Halifax Further Advance

RDG_RG1

I have recently bought a flat for £160,000.

Deposit was £50,000 with £110,000 (fixed rate for 2 years) from Halifax.

I have an income of £30,000PA with unsecured debts (credit cards and overdrafts) of approx. £3,750

Credit Card 1 is a Barclaycard Platinum (taken when I was a Barclays employee and thus previously had an excellent rate) with £500 on

CC2 is Amex Platinum - taken to take advantage of the 5% cashback, but maxed during a period of unemployment and thus debt of £2,100

Overdraft is £1250, although this is obviously cleared (and re-entered) on a monthly basis.

Halifax are now offering a "Further Advance", essentially added to the mortgage. I'm highly suspicious of this offer in the current economic climate.

However, as you can tell, i've been horrific with money in the 4 years since I graduated university and need to do something about it. My question is, with the Halifax repayments costing £77 a month, would it be cheaper for me to take the extra loan of 10,000 and use 4k to clear my debts & then put the remaining 6k in a high-interest account (and use it towards my increased mortgage repayments) than it would be to continue to pay off my cards on a monthly basis?

assistance appreciated.

Zapp_from_Planet_Zogg

Were you 'offered' the advance through a mailshot letter?

If so, there is no guaruntee that you will be able to actually get it, as they will re-run a credit check on you! In the current climate, you may not actually get approved (mortgage lenders are a bit of a lottery at the moment!)

I am sure that you can find a savings account with a higher rate than the mortgage charges, so, it could pay you to do that. But, if you have been 'horrific' with your finances in the recent past, do you trust yourself not to fritter away this extra £6000? Do you need the extra £6000 sitting in a savings account anyway - do you need to take £10000 in the first place?

Also, you need to factor in the cost of the advance! (They don't set it up for free).

Another thing to consider - do you really want to secure an additional £10000 of debt on your home? (or even £4000, which is currently unsecured debt?)

_Andy_

RDG_RG1 wrote: »

Halifax are now offering a "Further Advance", essentially added to the mortgage. I'm highly suspicious of this offer in the current economic climate.

Why are you suspicious of it?

witches_cauldron

If, after just four years out of university, you are able to plunk down a £50k deposit and buy your own home, your finances can't be as dire as you say.

Kavanne

witches_cauldron wrote: »

If, after just four years out of university, you are able to plunk down a £50k deposit and buy your own home, your finances can't be as dire as you say.

Could be mummy and daddy?

HeadInSand_2

Why didn't you wipe all debts with some of your deposit money before starting out? Then you could've waited a few months and flat prices would've dropped by more than that anyway, making it win-win.

CLAPTON

impossible to say without knowing the interest rates and the full details