What next - totally thrown off course

Rockporkchop

I am generalising of course but someone who has built up that amount of debt on credit cards is unlikely to be disciplined enough to just pay off the money, cut up the credit cards and not get into that position again. In my past experience (I used to work as a debt counsellor) I found that the extra money freed up each month plus all other cash was soon spent and then it was consolidation after consolidation until the house was maxed out.

They are in the fortunate position of owning their house outright, after taking financial advice. I would assume that they were advised to do this because, with one of them being critically ill, it makes more sense to have a secure roof over their heads. When it comes to debt, credit card companies are a low priority, the OP could offer £1 a month if things got really bad. Unfortunately mortgage lenders are at the top of the list and the OP would have the house taken from under them at the worst possible time.

That is just my personal opinion though.

opinions4u

Rockporkchop wrote: »

I am generalising of course but someone who has built up that amount of debt on credit cards is unlikely to be disciplined enough to just pay off the money, cut up the credit cards and not get into that position again. In my past experience (I used to work as a debt counsellor) I found that the extra money freed up each month plus all other cash was soon spent and then it was consolidation after consolidation until the house was maxed out.

They are in the fortunate position of owning their house outright, after taking financial advice. I would assume that they were advised to do this because, with one of them being critically ill, it makes more sense to have a secure roof over their heads. When it comes to debt, credit card companies are a low priority, the OP could offer £1 a month if things got really bad. Unfortunately mortgage lenders are at the top of the list and the OP would have the house taken from under them at the worst possible time.

That is just my personal opinion though.

My personal opinion is that your one size fits all approach denies many sensible people the opportunity to improve their financial position.

I understand and, to some extent, agree with your sentiment. Borrowing any money, secured against property or otherwise, should only be done with due consideration on the part of the potential borrower.

But taking your logic to the Nth degree you are basically saying people shouldn't secure any debt on their house. So why not apply your theory to a mortgage as well?

Rockporkchop

I'm not talking about "people" though, I am talking about the OP, who has critical illness in her family and needs a secure roof over her head at this time. Obviously there are different solutions for other people.

If you are critically ill, the last thing you need is the threat of repossession hanging over your head.

Rockporkchop

opinions4u wrote: »

But taking your logic to the Nth degree you are basically saying people shouldn't secure any debt on their house. So why not apply your theory to a mortgage as well?

I won't even comment on your last sentence. What I am saying is that some people use the equity on their house as some sort of virtual cashpoint once they have maxed out their credit cards. This should never be considered a good idea.

luckyfool

Ultimately unsecured lenders can, and anecdotally, have started to apply to courts for charging orders against peoples property. Not securing the debts against the home on cheap mortgage finance is no guarantee at all that the property could not be put at risk if the debts are not paid.

Rockporkchop

The OP hasn't been offered "cheap mortgage finance", she was offered an HSBC Home Owner Loan with an APR of double the mortgage rate.

Anyway, I won't hijack the OP's thread anymore.

Best of luck OP, I hope it all works out for you.

luckyfool

All the more reason to look at a remortgage with a more suitable lender.

opinions4u

Rockporkchop wrote: »

I'm not talking about "people" though, I am talking about the OP.

You actually said: "You should never turn unsecured debt like credit cards into secured debt."

This was clearly a generic sweeping statement to apply to all people.

I won't even comment on your last sentence.

Why not? Similar risks apply to a home purchase loan. I was interested in hearing you expand on the differences.

What I am saying is that some people use the equity on their house as some sort of virtual cashpoint once they have maxed out their credit cards. This should never be considered a good idea.

No, but when a 'lightbulb' moment has occurred it can be the key to solving the historic problem. Remove that option and you remove the only option that somebody had to sort themselves out.