that house will be gone in a few years. Disappeared, repossessed, emptied, and sold.

    Getting your expenditure below your income is an absolute priority.
    • MEM62
    • By MEM62 13th Apr 18, 9:24 AM
    • 1,527 Posts
    • 1,153 Thanks
    MEM62
    • #8
    • 13th Apr 18, 9:24 AM
    • #8
    • 13th Apr 18, 9:24 AM
    It would be prudent to look at your over-spending ahead of whatever financial arrangement you decide on. You have already consolidated debts once with a secured loan and then racked up unsecured debts again. You are already at the point where you are running out of equity in your property and future borrowing will cost you more you finances are looking stressed and you are seen as high risk.

    No point in further eroding the equity in your house to only end up in the same situation again. You need to get off the slippery slope.
    • TadleyBaggie
    • By TadleyBaggie 13th Apr 18, 10:03 AM
    • 2,705 Posts
    • 2,047 Thanks
    TadleyBaggie
    • #9
    • 13th Apr 18, 10:03 AM
    • #9
    • 13th Apr 18, 10:03 AM
    The OP posted their SOA on the DFW almost a year ago but little seems to have changed since then.

    http://forums.moneysavingexpert.com/showthread.php?t=5620146
    • MEM62
    • By MEM62 13th Apr 18, 12:00 PM
    • 1,527 Posts
    • 1,153 Thanks
    MEM62
    The OP posted their SOA on the DFW almost a year ago but little seems to have changed since then.

    http://forums.moneysavingexpert.com/showthread.php?t=5620146
    Originally posted by TadleyBaggie

    Actually it looks like things are worse as they now have secured their previous debt against the house and still lived beyond their means. The situation was recoverable a year ago with some pain but I guess they have yet to have their true light bulb moment.
    • jonesMUFCforever
    • By jonesMUFCforever 14th Apr 18, 5:49 AM
    • 24,636 Posts
    • 11,877 Thanks
    jonesMUFCforever
    Actually it looks like things are worse as they now have secured their previous debt against the house and still lived beyond their means. The situation was recoverable a year ago with some pain but I guess they have yet to have their true light bulb moment.
    Originally posted by MEM62
    Plus they seem to have an extra mouth to feed.
    What goes around - comes around
    give lots and you will always receive lots
    • Pixie5740
    • By Pixie5740 14th Apr 18, 7:35 AM
    • 11,928 Posts
    • 16,795 Thanks
    Pixie5740
    Did you take this advice given in one of your previous threads?

    You took financial advice when taking out this loan and by my calculations it will take over 100 years to repay the secured loan.
    • enthusiasticsaver
    • By enthusiasticsaver 14th Apr 18, 8:21 AM
    • 6,254 Posts
    • 12,386 Thanks
    enthusiasticsaver
    Sorry I don't understand?

    I have a £240k mortgage on a £320 property. So equity on this.
    Then £33k with another lender as a secured loan.
    Originally posted by Grazeley
    You have a first mortgage with your current lender which takes priority which is why they don't care about the second charge your secured loan provider holds.

    Your property is worth £320k and you have outstanding mortgage and secured loan totalling £273k so equity of £47k.
    Debt free and mortgage free and early retiree. Living the dream

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