Why is the amount we can borrow so low?

Leon_W

p00hsticks

That was why I very carefully (and deliberately) stated that you need a mortgage deal that you can overpay on.

You can continue to pay the same amount that you would be paying on the cards but the balance will reduce significantly faster.

Wakey2008

There must be something you aren't telling us.

An income of 27k with debts of 5k should cover the 61k you want to borrow.

If lenders are only coming up with 33k then sorry but can't have told us the full story.

How is the 27k made up? Are you counting tax credits, child benefits, overtime or bonuses in that?

grey_lady

'The blanket "advice" seems to be to not consolidate your card borrowing on a mortgage yet nobody has bothered to ask what rate you are paying on them ? Crazy.'

Actually not crazy at all - one of the finanical sites did a survey on this and 80% of people who responded had not only swopped their unsecured debt for consolidated/secured, they'd then go on to run up yet more unsecured debt.

mambo69

I think the idea of putting it on the mortgage is a sound one, as long as you continue to overpay and dont run the credit cards back up.

If you put an additional £5000 onto a mortgage over 15 years and then overpaid by £100 a month at a rate of 4.29% then you would take the mortgage period down to just over 11 years.

I am thinking of doing something similar, but at the moment am not in the position not to put it back on so instead am trying to get on top of them first.

Thrugelmir

grey_lady wrote: »

Actually not crazy at all - one of the finanical sites did a survey on this and 80% of people who responded had not only swopped their unsecured debt for consolidated/secured, they'd then go on to run up yet more unsecured debt.

Precisely why debt consolidation by remortgaging is proving far more difficult. As lenders make more money on unsecured lending than secured.

luckyfool

grey_lady wrote: »

'The blanket "advice" seems to be to not consolidate your card borrowing on a mortgage yet nobody has bothered to ask what rate you are paying on them ? Crazy.'

Actually not crazy at all - one of the finanical sites did a survey on this and 80% of people who responded had not only swopped their unsecured debt for consolidated/secured, they'd then go on to run up yet more unsecured debt.

Slightly patronising attitude to take though, treat the OP like a child and assume they cannot act like an adult. Fact remains is that it is much better financially to consolidate the debt on a rate of c.4% and then pay it off faster through overpaying than to pay 18%+ on it as a credit card, and potentially still take 20-25 yrs to pay it off at the minimum payment.

Naturally if you do the optimal thing with the credit card (i.e. pay it off quickly over 2-3 yrs by massively overpaying) and do the sub-optimal thing with the mortgage (pay the debt off over 25 yrs at the lower rate + possibly run more debt up on the credit card) then in that scenario you would have been better off doing option 1. This ignores option 3 which is consolidate the £5k to the mortgage and pay it off through overpaying it quickly and NOT running up more credit card debt.

mambo69

option 3 which is consolidate the £5k to the mortgage and pay it off through overpaying it quickly and NOT running up more credit card debt.[/QUOTE]

This is the hard part though, probably 90%+ end up with the debt back on the cards

firstaspect

How much do you pay for your credit cards a month? Try the santander.co.uk calculator.