Possibly a daft question and a mad idea

Smurggle

We are currently in negative equity but really want to get a decent deal when our current one is up in June. Our house has been valued at about £165000 and our mortgage is £168500, I am thinking about paying off a lump sum off the mortgage with a 0% credit card (both me and my husband have deals offered to us at the moment that would give us enough credit) and then paying this off over the next year (before the 0% runs out) as I have budgeted and can afford to.

Is this a crazy idea?
Any opinions would be great!

Smurggle

oh I meant to say as well that we are with Halifax and they have said that they would offer us any of their 95% deals come the time of remortgage.

Cheers

_Andy_

To get anywhere, you'd need to be paying 10% off, so c£17k. That's assuming the valuation was by a valuer not an estate agent.

One issue with this is that it could affect your affordability from a lenders point of view (they'd take a minimum payment of probably 3%).

Personally I think it's quite risky. An alternative would be to concentrate on overpaying as much as you can over the next year.

_Andy_

Smurggle wrote: »

oh I meant to say as well that we are with Halifax and they have said that they would offer us any of their 95% deals come the time of remortgage.

Cheers

In that case I think you'd probably be better off staying with Halifax and just overpaying over the next year.

Robert_Sterling_3

Smurggle wrote: »

I am thinking about paying off a lump sum off the mortgage

How much is a large lump?

Smurggle

OK, I just thought that I would save more in the long run by not paying interest on the money that was paid off the house. The valuation was by Halifax and was incredibly pessimistic (but I would say that wouldn't I?), they think our house has devalued by 20% in 18 months.

Smurggle

we thinking of paying off £12K which we could pay off in a year and would give a small buffer zone for further drop between now and May.

Trying_to_be_good

My tip would be to keep your financial life as simple as possible - overpay on the mortgage (assuming no penalties) or save and overpay when you come to remortgage.

Unclepetey

A practical point, but have you checked that your credit card companies will allow you to "spend" by making payments to your mortgage account?

robnye

the other question is how much will halifax allow you to overpay by each month?

dimbo61

Not worth paying the 2.75/3% fees to the CC companies so just overpay what you can afford.
Check with lender if allowed and get in the habit of overpaying and building up the equity in your home GOOD LUCK