Should I combine secured and unsecured debt?

Posted on 1 September 2008

Hi we have a fixed rate mortgage with the Northern Rock which runs out in January 2009. The mortgage is also a £10,000 loan for the property. What would be the best options for us. Do we take out a new mortgage covering both th loan and the mortgage, paying off the loan? or take out a new mortgage but keep the loan with the Northern Rock?

Would I be remortgaging or are we just transferring the mortgage to another company. Also would we better off with a variable rate or fixed.

Thanks

Paul

 

Ideally you will be able to clear the £10,000 loan with your mortgage but this will depend fully on your property value.

As for fixed verses a variable rate this comes down to your circumstances and the flexibility of your budget. tracker rates currently offer great value and the opportunity to take advantage of any fall in the Bank of England Base Rate but if rates go up you need to know you can still afford the repayments - some lenders off what is know as an "all weather" mortgage, meaning they allow you to switch to a fixed rate without paying early repayment charges.

And finally yes you will be remortgaging. A remortgage is when you move your mortgage from one lender to another.

If you need further help or advise do give our team of brokers a call on 0845 4131053. They will be able to make a full recommendation for you based on your individual situation.

Best of luck.

Bea

 

 

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