Reduce mortgage with credit card?

choccybuttons

Hello, Im just looking to bounce an idea around to see if people think its viable.

Currently have a 105,500 mortgage at 7.09% interest only (deal ran out last month). My house has only been valued at 115,000 by abbey when I applied for mortgage (a bit of a shock, when broker thought it was worth 150,000 but no houses have sold in my area so couldn't contest), so mortgage was declined. The current 95% mortgage deals are rubbish and don't make it worth my while to change when fee's are added. However the 90% deals are much better rates. I was wondering if its worth asking for a mortgage for 103,500 and putting the other 2000 on an interest free credit card in mine or husbands name. Husband wont be on mortgage as has no provable income. Is this even possible? What do people think? I am keen to get a new deal as I go on maternity leave soon and my wages will drop to stat in January.

collecting.dust

Hi there choccybuttons

Thanks for putting this up there. Its also something I had wondered about but for a totally different reason to yours.

We have just had an endowment policy mature that has paid out a £4K shortfall. I am not sure how we are going to handle this yet but we have already spoke to the B/S and they tell us they can increase the amount we owe on repayment terms by 4K - rate is 6%

But if I was to transfer the 4K shortfall to a 0% card the balance transfer fee would likely only be 3% max and i could look at repaying it over a year.

So same question. Will a credit card company balance transfer to a mortgage account or not ?

Debbie

opinions4u

If you could get 0% for several years somehow, fine. In reality, you won't find anything that will give you 0% for long enough and simply put yourself in to an interest paying position in a few months time.

I'd steer clear of the idea.

collecting.dust

I have worked it out that I can afford the repayments to clear the 4K debt in under a year. I aimed to pay it back £500 per month

I could achive this because mortgage is already set to drop £170 per month because of endowment payout and I also no longer have the policy to pay as its matured (another £85 per month)

But yes I would be making up the difference out of pocket.

It would be achievable for us - but is it worth doing this way ??

Locoblade

You can get credit cards that do "super balance transfers", which means they'll transfer money to your bank account not just another credit card, so its do-able, you just need to ensure you can pay off the credit card before the interest free period ends, or at worse transfer whatever left at the end of a 0% deal to another 0% card.

Have a look at the Stoozing forum as this is basically what you're describing, although stoozing is generally only done to offset money against your mortgage to reduce the interest paid, rather than to actually use the money to pay off some of the mortgage. Doing it the conventional way means the money is always there ready to pay off the credit cards if required, whereas the way you're doing it you need to generate that money from somewhere.

collecting.dust

Thank you

I will go take a look at that