Borrowing Money

[Connemmara]

What would be the best way of borrowing £12,000. TIA

[factor-fiction]

It depends on your circumstances, your credit rating, over what period you want to borrow it and what level of repayments you can afford.

[Peter Pedant]

cheapest would be a mortgage against a house

[Connemmara]

thanks for your answer - factor friction have you changed from factor 30

[weecalf]

Ask youself do you really need it and can you wait to build up some money in the mean time .Nothing personal but Id try a different resort like maybe selling or doing some extra work and at least bringing down the amount you need .I know you did not ask should I borrow .Just my opinion

[Connemmara]

wee calf the 12,000 is to pay off my mortgage in August completely and I do have it in savings but naturally so much to pay will be a great loss to me and leave me with very little savings so I was just wondering could I pay it off on a monthly basis for the next lot of years. I am 60

[factor-fiction]

Okay. I assume it's the balance of an interest only mortgage. If so one option may be to extend the mortgage for a few years on a repayment basis. The interest rate for that should be fairly competitive at less than 4 -5%. If you take out a loan the interest rate will be higher- probably nearer 10%. All these exceed the rate you'll be getting on savings- maybe 2%- so I suggest you pay off as much a s you can from savings, keeping just some savings back for an emergency, and then take out a loan (via your mortgage company if possible) for any balance

[Psybbo]

I would be inclined to use the savings as they're not earning much at the minute and the interest on the loan wouls be so much more. Also, I think the banks are being very unhelpful.

[weecalf]

Actually in near the same .Wondering should I spend the 5000 on a car or borrow some .Thinking it will cost me to stand still as Im paying for money ive borrowed .Yes the saving will go but any money Im able to save or get in the near future is mine.I will not have to find it for some one else .

[Psybbo]

Factor puts it so much better.

[Hopkirk]

I can't see the sense in borrowing money to pay off a loan when you have savings.

[Connemmara]

well hopkirk I would be frightened of that rainy day when I would need it for real dire emergencies.

[Connemmara]

thanks factor fiction for your answer.

[wiltsman]

Hopkirk has the answer in one succinct sentence.

[Connemmara]

Wiltsman our posts may have crossed but as I say I would be very frightened of the rainy day - although I am on my own I have lots of nieces and nephews who need help from time to time and I really don't mind helping them out at all. Eg today nephew fixed my oil boiler - ordinary plumber I would just pay them what they asked for and a little more but when it came to nephew I just give him a good bit more - just feel sorry for the young ones cos I think they get it pretty hard particularly for the ones who work.

[Connemmara]

Anyway Factor fiction gave me a rough idea of what to do next - thanks again Factor.

[ummmm]

Didn't you say you were as poor as a church mouse the other day?

[factor-fiction]

Happy to help. Yes, Im factor30 I'm afraid.
Are you looking to pay your mortgage off early or is it an interest-only mortgage that's due to be repaid? If your mortgage is an interest only one do you have any associated life policy, or have you already taken that into account in working out the £12000 figure?

[Connemmara]

Ummm will be if I had to pay off the 12,000 cos that's nearly the bulk of it.

[Connemmara]

that's right factor I have taken the policies off - the policy people (can't remember correct grammar for them) they contacted me yesterday and gave me a projected figure for August and it is an interest payment and it is 12,000 to pay after the policies have been paid into it (hope you get the gist of it)

[wiltsman]

I understand what you're saying Connemmara, but it would have to be a really rainy day where you would need £12,000 in one go.

Perhaps you could pay as much off the mortgage as possible, but hold back the equivalent of 3 or 4 months income. Alternatively, if you've a bank manager you feel you could talk to, have a chat with him,or her!