Significant remortgage to repay loan?
Discussion
nomad5 said:
Could do with advice from anyone in the banking finance / mortgage side of things on this
Ok brief summary...
House built a number of years ago, £70,000 of father in laws money put in to the build.
Circumstances have changed and we now have a desire to repay the £70,000 to FIL by remortgaging.
Current mortgage = £130,000, house value around £350,000 - £400,000.
Affordability isnt an issue, LTV will still be within reasonably parameters, however we are a big "jumpy" about how to approach the bank for a remortgage? We are maybe 2 years in to a 5 year deal, so moving bank right now probably isnt an option.
Do we just say that £70,000 was borrowed from a family member at the time and now we want to remortgage to repay it OR will that cause all sorts of alarm bells to go off with them or will they not be that bothered? Will they make any stipulations as to who the money is paid to?
Thanks in advance
You need a further advance, not a remortgage........their response will depend on your circumstances and their lending criteria..............expect them to class this as debt consolidation................Ok brief summary...
House built a number of years ago, £70,000 of father in laws money put in to the build.
Circumstances have changed and we now have a desire to repay the £70,000 to FIL by remortgaging.
Current mortgage = £130,000, house value around £350,000 - £400,000.
Affordability isnt an issue, LTV will still be within reasonably parameters, however we are a big "jumpy" about how to approach the bank for a remortgage? We are maybe 2 years in to a 5 year deal, so moving bank right now probably isnt an option.
Do we just say that £70,000 was borrowed from a family member at the time and now we want to remortgage to repay it OR will that cause all sorts of alarm bells to go off with them or will they not be that bothered? Will they make any stipulations as to who the money is paid to?
Thanks in advance
Sarnie said:
You need a further advance, not a remortgage........their response will depend on your circumstances and their lending criteria..............expect them to class this as debt consolidation................
Why is it debt consolidation when in fact it is for home improvements paid for as it happens a long time after the fact? Debt consolidation really f
ks borrowers as Mortgage companies appear to go computer says no Welshbeef said:
Why is it debt consolidation when in fact it is for home improvements paid for as it happens a long time after the fact?
Debt consolidation really fks borrowers as Mortgage companies appear to go computer says no
Because what he wants the money for is to repay a debt he owes..............pretty straight forward!Debt consolidation really f
ks borrowers as Mortgage companies appear to go computer says no Sarnie said:
Because what he wants the money for is to repay a debt he owes..............pretty straight forward!
But play it the other way roundHi mr Bank I want to replace my kitchen and bathroom it will cost £x can you help?
Bank ok LTV and affordability calls met agreed
Or
Hi Mr Bank I’ve done my kitchen and bathroom it cost me £x (exactly the same as above) can you help?
Bank - slow down this is debt consolidation we don’t like that we don’t want you to compound the cost and not understand the compound interest implications
Oh but I do understand it it’s patently clear what’s the issue LtV and affordability all the same as had I asked you in advance?
Bank hmm you know what we don’t like it
Ok then thanks for nothing I’ll get a couple of personal loans instead (which are all pre approved). So me Bank you’ve actually cost me MORE due to your idiotic binary position.
It’s bloody daft we all know it. Common sense has to be there.
In this exact example how can it be debt consolidation? He has no debt no contract nothing on any credit reports instead it’s a verbal agreement. In fact if he dipped his toes with a high level question to test the water he might find doing it this way wouldn’t work so then he can simply lie/Male the story fit “weee going to have a new kitchen and bathroom fitted it will cost £x” they would never visit the property pre and post and never request the receipt for the works done.
Heck a simple way round it is to offload debt to bank of Mum and Dad what a couple of months for credit reports to clear then go to mr bank debt.. what debt I only have mortgage and have no outgoings (agree an Anniston with parents on payment until the cash is cleared).
This happens and he daft system forces people’s hand - these crazy rules can make people stick on higher rates as they cannot pass existing affordability rates yet have don’e for say 12 years plus rare going for is thousands a year less than currently available so more affordable + fix it at lower rate for the whole remaining term that way they don’t have to stress test it as that would be irrelevant no risk as fixed rate is for the remainder of he term.
