Is a remortgage a good idea to clear debts?

patient44

I have £3000 on a credit card + about £3000 (2 years left to run) personal loan. I am on a fairly low wage and whilst I can pay the bills can never save anything and seem to launch from crisis to crisis - eg one looming on the horizon is my becoming pressing need for a new boiler. Should I remortgage and pay all debts off, using the remaining money to get jobs which need doing done?

Tixy

Remortgaging has 3 major disadvantages.

-Because you usually pay off the amount over a much longer period you vastly increase the amount of interest you pay.

-Because you will have increased the loan to value when you next come to get a mortgage you may not get such good rates.

-Because you have moved the debt from unsecured debt to secured debt should something unforseen happen (lost job, nable to work through ill health) then you have increased the risk you could loose the roof over your head.

Consolidation of any type is generally is rarely a good idea for all those reasons above and because it doesn't address the route cause of the issue, spending more than you earn. And it is all to easy to run up additional debts again afterwards (just ask on here -so many of us have done it)

Have you written out a detailed statement of affairs to work out exactly how much you have left each month for debt repayments (and for saving an emergency fund)? If not this is the first step. http://www.makesenseofcards.com/soacalc.html

Have you tried/considered trying to move the CC balance to a 0% card or low life of balance card?

Is there anyway you can increase your income? have you looked for ways to cut the costs of your outgoings?

WASHER

I totally echo Tixy's post.

Consolidation/remortgage is rarely a good idea.

An Soa would be a great idea, as would a spending diary.

Have you dropped a brand in the supermarket, lots of money saving tips on old style board. I could give you lots of money saving tips as regards to making your grocery money go further. If you are interested I would be pleased to share some of them with you.

Do you have SKY, or a mobile phone on an expensive tariff, look to cancel these or reduce package - lots of ways to reduce monthly outgoings to enable you to repay your debts and have a little left over, no need to consolidate, you just need to reduce your outgoings.