Secured v non secured dilemna

Spendaholic_Chick

I just spent aaaaaaaaaages typing out my dilemna, only to lose internet connection and have it swallowed up :mad:

So, here goes again!


I know that moving unsecured debt to secured is the cardinal mse sin, but in the situation I have found myself in,it seems to be making more and more sense to me to do so. I've been dithering over this for weeks, even months and can't make a decision, so thought I'd throw it out there for comments/advice!

I have around £15k debt . There, said it.

I have juggled and jiggled with o% cards until I have exhausted them all. I think I'm fairly savvy with the mse stuff (in theory,at least!:o )

I have around £55k equity in my house. It's been on the market for almost a year but no joy so far. If it had sold,the plan was to buy a smaller place (which is what I want anyway,not just to free the cash),pay off the debts and go to my friend's wedding in the US in August.

Some of the debts are on low,life of the balance deals but others have now reverted to the huge rates and I've run out of places to shift them to :rolleyes:

I was thinking of borrowing enough against my mortgage to pay off the hugher rate debts, and pay for the holiday (probably around £10k in total) then starting an overpayment schedule on the mortgage afterwards.

Does this make sense to anyone but me,or am I mad?

Any advice appreciated (but please don't judge me for wanting to attend a dear friend's wedding and give my DS a fab holiday!)

ZTD

Spendaholic_Chick wrote: »

I know that moving unsecured debt to secured is the cardinal mse sin, but in the situation I have found myself in,it seems to be making more and more sense to me to do so. I've been dithering over this for weeks, even months and can't make a decision, so thought I'd throw it out there for comments/advice!

I have around £15k debt . There, said it.

I have juggled and jiggled with o% cards until I have exhausted them all. I think I'm fairly savvy with the mse stuff (in theory,at least!:o )

How quickly are you/have you been reducing these debts while they've been on the 0% cards?

Spendaholic_Chick wrote: »

I have around £55k equity in my house. It's been on the market for almost a year but no joy so far.

If your house is not selling for £55K more than you paid for it, then you don't have £55K equity...

Spendaholic_Chick

To be honest, I haven't been reducing them by much at all - more keeping afloat than anything else.

There are no houses moving in this area, the £55k equity is from what it's on the market at (£15k less than valued at less than a year ago) and what the mortgage company bases it's decision on whether to lend me any more...

ZTD

Spendaholic_Chick wrote: »

To be honest, I haven't been reducing them by much at all - more keeping afloat than anything else.

So if you haven't been paying them off when you're being charged £0/0% interest, what are you going to be doing when you're being charged your lender's SVR (5%? or £750? per year or ~£63 pcm) on your credit-card debt? And then you'll be increasing it by an unspecified amount for your holiday on top of that, which I'm not quite sure what the nett amount of that will be.

Do you have a plan?

Spendaholic_Chick wrote: »

There are no houses moving in this area, the £55k equity is from what it's on the market at (£15k less than valued at less than a year ago) and what the mortgage company bases it's decision on whether to lend me any more...

That's if you want to borrow. But if you want to sell, you'll get less. Of course selling has the advantage of not having to repay it.

Spendaholic_Chick

I've been paying them off, of course, just not significantly.

Sorry,thought I'd get some advice here,not judgement. My bad.

ZTD

Spendaholic_Chick wrote: »

I've been paying them off, of course, just not significantly.

Sorry,thought I'd get some advice here,not judgement. My bad.

I'm not judging you. When you spend your money on is up to you, and I've not asked what you've spent your money on.

You are putting your debts onto your mortgage, but it seems you haven't calculated through to see what that does to your monthly outgoings. You are only treading water with your current outgoings, and that's at 0%. At 5% from what you're saying, you will sink. Is that right or wrong?

Do you have a current SOA?

Do you have a SOA calculated from the assumption that you do remortgage and with the revised outgoings?

Two years ago, you could have remortgaged again if you got behind with your mortgage. In the current climate, you get one shot (if that) at it, and so it's in your interests to make that the best shot you can take.

Remortgage, like a consolidation loan, like 0% cards, is not a magic wand. All it does is buy you time. Time that you can use wisely or not. Your debt does not go away once it's on your mortgage. It is just in a different (arguable more dangerous) form.