[*JAC*]

Hi

We are looking at topping up our mortgage to consolidate a personal loan and if the bank will allow it, to get solar panels put on to save us some money.

We have been struggling a bit financially, have been late with a couple of mortgage repayments (a few days), have had to redraw some repayments and have just been playing catchup with everything generally.

In a week we stand to be saving approx. $400 per month as our mortgage comes out of fixed terms, and if we get to consolidate our personal loan that's over another $400 we will save. Our plan is, with the $800 monthly saving, plus having minimal electricity bills with the solar panels, we will be able to catch up very quickly on all of our expenses, set a proper budget and then use the extra money to smash our mortgage. Basically once we're caught up with everything, the savings will be placed into our mortgage.

I'm worried once the bank looks into our circumstances - sees our transactions etc. they will refuse our application. I guess what I'm asking is will the bank look at our transactions and say no on the spot, or will they take the whole situation into account and realise we will be better off, and therefore in a better place to make our regular repayments (which incidently because of the lower interest rate once it comes off fixed will be less than what the min repayment amount is now).

Thanks :-)

[ZombieMum]

Do you have much equity in your house? If so, you might be better off applying for a line of credit account. Interest is slightly higher than the variable rate - but it gives you more freedom.

[Shellby]

If you have had late payments in the last 3 months you may find their software will say no on the spot. We were always told you need to show perfect payment history for 3 months as that is normally as far back as the computer looks.

We have a lady at work and they missed only 1 payment and were told they need to wait 6 months with prefect payments before the bank will look at consolidating their car loan into their homeloan even though like you they will be saving $400 a month.

You can go in and just have a general chat with the loans person, they will tell you what you need to do to be approved - they won't need to look into your account or anything - just go with what you have said here and they can give you the general idea of how your bank works.

[PatG]

How long have you had your mortgage and will a fee apply if you exit? Banks want your business and if you can legitimately threaten to take yours somewhere else they may be more flexible.

[PeggyLou]

We have only recently refinanced (as in end of last year).

In order to get to that point, we had to, as mentioned above.
Have at least 3 months of no late payments on our credit cards/loans etc.
It was hard to do, we were the same. If we could refinance we'd be so much better off and it would be so much easier to pay the bills.
But they had to see no late things. So yeah.
We were just super lean for three months and got there in the end.

[*JAC*]

Thanks for your replies.

PatG - I don't to change banks if I can help it. I guess it's an option though if they don't approve us....

Shelby - I just checked our transactions, and according to the loan statement it was paid, but we were overdrawn in our account. It happened maybe twice? Definitely within the last 3 months though .

Zombiemum - I'm not really interested in a line of credit TBH.

I don't know - maybe we're better off waiting for a few months - at least we'll have the $400 we'll be saving on the lower interest rate to put to good use in the meantime.... I would love the opportunity to get some financial freedom though!