# Re: Remortgage help!



## Pablo74 (25 Oct 2007)

Hello all,
I am a newby punter to this site but from what i have read i think i am in the right place.
I am thinking about re mortgaging myself as over the last few months i find i am not saving very little. I know that in the long run it would cost me alot more but if it freed up cash so i could live a little i think it is worth it. 
My situation at the moment is 

Morgage 77,500. 17yrs left variable rate AIB
Personnal Loan 18,000. 10yrs left
Car loan 7,300. 2 yrs left
Credit card 4,500. Maxed

My equity on my house is running at 200,000 at the moment.
If i re morgaged for 100,000 and paid off all of the above i would be paying out roughly 680 a month over 20 yrs. That would release nearly 400 a month for me to build a little nest egg .
What advise can you give me ?
If i switched lenders would they pay the legal fees ?
What are the costs with re mortgaging ?
Am i mad in my thinking ?
regards
Pablo74


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## ClubMan (25 Oct 2007)

Split from this thread:

http://www.askaboutmoney.com/showthread.php?t=46057


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## Bronte (25 Oct 2007)

Are you planning to borrow 100K in addition to the mortgage of 75K and then pay off your loans of 25K leaving you with 75K in cash - it's not clear to me from your post.  It would also be helpful if you stated what your payments are on the loans.  In any case whatever savings you have should be going to the credit card bill as it's got the highest interest rate. Do you have a lump sum in savings?


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## Purple (25 Oct 2007)

Bronte said:


> Are you planning to borrow 100K in addition to the mortgage of 75K and then pay off your loans of 25K leaving you with 75K in cash - it's not clear to me from your post.  It would also be helpful if you stated what your payments are on the loans.  In any case whatever savings you have should be going to the credit card bill as it's got the highest interest rate. Do you have a lump sum in savings?



I think the OP is suggesting that they borrow 100K in total, i.e. €25k extra.

Pablo74, as you have good equity I don't see this as a bad idea. I do think you should increase your repayments once you have the nest egg that you want built up. Even an extra €100 a month will take much of the extra cost out of the mortgage over the long run.
The main thing is to understand that you have re-mortgaged to cover current spending that you couldn't afford and not to fall into the same trap again.


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## ClubMan (25 Oct 2007)

Purple said:


> The main thing is to understand that you have re-mortgaged to cover current spending that you couldn't afford and not to fall into the same trap again.


Yes - you need to address the underlying spending/budgeting patterns that are leading you to live beyond your means and rack up debt as evidenced by your initial post.


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## Pablo74 (25 Oct 2007)

Thanks for your replys.
Once bitten twice shy, i have learnt from my borrowing mistakes and living beyond my means.
I am with AIB with most of my loans and the 100,000 would pay off my existing mortgage, personal loan and car loan.
Could some one tell me my LTV %
regards
Pablo74


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## ClubMan (25 Oct 2007)

Your _LTV _seems to be €75K/€200K = 37.5%. If you topped up to €100K then your _LTV _would be 50%. Lenders generally like and give better rate deals for lower _LTVs_. If you are topping up then maybe take the opportunity to shop around and make sure that you are on the best mortgage deal for your circumstances (even if this means switching to another lender if necessary/possible).


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## YouNeek (25 Oct 2007)

My reading of OP:

Mortgage: 75 K
Equity: 200K
=> Value = 275K

Current LTV is 75K / 275K = 27%
Proposed LTV is 100K / 275K = 36%


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## ClubMan (25 Oct 2007)

Sorry - I (mis)read it as mortgage = €75K, value = €200K. Your calculations look correct.


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## Pablo74 (26 Oct 2007)

Hi again,
    Before i go on the phone to my lenders, is it better to tell them that i am clearing off my car, personal, credit card loans with the top up i am receiving from them ? Would it increase my chances of getting the top up ?
Pablo74


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## ClubMan (26 Oct 2007)

I think what's more important here is _LTV _(which will be low even after the topup) and affordability - i.e. can you realistically afford the higher mortgage/repayments. If you can then I don't think the lender will be too worried about what the money is for although maybe I'm wrong. Don't forget that you cannot claim owner occupier morrtgage interest tax relief on any additional mortgage amounts if they are not used to purchase/renovate your _PPR_.  Also (but you seem to be aware of this already) paying for your car, credit card bill, personal loan etc. over a few decades rather than a few years will cost you more in the long run.


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## Pablo74 (26 Oct 2007)

Thank you very much one and all....... most helpful.
I will let ye know how i got on next week.
pablo74


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## Pablo74 (31 Oct 2007)

Hi again,

Just to update ye on this matter and a question.......
I got a letter this morning from my mortgage lender asking me to submit my last 3 pay slips ( which is no problem) and also my p60 from last year which is no probs either. 
The only thing that i am worried about is that my gross pay last year was not that great (about 20k) because i took alot of days off to visit my g/f who lives 200 miles away from me. Would that effect their decision on my re mortgage ?
Regards
Pablo74


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## Pablo74 (2 Nov 2007)

Hi again,
     Just to add to that...... i am also getting a pay rise starting from this month on. It is an increase of €250 per month. Should i let the lenders know this, would it make a difference to their decision ?
Regards.
Pablo74


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## ClubMan (2 Nov 2007)

Pablo74 said:


> The only thing that i am worried about is that my gross pay last year was not that great (about 20k) because i took alot of days off to visit my g/f who lives 200 miles away from me. Would that effect their decision on my re mortgage ?


Well obviously a lender is going to take your gross/net income into consideration when deciding whether or not to lend to you and what amount they might be willing to adbvance.


> Just to add to that...... i am also getting a pay rise starting from this month on. It is an increase of €250 per month. Should i let the lenders know this, would it make a difference to their decision ?


Can't do any harm (and may do some good) to mention it I'd say.


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## Pablo74 (2 Nov 2007)

Thank you Clubman
Pablo74


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## pinkyBear (6 Nov 2007)

Hi Pablo - sorry about this but aren't you alsoo looking for a ring 
*Direct debit for Engagement ring*  to the value of €3000k and isn't your CC maxed out! 

Think wisely my man. Mr Bear and I when we got engaged I was in collage - so elaborate rings were far from affordable - 9 years on and I get my whopper of a ring - it was well deserved on my part


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## Pablo74 (22 Nov 2007)

Hi all,
Just an update...... i went and saw my bank manager about topping up my mortgage from 77,500k to 105k. After typing into the old computer for a few minutes.... he said "thats No Probs" and the he would put the wheels in motion. I gave him my letter of employment and now i must go and meet Mike the Life Assurance dude......
What can i expect Mike to say to me ? I know my assurance will increase but is there anything else i need to know ?
regards,
Pablo74


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## ClubMan (22 Nov 2007)

Pablo74 said:


> What can i expect Mike to say to me ? I know my assurance will increase but is there anything else i need to know ?
> regards,


Why don't you shop around for this yourself? Chances are you will pay more by going to the lender's agent. You should probably read this key topic:

Mortgage Protection and Mortgage Repayment Protection Policies

and look for existing threads on swithing mortgage protection life assurance cover mid-term (not much to it - just put the new cover in place, inform the lender and then cancel the old one).


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## Sherman (22 Nov 2007)

pinkyBear said:


> Hi Pablo - sorry about this but aren't you alsoo looking for a ring
> *Direct debit for Engagement ring* to the value of €3000k


 
I agree. €3,000,000 for an engagement ring is probably excessive given your circumstances.


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