Want to remortgage? Am I being stupid?

niccid_2

Ok so we have recently put the house on the market for £339,950 I want to clear our debt and buy a newer house! However I love the house we are in now just don't have the spare cash to work on it.

So I am looking at an option B.

We are tied into our mortgage for 5yrs its £207000.
We have debts (secured loans x2 and credit cards) of £50,000 ouch!!!!!
Its going to cost us about £10000 in ERC

I've been to our current mortgage provider and they won't lend us anymore due to our incomes. Which are:
£30000 plus a car allowence of £4500
£28500 for my partners income (Joint mortgage)

My end result would be to pay of all our loans, and free up some monthly money to save and put into the house again. And repay our mortgage rather than just the interest we are paying at the moment.

Does anyone know if we can get a £260000 mortgage on our income? and do you think I am mad trying to do all this and its going to cost a lot to do it but in the long run I think we will be so much better off........unless the house sells and then we will be much better off cos we can pay everything off anyway.

Sorry to waffle on!!! Any advice welcomed!

getmore4less

You are probably at the limit of your lending(you overstretched if you went I/O)

Taking a £10k hit to consolodate is madness(you need £267k not £260k)

If they will let you port buy a cheaper house on repayment and pay off the debts.

Review why you got in the mess and stop it happening again.

If you want to stay then forget DIY and tackle the debt first.

Try debtfreewanabee board.

beecher2

Seems a bad idea to pay £10,000 simply to secure all of your debt in your property.

I'd suggest going to the Debt Free Wannabee forums, posting a Statement of Affairs, and getting help on tackling the debt head on. They'd help you free up money in other ways.

niccid_2

Thank you both! Our option A is to sell the house and yes buy a cheaper house £250 max which will sort out all our debt.

I will take your advice and look on the wanna be's

Any other views???

Jazzie99

Agree with all the above. You really need to sort your debts out first.

I dont know your age but you 'sound' youngish... think about your future plans... children, nursery fees, maternity pay/leave. What happens if you lose your job, get sick etc. Do you really want to overstretch yourselves?

We have a joint income of £70k and a mortgage of £125k. But we also have 2 boys under 5. We need a bigger house but we would rather wait, pay off our debt (as in my signature), save and then move in 2 years time.

We were so reckless with our money before kids...... if only we knew then what we know now about debt and living within your means!!