# Re-financing options with another lender



## getsorted (25 Feb 2009)

Hi, newbie poster – would appreciate advice.

*Age*: 35
*Spouse’s age*: 33

*Professional Private sector Annual gross income*: 57,000 – seems secure
*Annual gross income of spouse*: 55,000 – public service

*In general we were spending more than we earned*

*Value of home*: 500,000 (allowing for approx 20% reduction)
*Outstanding on mortgage*: 288,000 – 20 yrs remaining – 1,450 p/m
*Interest rate on mortgage*: 3.25%

*Other borrowings:*
Family member 22,500
Credit Card 9,500
Credit Union 13,000
AIB Car 14,100
AIB Overdraft 7,500
*Total other loans 66,500*

*Do you pay off your full credit card balance each month?* No

*Savings and investments*: none

*Do you have a pension scheme?* Yes but I am not contributing myself – my spouse has a public service pension.

*Do you own any investment or other property? *No

*Ages of children*: 3 children under 10

*Life insurance*: 83 p/m covers over twice the mortgage on dual life policy.

*Other Info: *ICB Clean (checked) – never in arrears
Currently repaying mortgage 1,450 & other loans of 1,605 p/m – total 3,055 p/m
We want to consolidate our debt and re-finance the mortgage over 25yrs (approx. 1,650 p/m). A lot of the debt we have relates to work completed on the house and but we have been spending on the house to the detriment of our personal finances. We have been advised that our bank (AIB) do not engage in debt consolidation and we were wondering what AAM posters think of the chances of us being re-financed by another institution in the current climate? Are the banks doing this kind of business at the moment?


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## KFB123 (25 Feb 2009)

Hi there. I think the best bet would be to approach a mortgage broker. Conssolidate the loans and put out as long as possible. Any surplus at the end of every month should be put towards capital on loan facility.


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## getsorted (25 Feb 2009)

I guess what I am really asking is that in the current climate, are the banks looking at business like this and would we be good candidates for re-financing?

What type of approval ratings are there on this type of business?


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## getsorted (2 Mar 2009)

I spoke to a broker who advised that there are only 3 lenders that are interested in this type of business in the current climate.

BOS, Perm TSB &KBC Homeloans. The variable rates are 4.15%, 4% & 3.99% respectively. These seem very high. 

I thought it strange that he did not advise Halifax are doing this type of business now for as little as 3.25% variable?


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## CCOVICH (2 Mar 2009)

getsorted said:


> I thought it strange that he did not advise Halifax are doing this type of business now for as little as 3.25% variable?


 
Does he have an agency with Halifax?

And when you say 'BOS'-aren't Halifax and BOS one and the same as far as mortgages are concerned?


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## Bronte (2 Mar 2009)

Can you not get a home improvement loan from your current lender to cover the cost of the expenditure you did on the house.  What percentage of the loans is for home improvements?  I would find it worrying that on such high salaries you do not pay of your credit card monthly, why is this?


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## getsorted (2 Mar 2009)

Bronte said:


> Can you not get a home improvement loan from your current lender to cover the cost of the expenditure you did on the house. What percentage of the loans is for home improvements? I would find it worrying that on such high salaries you do not pay of your credit card monthly, why is this?


 
To be honest, its because we didn't have to. There is a minimum payment option and when you are already overdrawn you eventually think I won't pay it all off this month. Then you enter a cycle of being comfortable with the thought of not clearing it each month. Then the debt climbs.

The loans we have now are mainly house related. The work has all been done in the last few years. The person who advised us (AIB staff member not in our branch) said that AIB would consider this debt consolidation as the money has already been spent.


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## getsorted (2 Mar 2009)

CCOVICH said:


> Does he have an agency with Halifax?
> 
> And when you say 'BOS'-aren't Halifax and BOS one and the same as far as mortgages are concerned?


 
I think you are right CCOVICH. HBOS is Halifax Bank Of Scotland.

