to re-mortgage or not

peewa

Hi everyone

I currently have a £85000 mortgae on repayment with abbey/santander.
I am on a fixed rate until 2012 5% early redemtion is £3600
My wife has run up debts of £14000.

Should i

1. remortgage
2. wait till the 2012 and change then
3. switch to intrest only untill we get sorted

Thanks for any suggestions

Peewa

Yorkie1

I am not an expert but remortgaging with £14K of debt sounds improbable. You'd have to find a better mortgage product, and get the lender to accept you. You do not say what your loan to value is (what's a conservative estimate of the house value?) but lenders are increasingly picky with higher LTV. Even in 2012 you may be unable to remortgage, and consolidating debt onto mortgage lending is generally not recommended.

I don't know enough to comment on the IO option but again that is not guaranteed, and could cause difficulties for your credit record in the future depending on how the lender treats the reduction in payments.
Edit: see this thread for a similar question re IO: https://forums.moneysavingexpert.com/discussion/2933800

Without wishing to pry, the main issue is to sort out what's caused the debt to accumulate. Then, work out ways to repay it.

Get yourself over to the debtfreewannabe board on here, post a list of incomings and outgoings (statement of affairs) to see where reductions might be made. Also contact one of the debt relief charities who will help you for free. Good luck.

Thrugelmir

In answer to your questions

1. The debt may restrict your remortgaging options. As lenders are increasingly unwilling to consolidate debt. Those that do may not offer the best deals.

2. Average mortgage rates may well be 5% by 2012 in any event, possibly higher. Though you wouldn't incur the ERC by waiting.

3. Not your choice. Your will require your lenders approval. As you will in essence be paying off unsecured debt in preference to to the mortgage. Your lender may well decline on this basis. Expecting you tackle your own personal finances first.

As Yorkie1 has suggested. A visit to the DFW board should be your first course of action.