Consolidating debt to mortgage

elzie

Hello, This is my first post so hope it sounds ok??

I have about £13k off debt and have just put my house on the market and a sale has hopefully been accepted already!! On selling the house I have made £61k (sadly only on paper though isn;t it?!) but I would like to know if it worth adding my debts which are a loan and a couple of 0% credit card BT to my next mortgage??

I am really looking to clear the debts and have a good nights sleep for once and then overpay on the new mortgage repayments...

Does anyone have any suggestions regarding this??

Much appreciated
Elz

DiggingOut

Pros:
1. Mortgage interest is at a lower rate (except for the credit card debt at 0%).
2. You don't have to worry about finding the next 0%.
3. You won't damage your credit rating by continuing credit card tarting to keep card debt at 0%.
4. Since mortgage debt is spread over a longer term, you will have lower payments if a crisis hits.

Cons:
1. If you fail to make debt payments, you mess up your credit rating. If you fail to make mortgage payments, you lose your home. So by increasing your mortgage, you put your home more at risk.
2. You may have prepayment penalties on your loan, many do.
3. If you don't overpay, you will pay far more interest in the long term because of spreading the payments over the longer term.
4. You will pay extra interest on your credit card debt, if you have it at 0%.

If you do this, set up a standing order for the overpayments. Make it just as much as the payments you are paying now on your debt, so the extra debt is cleared off of your mortgage just as quickly as it would have been cleared if you hadn't added it to the mortgage. That way, you won't pay extra interest.

One option to consider. Take out a flexible mortgage large enough to pay off the credit card debt. Then, pay the amount of your credit card debt as an overpayment in the first month. Now, you have an overpayment you can draw down to cover the credit card debt, but you aren't paying interest on it.

When your 0% period on your card ends, you can decide -- do I want another 0% card, or do I just want to end the game? If you just want out, you can draw down your overpayment and pay off the card. But at least you won't have been paying interest on it when you could have had it at 0%.

Yorkieds

Well its achievable, and depending on the type of mortgage that currently exists your monthly payments could decrease.
Have a look at all the mortgage options available or ask a mortgage broker to identify the best deals to suit your circumstances.
I used London and Country.

Others may suggest that this is not the way forward.

YDS

Yorkieds

Hi Elzie (Elsie?)

If you are the same person you have already picked up on DIM's thread, if not take a look !

YDS