debt consolidation and remortgaging

jules1973

Hi, I need some help with remortgage advice.

Facts:
We have a £83000 mortgage with Northern Rock
Our house is worth £125,000
We have £25000 in unsecured debt, inc £3000 on credit
Our montly outgoings on mortgage and unsecured debts are £1200
I earn £12,000 per year with extra £3000 as overtime
Hubby earns £16000 and £3000 overtime

We would like to use equity in mortgage to pay off making us £500 a month better off. I have put details in various mortgage calculators and it takes our debts in account and it does not give us enough. Does anyone know of any lenders that will not take debt into account if you are consolidating it. I would be happy to stay with northern rock. I know debt consolidation in mortgages is a bad idea but I am working severely reduced hrs til our daughter goes to school next year so I am able to double my salary. We are not having any more children. So next year we intend to make overpayments to save money in long run.

Any help appreciated!

magentadreamer

I think all lenders take into consideration all outgoings when you apply for a mortgage. Is there any way you could juggle things till your daughter get to school as you were saying that next year you could start making overpayments on the mortgage this money could be then thrown at the debts then. It might just save you from the remortgage hassle and the fact you'll be paying more for it in the long run. If you do SOA you'll be suprised what advice you'll get on ways to cut back without cutting back!

sparkle84

Hi you don't have enough equity in your house to pay off all you debts as the most any bank will allow you to release is 85% of the value which you say is £125,000 which means you would only get approx 106,000 I too think you should post an SOA let people here see if people can help you mak savings anywhere.

Xbigman

Consolidation fails to solve the problem 80% of the time. More importantly you will have effectively secured your debts without clearing them all. This is very dangerous.
You must first address the problem of your overspending. Set up a budget and see if you can live with it. If you cannot then DO NOT secure the debt.
You would be much better off defaulting and setting up a DMP. This is far better than consolidation in your circumstances.
Regards



X

davek1

i'd second what xbigman says. consolidation sucks big time thats why i1m in the situation i am right now. Don't do it even if u have enough equity. Bettr to spk to payplan or cccs if things are bad or talk direct to your creditors. stick with it i've found loads of help on here and payplan are brill.

Dave

jules1973

Thanks for replies. We can afford to make repayments, just thought that we would be better off per month if consolidated. Will just stay as we are and increase my hours when daughter goes to school, thus paying off more of the debts. The other option is a northern rock together loan or a interest only mortgage for a couple of years. What are these like?

bank_of_slate

We took out a Northern Rock together loan when we got the mortgage with them in 2002.

We had to borrow some extra dosh as the house we bought needed extensive work doing to it.
It worked out well as the rate was the same as our mortgage and it came out with the mortgage payment.

I would telephone Northern Rock to discuss your individual situation, I have always found them very helpful, the tables are only a guide really, your personal circumstances could well be different!
Linda xx

severussnape

we looked at an interest only when we remortgaged and with northern rock it wasn't that much difference to the repayment one we got.

northern rock gave us nearly 92% from our house

house valued at £150000, mortgage granted £139000.

great at the time but i would not advise doing it, we are still in debt and having to do a DMP, with a huge mortgage payment bung on it

Little_Miss_Winner

The only way to pay off your current debt is to EARN more and SPEND less.

You are talking about more loans, remortgaging etc.......This will only lead to more and more interest. Don't do it!!! Would hate to see you post next year saying current debt now £40k !!!

Post all your monthly incoming/outgoings there may be ways to save hundreds without much effort.

Good Luck!
pot

Xbigman

A northern rock loan of any size will almost certainly be secured on your property, so is just an expensive mortgage add on. Interest only is more interesting. If you were to go that route and use the money saved on the mortgage to pay off other high APR debts first you can make good savings. This only works as part of a strict budget regime and pay off plan.
Live to a strict budget for a year and clear your highest APR debts. Then you can think seriously about going interest only. It is only at that point that it might work for you. I personally would not do this because I treat my mortgage payment as absolute priority and I think it is a bad move to get out of that mind set. But it is possible.

You say you can afford the payments. So how did all the debt build up?
Regards



X

IN_LIKE_EVERYONE_ELSE!

Xbigman is as usual, right, you are skating on thin ice. Who valued your house? If it was an estate agent valuation you can knock 25k off it. To consolidate, the new lender will send a chartered surveyor over for a drive-by valuation, then secure against the property. I would consider other avenues. Dpo not borrow against your property in a sticky housing market. Good luck.