Remortgaging - is this possible ?

Beaker181004

Hi folks,

Is this possible ?

Salary - £36K (my salary only, as missus at home with the four kids....all under five :eek: )
Debts - £38K (loans, credit cards, overdraft)
House price - £275K approx
Mortgage - £258K
Current Mortgage monthly payment - £1250 (A&L 4.99%)
New mortgage monthly payment from July onwards (base rate + 0.75) = £690 (1.25%)

Now, we will be saving approx £550 in interest from July, based on current BOE interest rate, BUT we can't keep on paying the £1250 rate and chip away at the mortgage debt as our outgoings are more than our money in.

So can I :

1) Remortgage and get a lump sum to say pay off £20K of the debt

2) Would it be wise to remortage as our repayments would go up so as much as our other debt repayments would go down, the new remortgage lump would simply replace them ?

What do people think ?

Thanks

Beaker181004

SouthCoast

With an existing mortgage of over 7 x income you need to go here:

Facing the prospect of repossession can be frightening, but it’s important to remember that you are not alone. There is a lot of help available from government, from lenders and from advice agencies. The information here will give you the tools you need to prevent your home being repossessed. You'll also find stories from some of the 330,000 homeowners who have already received help and advice.

http://mortgagehelp.direct.gov.uk/default.aspx

somethingcorporate

Beaker181004 wrote: »

Hi folks,

Is this possible ?

Salary - £36K (my salary only, as missus at home with the four kids....all under five :eek: )
Debts - £38K (loans, credit cards, overdraft)
House price - £275K approx
Mortgage - £258K
Current Mortgage monthly payment - £1250 (A&L 4.99%)
New mortgage monthly payment from July onwards (base rate + 0.75) = £690 (1.25%)

Now, we will be saving approx £550 in interest from July, based on current BOE interest rate, BUT we can't keep on paying the £1250 rate and chip away at the mortgage debt as our outgoings are more than our money in.

So can I :

1) Remortgage and get a lump sum to say pay off £20K of the debt

2) Would it be wise to remortage as our repayments would go up so as much as our other debt repayments would go down, the new remortgage lump would simply replace them ?

What do people think ?

Thanks

Beaker181004

I think you are at about breaking point in terms of your finances. Your debt is over 8 times your income and you have 4 kids and a wife that isn't working to support.

You don't have the equity in your house to remortgage and release any capital and looking at your finances the bank would be insane to entertain such additional risk.

You need to use the additional money available to pay down your debt, starting with the highest APR (probably on your cards).

Good luck, sorry I cannot be more positive but it looks like you are going to need it.

opinions4u

You have no equity so you can't remortgage or raise capital against the property.

This is before considering the 6.5 x income multiple.

I would suggest that you are mightly close to severe financial difficulties. Get over to the Debt-free Wannabe board for advice on increasing income / reducing outgoings.