Strange that Halifax are offering a better rate directly through the Halifax brand that the broker is suggesting through the BOS brand.


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## Bronte (2 Mar 2009)

getsorted said:


> To be honest, its because we didn't have to. There is a minimum payment option and when you are already overdrawn you eventually think I won't pay it all off this month. Then you enter a cycle of being comfortable with the thought of not clearing it each month. Then the debt climbs.


  That's a very strange reason for not paying off a debt, 'because we didn't have to'  Based on this I think debt consolidation may not be a good idea for you and your bank seems to think so to.  What percentage of your loans are for home improvement? Did you think about starting to pay off your debts starting with the highest interest rated one?


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## getsorted (2 Mar 2009)

Bronte said:


> That's a very strange reason for not paying off a debt, 'because we didn't have to' Based on this I think debt consolidation may not be a good idea for you and your bank seems to think so to. What percentage of your loans are for home improvement? Did you think about starting to pay off your debts starting with the highest interest rated one?


 
You make is sound like I didn't pay or missed payments. I was sucked into the easy minimum repayment option like many before me. That is within the normal operating terms of a credit card. I have never missed a payment on any loan I have had and I always pay my debts. 

I also never said that my bank thought debt consolidation was not an option. I said someone I know in AIB advised that AIB would consider this debt consolidation and that they don't do this type of business. I did not approach my bank yet.

In relation to your question about the home improvements, about 45k relates to the total cost of the extra home improvements we took on and that is represented in the current LTV we have even in the current climate.

With regards to paying off the highest interest debt first, we have started that process since Xmas and will continue to do so. I am not asking if you thought it was a good idea, unless you know me and understand fully my personal and family situation you do not have enough information from the above to make such an assertion.  I simply am asking if AAM posters think we would be approved for re-finance and are the banks doing this kind of business.


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## CCOVICH (2 Mar 2009)

getsorted said:


> I think you are right CCOVICH. HBOS is Halifax Bank Of Scotland.
> 
> Strange that Halifax are offering a better rate directly through the Halifax brand that the broker is suggesting through the BOS brand.


 
Did Halifax quote you the better rate directly based on your particular details or have you just seen/heard it advertised?

The rate could depend on the amount, the term, the type of mortgage and the loan-to-value (LTV) among other things-be sure you are comparing like with like. And no harm in asking your broker why you can't get the lower rate.


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## getsorted (2 Mar 2009)

CCOVICH said:


> Did Halifax quote you the better rate directly based on your particular details or have you just seen/heard it advertised?
> 
> The rate could depend on the amount, the term, the type of mortgage and the loan-to-value (LTV) among other things-be sure you are comparing like with like. And no harm in asking your broker why you can't get the lower rate.


 
Halifax quoted me directly. The rate is for LTV of between 50% & 75%. 
I think I will apply with them first and if that fails I will approach the broker. I will question him on the rate at that stage.

(For anyone thinkong of switching, there is a variable rate of 3.15% for LTV of less than 50%). I have no connection to Halifax.


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## Bonafide (2 Mar 2009)

According to this thread the banks are open for business under the old rules. I presume by this that they mean 4 times income & no greater than 85-90% finance. I am open to correction.


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## getsorted (6 Mar 2009)

I applied this week to Halifax for the debt consolidation. I just called and was advised that the application has been passed on to a senior underwriter. The lady I was speaking to advised that all applications now have to go through the senior underwriter. 

Does this mean that at least that a junior underwriter saw enough merit in my application do pass it on?

It would hardly passed on the a senior underwriter when the junior thinks it should be declined, would it?


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## LovelyHome (19 May 2009)

Hi!  Just wondering how you got on with Halifax.  Did they approve your application.  We are in the same position.  The branch manager has approved it and sent it to the Underwriters for the final say.  It's in a queue now.  According to our broker, 95% of the apps are then approved with the rejected ones being based on complicated situations...separations, divorces, etc.

Let me know how you got on.... I'm so nervous about our own application and just hope it gets through!


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