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  • FIRST POST
    • SOIAPC
    • By SOIAPC 7th Jul 17, 9:59 AM
    • 5Posts
    • 1Thanks
    SOIAPC
    Debt worries. Release equity to pay off credit cards, or transfer balance?
    • #1
    • 7th Jul 17, 9:59 AM
    Debt worries. Release equity to pay off credit cards, or transfer balance? 7th Jul 17 at 9:59 AM
    Hi everyone,

    I am very depressed/worried about my debt. Would really appreciate some advice and opinions about what to do as I am hopeless with finances and tend to end up in a mess because of my lack of understanding/knowledge.

    I am a home owner who needs to remortgage to a lower rate as I have been on the base rate for a while. I have about £200K equity in my property. I earn a good salary and have a good credit score. But I have very little left over at the end of each month and no savings.

    I have a M&S credit card and am paying silly interest on it. So I got a 0% interest for 24 months one with Barclaycard last year. I transferred the balance and then stupidly spent on it for various reasons. Now I am paying silly interest on that too.

    I am overdrawn in my current account too. As you can see - a mess.

    I need to consolidate it all and sort it all out. My partner and I are looking to buy together so monthly spending will come right down at some point. Until then, what are my best options? When remortgaging for a better rate - do I borrow enough to clear my debts completely? Or do I get a 3rd credit card and transfer the excess balance from my Barclaycard debt on to that?

    Do mortgage lenders even let you do that? I would ask to borrow £15K or so to pay debt off and do some home improvements probably.

    All advice welcome.

    Thank you.
Page 1
    • zx81
    • By zx81 7th Jul 17, 10:17 AM
    • 14,100 Posts
    • 14,782 Thanks
    zx81
    • #2
    • 7th Jul 17, 10:17 AM
    • #2
    • 7th Jul 17, 10:17 AM
    What do your 3 credit files say?

    Not the scores - but the data. What do,you owe, any missed payments, limits, balances and so on.

    What's your income?
    • SOIAPC
    • By SOIAPC 7th Jul 17, 10:33 AM
    • 5 Posts
    • 1 Thanks
    SOIAPC
    • #3
    • 7th Jul 17, 10:33 AM
    • #3
    • 7th Jul 17, 10:33 AM
    I have a premium account with Equifax to keep track of my credit report and score - should I consult Experian too?

    From Experian, it's gone from 'Good' to 'Fair' since I last checked.

    No missed payments or anything like that - it's 'fair' because I have 71% credit card utilisation
    • SOIAPC
    • By SOIAPC 7th Jul 17, 10:34 AM
    • 5 Posts
    • 1 Thanks
    SOIAPC
    • #4
    • 7th Jul 17, 10:34 AM
    • #4
    • 7th Jul 17, 10:34 AM
    Income is £57K
    • zx81
    • By zx81 7th Jul 17, 10:39 AM
    • 14,100 Posts
    • 14,782 Thanks
    zx81
    • #5
    • 7th Jul 17, 10:39 AM
    • #5
    • 7th Jul 17, 10:39 AM
    Again - ignore the score. It's absolutely meaningless.

    What do your three files say? Experian, Equifax and Call Credit.
    • tempus_fugit
    • By tempus_fugit 7th Jul 17, 10:51 AM
    • 295 Posts
    • 283 Thanks
    tempus_fugit
    • #6
    • 7th Jul 17, 10:51 AM
    • #6
    • 7th Jul 17, 10:51 AM
    As has been alluded to more information is needed to really say what you should do, but if you want my two pence worth I would say for a start putting unsecured debt onto secured debt is not a good idea and should be avoided. Also, don't be tempted to consolidate either. These may look like easy ways out of your debt but they can bite you back later on.

    As you say, you have a good salary and if your credit score is good then things like 0% cards are a good way to start to reduce the costs and give you a chance to attack the debt. You say "monthly spending will come right down at some point", so why not now? With your salary I would suggest that there is considerable room for reduction in spending and you can then use the savings to attack the debt. This is a much more sustainable course of action in the long run and should probably be the way to go if you can manage it. But more info regarding your credit scores, outgoings and commitments are really required to give a more definitive answer.
    • SOIAPC
    • By SOIAPC 7th Jul 17, 11:30 AM
    • 5 Posts
    • 1 Thanks
    SOIAPC
    • #7
    • 7th Jul 17, 11:30 AM
    • #7
    • 7th Jul 17, 11:30 AM
    OK I have more info based on Equifax and Experian (can't do Call Credit as it refuses to accept my postcode and flat number association, have logged a complaint).

    Mortgage is £210,765 remaining.
    Home valued at £480K a couple of years ago

    6 active accounts - 6 settled accounts
    Oldest bank account 17 yrs+
    All payments on all accounts are up to date
    Never any missed payments on any account
    No defaults
    No CCJs etc

    Equifax says value of borrowing outside of mortgage is £16.8K
    Experian says £10.1K

    True amount is £18.9K (credit cards, overdraft and a secure loan I took out with my bank 2 years ago for home improvements...£7.4K remaining on that).

    Barclaycard is £8,964 (limit is £12K)

    I bought my home 14 years ago with ex husband and bought him out when we divorced 7 years ago. Since then my bills have been high. I have a partner and we want to live together. We had to put it all on hold due to my elderly, sick parents and trying to work out if I needed to sell my home to help them etc. Just found out I don't need to so will go ahead and either rent my property out or sell it to live with partner, hence bills will be reduced when we do that.
    Last edited by SOIAPC; 07-07-2017 at 11:31 AM. Reason: Update on figures
    • SOIAPC
    • By SOIAPC 11th Jul 17, 10:10 AM
    • 5 Posts
    • 1 Thanks
    SOIAPC
    • #8
    • 11th Jul 17, 10:10 AM
    • #8
    • 11th Jul 17, 10:10 AM
    Can anyone help advise me please?
    • eskbanker
    • By eskbanker 11th Jul 17, 10:35 AM
    • 5,801 Posts
    • 5,686 Thanks
    eskbanker
    • #9
    • 11th Jul 17, 10:35 AM
    • #9
    • 11th Jul 17, 10:35 AM
    will go ahead and either rent my property out or sell it to live with partner
    Originally posted by SOIAPC
    If you're planning to do either of these they will have a far more significant impact on your finances than the other issues - if you're going to let your property out then you'll need to remortgage anyway (although a BTL mortgage may be at a higher rate than you're currently paying) but if you sell then that would release substantial game-changing equity to allow repayment of all debt, assuming you wouldn't need all of the equity for the joint property you'd buy.

    So, in my humble opinion, it would be worth mapping out which direction you'll be heading in before deciding if it's worth making any short-term changes....
    • DCFC79
    • By DCFC79 11th Jul 17, 4:38 PM
    • 30,282 Posts
    • 19,157 Thanks
    DCFC79
    I have a premium account with Equifax to keep track of my credit report and score - should I consult Experian too?

    From Experian, it's gone from 'Good' to 'Fair' since I last checked.

    No missed payments or anything like that - it's 'fair' because I have 71% credit card utilisation
    Originally posted by SOIAPC
    Are you paying for that premium account from Experian ?

    Id cancel that asap, savd yourself some money, its money down the drain otherwise.

    You can access your experian account via MSE credit club (just google it).
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
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