adding debt to mortgage

pepe2008

Swapping unsecured debt for secured is almost never a good idea. However, if all those debt at 0% are due to start charging interest soon, then you need to pay attention to them NOW.

If you are up to date on all your repayments then it is v unlikely that you would negotiate reduced settlement figures from the lenders.

But it would be a good idea to try and shift borrowings away from those high-interest CCs if you can.

Have you checked your Credit Refs lately, the amount of lenders you have may cause you some problems.

Do you really need to reduce the repayments so low and rely on making overpayments ( beware of your Mortgaege Lenders Rules on overpayments) it would be better to set the regular payment higher.

dave73

none of the cards are 0% i just didnt know the rates of them

dave73

partners income is down as zero because she will help with household bills but my debts are my fault and will deal with them my self

Jesthar

dave73 wrote: »

partners income is down as zero because she will help with household bills but my debts are my fault and will deal with them my self

Right... That makes things a bit more complicated SoA wise, but fair enough.

This one is very, very tight. If you ditch your entertainment, clothing and present budget for a few months then you won't have a shortfall and can meet all the repayments, and if your food budget is for your half only then you can knock £20 off that too (take your own food and drink to work rather than buy, if you don't already), but you'll have to accept that things will be very tight for a while.

You need to find out the interest rates on all yout loans and cards too.

Have you applied for any credit in the last six months? If not, It's worth making one attempt to get a 0% or low interest rate balance transfer card to transfer as much high interest rate debt to as you can.

If not, and some of the lower interest rate cards have spare capacity, see if you can transfer some of the higher interest rate debt to them.

You probably need to be looking at ways to up your income as well - do you have any bits and pieces you could sell/eBay? Even if it only got you a few tenners, every little helps, and if you managed to get a few hundred pounds that's one of your cards paid off in full. There are loads of other ways to get a bit of extra cash too, some (like cashback sites and their free clicks etc.) take a while to get going, but can earn you quite a bit once you get going. And don't forget loyalty cards for things like petrol, especially in your case!

~Jes

Paulgonnabedebtfree

dave73 wrote: »

partners income is down as zero because she will help with household bills but my debts are my fault and will deal with them my self

That makes sense now. Totally agree with that philosophy if she wasn't benefitting from the debt that you incurred. That sounds a really healthy approach IMO.

kissjenn

Dave,

If your car costs are down to you being a taxi driver you need to separate out your personal and business expenses.

The income should be what you bring home after tax and outgoings are your personal costs.

KJ

dave73

so whats peoples views then should i just add all the debt to the mortgage

Paulgonnabedebtfree

dave73 wrote: »

so whats peoples views then should i just add all the debt to the mortgage

I don't automatically say no to this. My view is that it is OK to do this but only under certain stringent conditions.

1) If the reduced monthly outgoings are sufficient to bring your monthly finances into credit.
2) If you feel totally confident that you won't start racking up unsecured debt again after upping your mortgage.
3) That you take a mortgage where you can overpay without adverse penalty (many will restrict this during an offer period e.g. fixed or capped rate).
4) That you get a deal with a fixed or capped rate for at least 2 or 3 years while you make overpayments. This will assist with a soft landing when the cap or fix ends (not so relevant at the moment as rates are so low but surely weill be relevant in a couple of years).
Probably there are other things to bear in mind too.

My fixed rate recently ended and I'm currently saving about £160 a month. Just as well as the clutch on my van started slipping this morning.

What you must do is be honest with yourself regarding your ability not to build up more unsecured debt after mortgaging your previous unsecured debt. It's an easy trap to fall into and it may even be a good idea to cancel some card accounts to avoid temptation. Maybe just leave one or two open with modest limits in case of emergency.
I know some on here will say NEVER mortgage unsecured debt but I believe that there are times when it is reasonable to do so.

black_taxi_2

excellent post paul

its the unknowns/emergencies that banks/credit card accounts count on to bring them home the bacon

Ames

Just one other point - if it's not fair to expect your OH to contribute to the SOA in regards to debt, how is it fairer to risk her home by making the debt secured? I'm guessing that as a taxi driver you don't have company goodwill to fall back on if anything happens and you're unable to work, how would you meet the secured payments then? Unsecured can be negotiated with much more easily than secured.