Mortgage plus home Improvement LoanHypothec plus home improvement loan
Often this qualifies you for a better interest because mortgage interest can be very responsive to what creditors call Loan-to-Value (LTV) - your home loan amount as a percent of the upside. Just think you want a life-time mortgage on a £300,000 plot of land and have a payout of 10 pieces (£30,000) or your own on it.
£270,000 on a mortgage, your LTV would be 90% pc. However if you took out a Personal Loan of 15,000 you would need a mortgage of just 255,000 which is an LTV of 65pc. An home loan of 255,000 at 3. 69pc would be 316,316 a month. 3.
This loan would have a repayment of £168 per month. The use of a consumer loan can also help conserve your savings if you want the security of a fixed-rate mortgage. Loaning 15,000 on a face-to-face loan would qualifiy you for an LTV 86pc mortgage; the best five-year fix here is Yorkshire Building Society's Agreement at 4.24pc.
Even better is the effect on your overall indebtedness when the individual loan is disbursed. If you used a mortgage plus person-to-person loan, the amount left would be just £183,000. Obviously, the use of private credit on paper makes good business sense. 4. Would you really be qualifying for the loan and mortgage that you would need to make it work in practise?
Meanwhile, the private loan companies should not raise any objections, Mr Boulger said. We pointed out that creditors could raise interest at the £15,000 mark, so look at the interest you' re getting at £14,999. They need a first-class loan record to get the best interest and mortgage prices.
There is another benefit to using a private loan for a portion of your borrowing: the prepayment penalties (ERCs) are usually much lower.