Increasing mortgage for extension but have debt - advise?

Hi - Looking for some advise please. I am looking at getting an extension to my house and applying for a top up to my mortgage if possible in the current climate. The reason I would like to do it now is that building costs are low - The problem is that I have been living in my overdraft til last month (an approved o/d) and going forward I will be able to stay out of the overdraft - I also have a credit card bill that I need to clear - approx 10K. I was therefore thinking of applying for the top up in 6 months - so that I have 6 months clear of overdraft plus I will work hard at reducing the credit card balance....Just looking for some advise to see if you think that I am doing the right thing or is there an alternative approach - any suggestions / help appreciated - Thanks

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Brendan
Administrator

I'm on the look out for a new mortgage, but the first question my mortgage adviser asked me was if I had any other loans or credit card debt. From what I hear its a big no-no. Also, banks ask for 6 months bank statements when applying for a mortgage, so they will know what you have been paying back for the previous 6 months

The credit union might be a better option ( assuming your a member ) . They are usually more willing to help with home improvement projects, whereas banks at the moment are a bit like getting blood out of a stone.

Set up a standing order for regular savings into an account for the next few months to build up a good record, and work on that credit card debt . You can usually borrow 5 times your shares, so if you need 25k for extension you'll need 5k saved with them. I find them much more flexible with repayments, you can increase/decrease/clear off without any penalties. Plus you have the option of top-ups in future once you have good repayment history.

Plus I've never been asked for bank statements etc when applying for loans.

thanks for your replies - much appreciated. yes I do have a credit union account, although my funds have been somewhat depleted in the last year or so. I will start making regular deposits again through a direct debit - although the branch, like the banks is asking for 6 months bank statements when approving loans. think that I have no choice but to wait six months and assess the position then..thanks again