remortgage borrow more

[kevburner]

hi all

what are more best options

house worth 350000
current mortgage 145000
on varible rate halifax for 5 years
18 years left
30k of credit card debt that i want to clear
want 45k to do house extension
earn basic 40k a year but been earning between 60/90k a year for past 5 years same job and employer for 20 years

outgoings

mortgage 1000 at 3.7%
credit cards monthly payments 1000
other bills 1000 month
sometimes i pay more off credit cards

im lost with this mortgage procedure of remortgaging or even changing to a new rate

most of credit card debt is from motorsport hobbie chasing championships with my boy , but thats now stopped as he has got old and is now discovered theres more to life than racing moto bikes all weekend!

do i stay with halifax and see what they can offer me or go with a mortgage broker?

all help and advice very welcome

[cs174]

kevburner said:

hi all

what are more best options

house worth 350000
current mortgage 145000
on varible rate halifax for 5 years
18 years left
30k of credit card debt that i want to clear
want 45k to do house extension
earn basic 40k a year but been earning between 60/90k a year for past 5 years same job and employer for 20 years

outgoings

mortgage 1000 at 3.7%
credit cards monthly payments 1000
other bills 1000 month
sometimes i pay more off credit cards

im lost with this mortgage procedure of remortgaging or even changing to a new rate

most of credit card debt is from motorsport hobbie chasing championships with my boy , but thats now stopped as he has got old and is now discovered theres more to life than racing moto bikes all weekend!

do i stay with halifax and see what they can offer me or go with a mortgage broker?

all help and advice very welcome

Your current interest rate of 3.7% is quite high. I'd suggest remortgaging your current mortgage (I resume theres no early redemption penalty as your on the variable rate) and increasing your borrowing at the same time. If you don't meet the affordability requirements to borrow £220K, pay off the credit card then do the extension.

Sarnie on here is the man for mortgages. I use London and Country (www.landc.co.uk)

[Sarnie]

kevburner said:

hi all

what are more best options

house worth 350000
current mortgage 145000
on varible rate halifax for 5 years
18 years left
30k of credit card debt that i want to clear
want 45k to do house extension
earn basic 40k a year but been earning between 60/90k a year for past 5 years same job and employer for 20 years

outgoings

mortgage 1000 at 3.7%
credit cards monthly payments 1000
other bills 1000 month
sometimes i pay more off credit cards

im lost with this mortgage procedure of remortgaging or even changing to a new rate

most of credit card debt is from motorsport hobbie chasing championships with my boy , but thats now stopped as he has got old and is now discovered theres more to life than racing moto bikes all weekend!

do i stay with halifax and see what they can offer me or go with a mortgage broker?

all help and advice very welcome

Your basic alone won't be sufficient to lend the amount you need. The key to this will be exactly how the additional earnings are earnt and what they have been recently for a lender to be able to use.

Is it annual bonus? Commission or Over time?

[kevburner]

thxs for speedie reply

my extra earnings are shift work and overtime which are a result of being on call out which im contracted to do

last year i earnt 89k
year before was 76k
year before was 67k
year before was 62k
year before was 61k

so i could just get a better deal for my current mortgage , a lower rate , a 5 year fixid rate perhaps , i think halifax offered me 1.57% that was via the internet banking website

[rlg43p]

£30k of credit card debt is scary. If you do remortgage and pay them off then I'd suggest you chop them all up in case you're tempted to use them again.

[Sarnie]

kevburner said:

thxs for speedie reply

my extra earnings are shift work and overtime which are a result of being on call out which im contracted to do

last year i earnt 89k
year before was 76k
year before was 67k
year before was 62k
year before was 61k

so i could just get a better deal for my current mortgage , a lower rate , a 5 year fixid rate perhaps , i think halifax offered me 1.57% that was via the internet banking website

You can product transfer to a new rate with Halifax yes. But thats just a balance transfer, if you want to lend anything additional then that would require a full underwrite.

Halifax only lend against 30% of variable income currently, which they will take from the average of your last 3 months pay slips, not what you earnt before that or any of the previous other 5 years........

[Fat hippo]

Sarnie said:

kevburner said:

thxs for speedie reply

my extra earnings are shift work and overtime which are a result of being on call out which im contracted to do

last year i earnt 89k
year before was 76k
year before was 67k
year before was 62k
year before was 61k

so i could just get a better deal for my current mortgage , a lower rate , a 5 year fixid rate perhaps , i think halifax offered me 1.57% that was via the internet banking website

You can product transfer to a new rate with Halifax yes. But thats just a balance transfer, if you want to lend anything additional then that would require a full underwrite.

Halifax only lend against 30% of variable income currently, which they will take from the average of your last 3 months pay slips, not what you earnt before that or any of the previous other 5 years........

Does that mean that if you are currently with Halifax, and you have been making your payments on time, but you’ve got other borrowings since you took out the original mortgage, in this case the credit card debt, that Halifax would continue to offer one of their lower rates without an issue?

I recall 7-8 years ago having an argument with my bank when my fixed rate came to an end and they said they couldn’t offer me one of their better rates ie 2.5% despite having paid 4.5% without problem.

