Help-in debt but is remortgage the answer. Advice pls

neenmarie

I am just contacting you as we need a little advice regarding our mortgage and debts. Our property is at a value of around £186,450 and the amount left to pay on the mortgage is £74,000 (we borrowed £129,000 including the interest as we had a large deposit). At the moment we are on a tracker mortgage and our monthly payments are just under £300 per month. Unfortunately we have managed to obtain some debt due to us getting married last year and me being out of work for a few months back in 2009. We are hoping to consolidate our debts with a remortgage and would need to borrow around £100,000 (74,000 left on the mortgage with the current lender and the rest towards our debts/few home improvements). Please can you tell me if this would be a possible thing to do and if it's our best way of getting out of debt? We really don't know which way to turn and whats the best thing to do in our situation. My husbands credit score isn't briliant as he has a few defaults which are small and will come off the credit report next years as the 6 years will come to an end. Thanks

Wh05apk

The cheapest way to borrow, aside from interest free special deals is on your mortgage, however potentially it wll be spread over a much longer period, but there is nothing to stop you borrowing the extra on your mortgage over say a 5 or 7 yr period which will probably be far less than the interest you are paying now.

Would you get the remortgage? assuming you have taken the cards/loans recently, then your credit can't be that bad, worth speaking to someone to see what is possible given your income etc.

IMF

In my opinion... If your husband has a default; you're best off trying to remove that default first (search this forum) or wait until it's removed to get the best rate or you might be looking at paying interest of around 6.9% which would put your payments up to 708 per month (25 years mortgage). Are your current debts more than 408 per month?

Just work out the affordability and work out if it's worth it now or later.

(I'm not a mortgage advisor so others will give better help)

neenmarie

We have contacted the compaies involved and experian and they say they can't remove them until the 6 years are up which is stupid as they are for such small amounts (£200). I have 3 late payments total of £90 but again they won't remove them or tell me how long late payments stay on the credit report for. Does anyone else know? Thanks

Wh05apk

If the defaults/late payments are correct, they are fact, and cannot be removed, after 6 years then they will effectively be ignored, but will likely still show.

Your best option is to speak to a broker, let them have a copy of our credit report, and get an agreement in principle.

getmore4less

Do a proper analysis of you finances before resorting to the secured debts.

Have a look at the debtfreewanabee board.

A SOA and a proper forward looking budget will give you a much better picture of the options and a projected debt free plan and mortgage free plan.

Work out the full costs of the loans against a mortgage

Securing some of the debt might be part of the plan but just securing all of it and taking on more debt is just borrowing from your future self.


Stepping back and having a good look will reduce the risks that you fall into the same position again.

neenmarie

I can see what you are saying but we really don't have any spare cash at the moment to put towards the debts. our mortgage plus the debts are about £800 per month whereas if we remortgaged we could hopefully get an out going of around £550/£600 pewr month which will leave us some spare. We are also desperate to have a baby amd this will not be possible if we have to pay out £800 per month. