Getting a larger mortgage with Debt

poohwithmoney

Hey,

I have a mortgage with Northern Rock for £88,000 fixed at 5.99 until April 2011 (it was over 5 years) it's a together morgage with a unsecured loan of £27,000. My Flat is now worth £110.000. I also have a secured loan with picture!! £36.000 ( i've had this for 4 years) and then around £20,000 on credit cards. I moved back to parents as i was in so much debt and rent the flat out. However, my parents are moving away and i need to move back to the flat. However, if i do this i'll have about £40 a month to live on after i've paid all the debt and bills.
I earn quite a good Salary £31,000 a year. What i'd love to do it put all the debt and mortgage into one and pay an montly payment which is hopefully a lot less. I take home £1946 a month and end up paying £1557 back in debt (mortgage inc) a month. If i could put it all into one and pay about £1200 i'll be able to manage. Has anyone ever heard of doing this.

Thanks
x

vectistim

Yes, it is possible to include all your debts in one big debt, but 1) you're then repaying short term debts over a much longer time 2) you wouldn't be entitled to it anyway.

Asset: £110,000 Debts: 88+27+36+20 = £171,000
Income £31,000

On that basis you can forget about remortgaging. Look at your debts and try and pay off whichever has the highest interest rate, try and transfer credit card debt to whichever card is charging the lowest rate.

Your parents are moving away, is there any chance of some assistance from the Bank of Mum and Dad?

_Andy_

Not possible as it would be well over 100% LTV.

ETA: Post a SOA on the DFW board as your current situation isn't sustainable.

sdooley

OK the one glimmer of hope is that your together loan is still tied in with your mortgage so has the same rate (very low for a personal loan) and come next April your payments on that will reduce to Northern Rock's standard rate. That said your overall debts are unsustainable.

The mortgage and together loan you have to pay and the loan with Picture you may have to pay, as you lose the flat if you don't, but the credit card minimum payments (say 2.5% on £20,000 so £500 per month) will never make a dent in the credit card balance at standard credit card rates (which is all you will get in future). You need to speak to the consumer credit counselling service or similar to get a freeze on the interest of your credit cards and a reduction in payments to a level which you can afford. It may be that even Picture agree to take a cut in their payment as they rank behind the bank in security - if they made you sell the flat now they would not receive anything.