Loads of equity in house but loads of credit card debts

[Deleted User]

Credit card debts of about £20K. Came from a time when I was out of work/off sick.

Fortunately, they're all on low interest rate of between 3.9 and 7.9%. However, minimum payments are costing about £550 a month (£120 of this is interest).

Good news is I'm working now and between us earn a decent wage, so this isnt something we cant pay. Although its not great.

On the plus side, our house is worth about £220K. Outstanding mortgage is £128,000, so we've got a fair bit of equity in it. We were lucky to buy at the right time. Also, we've got a VERY good mortgage deal too which is something like base rate +0.5%.

Just wondering if there was any way, or is it even advisable, to try and turn this equity into a way of paying off my credit cards?

I guess remortgaging and moving to another company wouldbt be such an idea because I wouldnt get as good a deal as I've got.

LilacPixie

Shifting unsecured debt to secured debt is rarely if ever a good idea.

My advice would be so a budget and throw all your spare cash at the highest APR debt first to clear them all slowly.

[Deleted User]

LilacPixie wrote: »

Shifting unsecured debt to secured debt is rarely if ever a good idea.

My advice would be so a budget and throw all your spare cash at the highest APR debt first to clear them all slowly.

Yeh. True. I can see your point....

[Deleted User]

[quote=[Deleted User];35436085]Yeh. True. I can see your point....[/QUOTE]

although I'm thinking to a certain extent, OK, I'm lucky to have equity in my house and mortgage is a very good rate. Some people have got negative equity and a pretty high interest rate.

So, why not take advantage and add say £10K? £138K instead of £128K doesnt make a huge difference but it cuts my credit card bill in half and my monthly repayments by about £280....

Fiddlestick

[quote=[Deleted User];35436725]
So, why not take advantage and add say £10K? £138K instead of £128K doesnt make a huge difference but it cuts my credit card bill in half and my monthly repayments by about £280....[/QUOTE]

Presumably you will then chuck that additional £280 are your remaining debts to pay them off quicker, right?

Sibley

I'd just get a loan mate. At least you know where you stand and the debt WILL be paid off. Shuffling it about on cards is tricky. You might pay some off then borrow it back. Cut them up and loan the money from the bank.

[Deleted User]

Fiddlestick wrote: »

Presumably you will then chuck that additional £280 are your remaining debts to pay them off quicker, right?

In theory.... :-)

[Deleted User]

Sibley wrote: »

I'd just get a loan mate. At least you know where you stand and the debt WILL be paid off. Shuffling it about on cards is tricky. You might pay some off then borrow it back. Cut them up and loan the money from the bank.

See what you mean. Its just getting a loan could be tricky....

InDeepDebt

How much spare money do you have at the end of the month once you've paid everything?

How disciplined are you - if you added £20k to your mortgage - would you add another £20k onto cards?

Post up a statement of affairs and then we can see where inroads can be made. I wouldn't rule out whacking the money onto the mortgage BUT - it is the easy option and most that do this simply get into debt again on the cards. Trust me - I know (twice).

It's best to ensure that you can live within your means first - then live within your means - and then, if you really want to, bung it onto a second mortgage. With the extra that you'll be saving, pay off this second mortgage - you won't get it at 1%.

My views but hope they help.

JIM

[Deleted User]

InDeepDebt wrote: »

How much spare money do you have at the end of the month once you've paid everything?

How disciplined are you - if you added £20k to your mortgage - would you add another £20k onto cards?

Post up a statement of affairs and then we can see where inroads can be made. I wouldn't rule out whacking the money onto the mortgage BUT - it is the easy option and most that do this simply get into debt again on the cards. Trust me - I know (twice).

It's best to ensure that you can live within your means first - then live within your means - and then, if you really want to, bung it onto a second mortgage. With the extra that you'll be saving, pay off this second mortgage - you won't get it at 1%.

My views but hope they help.

JIM

Cheers Jim. Yeh, must admit have added money on in the past to pay off debts and now I'm back to square one. :-(

[Deleted User]

[quote=[Deleted User];35439275]Cheers Jim. Yeh, must admit have added money on in the past to pay off debts and now I'm back to square one. :-([/QUOTE]

Where do i get blank SOA?