DMP & Re-Mortgage

symesd

I currently have a fixed rate mortgage (£118,000) and an additional Secured Loan £20,000), I also have a large amount of unsecured debts (£33,638)which are under a Debt Management Plan.

I want to know if it is possible to reduce my outgoings by Re-mortgaging, I may have enough equity £Current Approx Value £165,000) in the house to Re-Mortgage and merge my current mortgage & secured loan to save a lot of money each month. This way I could allow more money each month to pay off my unsecured debt.

BUT:::: Would there be a sympathetic lender who would realise that re-mortgaging would allow me to pay off my debt quicker.

Any advise please. I have no mortgage arrears, or arrears on the secured loan, but have arrears on the unsecured debts as I was struggling to pay each month which is why I entered into a Debt Managment Plan...

Thank You

feisty1

You would have a penalty for coming out of yr fixed rate that added to yr secured loan is likely to exceed 85% LTV adding this to yr credit history, I think you would struggle to find a lender prepared to take the risk.........however it is better you take advice as this is purely opinion.......

Conrad

From what you say I do not think there are any options currently.
The absolute maximum loan to value currently for people with adverse credit is 80% with rates starting at 6.6%, but more often than not at nearer 9%.

An underwriter would be putting thier neck on the line to lend to you as in future a claim could be bought by you for negligence and it could very easily be argued the lender should not have loaned such a large amount given your other debts and recent history.

Also property valuations are being hammered.

Best of luck and all!

getmore4less

Since the primary goal is cost of debt reduction then attacking the most expensive debt first is a sensible thing to consider.

As people have said combing the secured debts may not be an option and may not actualy reduce the cost if you did due to higher rate.

If the DMP has frozen all interest on the unsecured debt and the secured loan is flexable and more expensive than the mortgage then there is another angle.

If the mortgage lender will allow you to go interest only on the mortgage then you can overpay the secured loan this will reduce the costs of borrowing a bit quicker than the current setup

If interest is frozen on the DMP not a lot of point in paying this off any quicker than agreed while you have debts that have interest.

symesd

Thanks to you all,

I do have planning permission on the house so the value may be higher, already changed from repayment to interest only for mortgage, interest is frozen on all of the DMP debts.

So I guess I will have to ride this out a little longer.

I will continute to do what I have been doing - I have a savings plan up & running now which is for emergencies, and a savings plan which will pay out after 10 years, when I will be debt free and back on track.

I am trying to put extra money away when I can to build up a little lump some to make settlement offers when I can. I have paid off 3 creditors this way so far - only another 17 to go.. Who knows if I keep chipping away the 7 year DMP may be done in 3/4 yrs.

Who knows I may just win the lottery, if I could afford to play....

Best wishes everyone, thank you again for taking the time to read my post.