Welshbeef said:
But play it the other way round
Hi mr Bank I want to replace my kitchen and bathroom it will cost £x can you help?
Bank ok LTV and affordability calls met agreed
Or
Hi Mr Bank I’ve done my kitchen and bathroom it cost me £x (exactly the same as above) can you help?
Bank - slow down this is debt consolidation we don’t like that we don’t want you to compound the cost and not understand the compound interest implications
Oh but I do understand it it’s patently clear what’s the issue LtV and affordability all the same as had I asked you in advance?
Bank hmm you know what we don’t like it
Ok then thanks for nothing I’ll get a couple of personal loans instead (which are all pre approved). So me Bank you’ve actually cost me MORE due to your idiotic binary position.
It’s bloody daft we all know it. Common sense has to be there.
In this exact example how can it be debt consolidation? He has no debt no contract nothing on any credit reports instead it’s a verbal agreement. In fact if he dipped his toes with a high level question to test the water he might find doing it this way wouldn’t work so then he can simply lie/Male the story fit “weee going to have a new kitchen and bathroom fitted it will cost £x” they would never visit the property pre and post and never request the receipt for the works done.
Heck a simple way round it is to offload debt to bank of Mum and Dad what a couple of months for credit reports to clear then go to mr bank debt.. what debt I only have mortgage and have no outgoings (agree an Anniston with parents on payment until the cash is cleared).
This happens and he daft system forces people’s hand - these crazy rules can make people stick on higher rates as they cannot pass existing affordability rates yet have don’e for say 12 years plus rare going for is thousands a year less than currently available so more affordable + fix it at lower rate for the whole remaining term that way they don’t have to stress test it as that would be irrelevant no risk as fixed rate is for the remainder of he term.
Slow down, you lost me in your first sentence.Hi mr Bank I want to replace my kitchen and bathroom it will cost £x can you help?
Bank ok LTV and affordability calls met agreed
Or
Hi Mr Bank I’ve done my kitchen and bathroom it cost me £x (exactly the same as above) can you help?
Bank - slow down this is debt consolidation we don’t like that we don’t want you to compound the cost and not understand the compound interest implications
Oh but I do understand it it’s patently clear what’s the issue LtV and affordability all the same as had I asked you in advance?
Bank hmm you know what we don’t like it
Ok then thanks for nothing I’ll get a couple of personal loans instead (which are all pre approved). So me Bank you’ve actually cost me MORE due to your idiotic binary position.
It’s bloody daft we all know it. Common sense has to be there.
In this exact example how can it be debt consolidation? He has no debt no contract nothing on any credit reports instead it’s a verbal agreement. In fact if he dipped his toes with a high level question to test the water he might find doing it this way wouldn’t work so then he can simply lie/Male the story fit “weee going to have a new kitchen and bathroom fitted it will cost £x” they would never visit the property pre and post and never request the receipt for the works done.
Heck a simple way round it is to offload debt to bank of Mum and Dad what a couple of months for credit reports to clear then go to mr bank debt.. what debt I only have mortgage and have no outgoings (agree an Anniston with parents on payment until the cash is cleared).
This happens and he daft system forces people’s hand - these crazy rules can make people stick on higher rates as they cannot pass existing affordability rates yet have don’e for say 12 years plus rare going for is thousands a year less than currently available so more affordable + fix it at lower rate for the whole remaining term that way they don’t have to stress test it as that would be irrelevant no risk as fixed rate is for the remainder of he term.
Any chance you could explain what your on about in layman’s terms as to what your trying to tell the OP he should do.
Welshbeef said:
But play it the other way round
I don't need to play it the other way round.I'm a mortgage broker.
I'm helping give information to the OP to help him.
What you are giving, is garbled mis-information that is of zero help to the OP.
