top up/remortgage?

LegacyUser

hi, i've bought a house with a friend of mine.

like most people in ireland, i had to beg borrow and steal to come up with the cash to buy the house.

i've 2 outstandin loans, one's 10k, i'd like to clear that asap.

whats the story with a top up on your mortgage?

is this a good or bad idea?

Dellgirl

I would ring your mortgage advisor and ask them the story. A personal loan is far more expensive to pay off than @ a mortgage rate. You are prob better off doing that. It will meana amending the mortgage agreement with your friend but other than that it should be no hassle.

Bluehair

Just to point out while your monthly repayment to clear debt like this will obviously be lower your total debt repayment will be spread over whatever your mortgage term (20/30 years or whatever) and will be much higher in the end.

MorningStar

Blue hair is dead right and people sometimes misunderstand what the financial advisors are ssuggesting when they suggest a top up. The idea is you move your loans at rates like 10%-19% for 5 years to your mortgage at 3%-6% over 30 years. THe big but is that you are meant to still pay the loans off in the same space of time as originally meant. You then get the benifit of the reduced interest rate.
It can be worth it but their are legal fees and other expenses involved so you need to find out if the money saved actually is higher than the cost.

Dellgirl

Ah....I see. Thanks guys. Thats why I said to ask his advisor at the start because I wasnt entirely sure. I thought he was taking the loan peroid being the same as a given.

MorningStar

You wouldn't be the first to be given the right information in the wrong way to trick you.
The only way to be sure is to check around yourself I don't trust self regulation or government agencies to make sure you get the information.