Parents remortgage or Home loan or equity loan

dmwg40

Hello All

Not sure what the right area to post this
My parents are thinking of get some of the value out of there house. they are struggling with some credit card debts and just want to make things easier. they are fed up with the weekly phone calls etc.
not sure if they should remortgage or get some sort of loan against the property or just a loan in general

one I am in no position to lend them the money to help clear this debt.
they have a property worth say 250k,rough estimate on the low side they have a mortgage of only around 20-25k with about 4/5 years to go.
its a endowment mortagae
My mum is a mobile hairdresser and dad is retired through medic reason. they are both 60.

they need to borrow in the region of 25-30k

what would be the best way to do this.

thanks in advance

SouthCoast

Have a look at The Debt Free Wannabee Board.

You will find that turning unsecured debt into secured debt is not normally advised.

dmwg40

so what other options are there then?

they can just get a normal loan I guess.

anyone a else got any views

milliemonster

I wouldn't have thought they would get an unsecured loan for that amount, I would have thought it would be around £15k max?

If they have unsecured debt of say £30k, if they add that to the mortgage anyway that is going to take their mortgage debt up to £55k, can they still get that paid off in 5 years?

Also, it sounds like they are already missing/defaulting on payments (hence the weekly calls from debt collectors?) if this is the case, they would be unlikely to be accepted for further credit anyway at the moment as you will find their credit rating will have been affected.

You need to go over to the DFW board and post an SOA, you will then get advice on how to manage their debt rather than securing it on their property

luckyfool

Their other option is some form of equity release product or lifetime mortgage. Possible loan sizes on these will vary depending on the youngest of their ages.

vicshippers

Have they considered downsizing the house? Move into somewhere smaller - pay off the rest of the mortgage - pay off the credit cards.