[kevburner]

rlg43p said:

£30k of credit card debt is scary. If you do remortgage and pay them off then I'd suggest you chop them all up in case you're tempted to use them again.

it was 50k

[Sarnie]

Fat hippo said:

Does that mean that if you are currently with Halifax, and you have been making your payments on time, but you’ve got other borrowings since you took out the original mortgage, in this case the credit card debt, that Halifax would continue to offer one of their lower rates without an issue?

I recall 7-8 years ago having an argument with my bank when my fixed rate came to an end and they said they couldn’t offer me one of their better rates ie 2.5% despite having paid 4.5% without problem.

Yes, the basic product transfer is straight forward.

When you want further lending thats when credit checks would be required, affordability assessments, property valuations etc etc.

Edited by Sarnie on Wednesday 9th June 22:57

[Fat hippo]

Sarnie said:

Fat hippo said:

Does that mean that if you are currently with Halifax, and you have been making your payments on time, but you’ve got other borrowings since you took out the original mortgage, in this case the credit card debt, that Halifax would continue to offer one of their lower rates without an issue?

I recall 7-8 years ago having an argument with my bank when my fixed rate came to an end and they said they couldn’t offer me one of their better rates ie 2.5% despite having paid 4.5% without problem.

Yes, the basic product transfer is straight forward.

When you want further lending then when credit checks would be required, affordability assessments, property valuations etc etc.

Thanks Sarnie

[The Moose]

Why on earth would you want to take unsecured debt and secure it against your house over a long term? (the £30k credit card debt)

[hman]

pay off your credit cards first then look at doing all the rest .

Try paying 2000 off a month instead or even 3000 if you can do it.

That credit card debt is like a boat anchor around your neck - get it sorted

[NickCQ]

The Moose said:

Why on earth would you want to take unsecured debt and secure it against your house over a long term? (the £30k credit card debt)

Presumably to replace 20%+ APR with <3%. LTV is <65% before considering extension value uplift so feels low risk.

[btdk5]

NickCQ said:

The Moose said:

Why on earth would you want to take unsecured debt and secure it against your house over a long term? (the £30k credit card debt)

Presumably to replace 20%+ APR with <3%. LTV is <65% before considering extension value uplift so feels low risk.

Surely more effective to get a loan to establish a repayment plan for the credit card debt over 2.5 years. At 4% that would cost you around £1052 a month so not too different to what you’re paying now.

That mortgage rate is horrendous by the way. Get that changed immediately.

[NickCQ]

btdk5 said:

repayment plan for the credit card debt … at 4%

Why would you do that at 4% when you could add it onto the mortgage at <3% with zero additional fees (assuming you are remortgaging anyway)?

[btdk5]

NickCQ said:

btdk5 said:

repayment plan for the credit card debt … at 4%

Why would you do that at 4% when you could add it onto the mortgage at <3% with zero additional fees (assuming you are remortgaging anyway)?

Adding it to the mortgage means you have the potential to pay interest on the sum over say the next 25 years.

30k @ 4% for 2.5 years = £1,574.93 in total interest
30k @ 2% for 25 years = £8,146.89 total interest.

[NickCQ]

btdk5 said:

Adding it to the mortgage means you have the potential to pay interest on the sum over say the next 25 years.

30k @ 4% for 2.5 years = £1,574.93 in total interest
30k @ 2% for 25 years = £8,146.89 total interest.

You would overpay the mortgage, clearly, using the cash currently paying the card bill.

[btdk5]

NickCQ said:

btdk5 said:

Adding it to the mortgage means you have the potential to pay interest on the sum over say the next 25 years.

30k @ 4% for 2.5 years = £1,574.93 in total interest
30k @ 2% for 25 years = £8,146.89 total interest.

You would overpay the mortgage, clearly, using the cash currently paying the card bill.

With all due respect to the OP he had a £50k credit card bill. I’m not sure overpayment of liabilities is in his nature.

[The Moose]

NickCQ said:

The Moose said:

Why on earth would you want to take unsecured debt and secure it against your house over a long term? (the £30k credit card debt)

Presumably to replace 20%+ APR with <3%. LTV is <65% before considering extension value uplift so feels low risk.

Sure but you're securing that loan against the roof over your family's head?! Work hard to get it paid off - earning 90k he should be able to have that done in a year. Screw around with balance transfers to 0% cards if you really want to!

NickCQ said:

btdk5 said:

Adding it to the mortgage means you have the potential to pay interest on the sum over say the next 25 years.

30k @ 4% for 2.5 years = £1,574.93 in total interest
30k @ 2% for 25 years = £8,146.89 total interest.

You would overpay the mortgage, clearly, using the cash currently paying the card bill.

The maths works, however the human element to this (the habits) are the dangerous bit!

[kevburner]

Thxs for all your replies, some interesting solutions, think I’m going to try Halifax to get a better deal , and then work to pay off the debt as quickly as I can , extension can wait

I guess I thought it would be simple to get a remortgage with extra money to pay off debts and build extension

7 years ago when we moved to this house and I doubled the mortgage from What I remember it was a 5 min phone call to the bank , I guess it’s a bit more complicated and thorough process now

If Halifax offer me around the 1.5 for 5 years for my current mortgage is that good ?