Advice Needed

[tezzaa]

Hi,

 

I'm in the unfortunate position of having to take out a secured loan, just for a couple of months so that I can clear my mortgage arrears and then apply for additional borrowing on my mortgage (although I am waiting to check I can in fact do that - I have been in arrears for roughly one year)

 

Under the CCA roughly how much interest would I have to pay to pay the loan off early? Is it about two months interest?

 

Any advice gratefully received

 

Tezzaa

[slick132]

Hi Tezzaa,

 

Moving this to Mortgages and Secured Loans forum where you should get advice.

 

[tezzaa]

Hi Tezzaa,

 

Moving this to Mortgages and Secured Loans forum where you should get advice.

 

 

Thanks Slick,

 

Can anyone give me some advice on this please

 

Tezzaa

[slick132]

Hi Tezzaa,

 

Are you intending to do this solely through your existing mortgage lender or is the short term secured loan coming from another lender.

[tezzaa]

Hi Tezzaa,

 

Are you intending to do this solely through your existing mortgage lender or is the short term secured loan coming from another lender.

 

Hi Slick,

 

The short term secured loan would be coming through a different lender to the one I have my mortgage with. I will use the loan to pay off my arrears. Then I will have to wait 6 months before I can then get additional borrowing from my mortgage lender.

 

So I wondered what kind of rebate I would get on early repayment of the secured loan. I will have to take out a 3 year loan so that the monthly payments are manageable, then pay it off in 6 months time when I have got additional borrowing from my mortgage lender.

 

I did see some sort of online calculator that gave an estimate of the likely rebate, but can't find it now. I also read somewhere that it should be the capital borrowed less capital repaid plus about two months interest.

 

Tezzaa

[slick132]

Hi Tezzaa,

 

I'm not qualified to offer financial advice, which should be sought from an Independant Financial Adviser.

 

However, I would not be so worried about what rebate I'd get for repaying the loan early.

 

I'd be far more concerned with what Early Redemption Penalty I may have to pay.

 

If you can afford to pay an additional loan, are you sure you can't negotiate a deal with your current lender to repay the arrears over, say, a year.

 

This sounds a bit like robbing Peter to pay Paul.

 

Lets see if there's further advice forthcoming.

[Ell-enn]

Hi there, like Slick says - I think you would be better advised to use the money you would pay to the new loan each month for the next six months to make payments towards the arrears. You would most certainly not get a substantial rebate on the interest when settling your new loan so early.

 

Do you absolutely need to request additional borrowing from your mortgage company in six months? How much are the arrears and how much would the monthly payment on the new loan be?

 

You need to weigh up how much the monthly payment on the loan would be versus paying the same amount towards your arrears until they are paid.

 

Kind Regards

 

Ell-enn