This is why!
Client came to see me February 2015 and has a mortgage of £300,000 paying 0.99% above the base rate on interest only – results in roughly £250.00 per month.
They want to borrow another £50,000.
They get approved for the £50k with their existing lender for a further advance – however the lender wants to transfer the whole debt from 0.99% Interest only to 4.2% Repayment.
This would cost £1634.82 Per month?
The alternative solution provided by JP Mortgages Independent Mortgage brokers was to borrow £50,000 on a secured loan at 5.6% over 300 months at a cost of £335.00 Per month.
Now the clients have borrowed the money required keeping their existing rate of 0.99%
Saving them almost £1100 per month.
Secured loand are not for everyone, however they can be a great substitute where a re-mortgage or further advance fails with the 1st mortgage lender .