Looking to remortgage - PCP/loan question...

[SPD14]

So, i'm looking to remortgage in May and would appreciate some advice regarding my PCP car deal.

I currently have £13k left on a PCP, so i'm looking to obtain a personal loan of £13k to pay off the car finance.

Will this affect our remortgage chances?

My wife is worried it will, but I can't see how it would as we're just swapping one £13k debt for another - maybe i'm being naive.

FYI - We both have excellent credit ratings, the house is worth £340k and we currently have £203k left on the mortgage.

Any advice is appreciated!

[Marcellus]

Probably not but when we did it someone suggested we said "home improvements" as opposed to "buying a car", same difference as in the mortgage company are still going to have to pay your existing provider their settlement figure and you the balance but it's perceived as you being more sensible and investing in the security!

[SPD14]

Marcellus said:

Probably not but when we did it someone suggested we said "home improvements" as opposed to "buying a car", same difference as in the mortgage company are still going to have to pay your existing provider their settlement figure and you the balance but it's perceived as you being more sensible and investing in the security!

Thanks for the reply.

I've just realised that my OP was a bit misleading.

The remortgage would be to free up money for a house extension. We'd be looking to release approx. £80k of equity.

The £13k loan would be to pay off the PCP car finance.

My main question is, would the mortgage companies freak out over me applying for a £13k loan just 3/4 months before remortgaging? I'd still have the same amount of debt showing on my credit report, but it'd be a loan rather than the PCP car finance.

[Over over under steer]

Different suggestion. Have you considered increasing the amount you're taking out through the remortgage to cover the cost of the car, instead of having two separate loans.

You might find that the rate you get on the mortgage is preferable, and you can make overpayments if you wish to accelerate the repayment of the car portion.

You wouldn't specify that part was to pay off car, instead all for home improvement.

[SPD14]

It’s a good idea but we need the full £80k for the extension, plus the PCP runs out in March so it really needs dealing with separately.

If it was up to me I’d leave the remortgage ‘til June/July but my mrs is insisting on it sooner unfortunately

[Killer2005]

SPD14 said:

Marcellus said:

Probably not but when we did it someone suggested we said "home improvements" as opposed to "buying a car", same difference as in the mortgage company are still going to have to pay your existing provider their settlement figure and you the balance but it's perceived as you being more sensible and investing in the security!

My main question is, would the mortgage companies freak out over me applying for a £13k loan just 3/4 months before remortgaging? I'd still have the same amount of debt showing on my credit report, but it'd be a loan rather than the PCP car finance.

Nope.

[Sarnie]

SPD14 said:

So, i'm looking to remortgage in May and would appreciate some advice regarding my PCP car deal.

I currently have £13k left on a PCP, so i'm looking to obtain a personal loan of £13k to pay off the car finance.

Will this affect our remortgage chances?

My wife is worried it will, but I can't see how it would as we're just swapping one £13k debt for another - maybe i'm being naive.

FYI - We both have excellent credit ratings, the house is worth £340k and we currently have £203k left on the mortgage.

Any advice is appreciated!

One credit search won't hurt unless your credit was/is borderline........

[SPD14]

I thought not. Both my wife and myself have excellent credit history, so fingers crossed it’ll be fine!

I truly hate mortgage time, it’s an absolute stress-fest!

[Sarnie]

SPD14 said:

I thought not. Both my wife and myself have excellent credit history, so fingers crossed it’ll be fine!

I truly hate mortgage time, it’s an absolute stress-fest!

Find a good broker then!

[Edible Roadkill]

Each time you apply it puts a hard search on your credit file. This is what the mortgage company may oppose.

Should be ok to do the loan now though if the mortgage is in May. I’d leave myself at least 3 months before any new credit application