Whether he got the money from family or off of a credit card, the reason he now needs the money is to repay a debt.................
Sarnie said:
I don't need to play it the other way round.
I'm a mortgage broker.
I'm helping give information to the OP to help him.
What you are giving, is garbled mis-information that is of zero help to the OP.
Whether he got the money from family or off of a credit card, the reason he now needs the money is to repay a debt.................
Is there any logical way around this?I'm a mortgage broker.
I'm helping give information to the OP to help him.
What you are giving, is garbled mis-information that is of zero help to the OP.
Whether he got the money from family or off of a credit card, the reason he now needs the money is to repay a debt.................
I couldn't remortgage before doing my building works and was left with no choice but to use credit cards and a personal loan, however because I now have said credit cards and a personal loan on my credit profile I cant borrow enough to pay the works off.
LTV is now lower than before and borrowing more on a mortgage would reduce my monthly payments by £650 so affordability is not an issue.
Apologies OP for the slight hijack.
iain014 said:
Is there any logical way around this?
I couldn't remortgage before doing my building works and was left with no choice but to use credit cards and a personal loan, however because I now have said credit cards and a personal loan on my credit profile I cant borrow enough to pay the works off.
LTV is now lower than before and borrowing more on a mortgage would reduce my monthly payments by £650 so affordability is not an issue.
Apologies OP for the slight hijack.
You need to be approaching the right lender.............sounds like you've already had someone say no?I couldn't remortgage before doing my building works and was left with no choice but to use credit cards and a personal loan, however because I now have said credit cards and a personal loan on my credit profile I cant borrow enough to pay the works off.
LTV is now lower than before and borrowing more on a mortgage would reduce my monthly payments by £650 so affordability is not an issue.
Apologies OP for the slight hijack.
iain014 said:
Thanks Sarnie - can drop you a PM if you'd prefer.
I haven't approached anyone yet, this is just using the "borrowing more" calculator with my current lender (Santander)
No problem.........the problem with Santander is that they continue to count the unsecured debts as ongoing commitments, even if they are being paid off.....on the worst case scenario of the extra lending being taken and the debts not being paid off......I haven't approached anyone yet, this is just using the "borrowing more" calculator with my current lender (Santander)
Sarnie said:
No problem.........the problem with Santander is that they continue to count the unsecured debts as ongoing commitments, even if they are being paid off.....on the worst case scenario of the extra lending being taken and the debts not being paid off......
Given this is a whole Bank not trusting what a customer is saying why don’t the bank then (once agreed) simply pay the different direct to the credit card or loan first before any “net release” to the client. Clearly anyone could wipe their non secured debt for a few months simply to appear to have a clean report and once the bank has remortgaged/ whatever situation that person could recreate he same debts they had previously
Sarnie said:
Welshbeef said:
Given this is a whole Bank not trusting what a customer is saying why don’t the bank then (once agreed) simply pay the different direct to the credit card or loan first before any “net release” to the client.
......because that's not what banks do.nomad5 said:
Just to update, we applied online and have got an "Agreement in Principle" with the Halifax for the £70,000 advance. They took salary details, outgoings details, etc as well as having our mortgage details anyway. This got an approval on their system.
Of the reasons for requiring the advance, one of the options was "To pay a family member" so we selected that. Ultimately we are giving my wifes father £70,000 so he can give it to my wifes sister.
Are the Halifax likely to delve further in to this, and if so is there wording we could use to ensure its seen along those lines, or does it really matter if we've got an Agreement in Principle anyway?
HMRC likely will as the end user will be getting tax free £70k ie the family members sister so she should be paying her marginal rate of tax on it - not of your concern but she will need to explain where it has come from and within her self assessmentOf the reasons for requiring the advance, one of the options was "To pay a family member" so we selected that. Ultimately we are giving my wifes father £70,000 so he can give it to my wifes sister.
Are the Halifax likely to delve further in to this, and if so is there wording we could use to ensure its seen along those lines, or does it really matter if we've got an Agreement in Principle anyway?
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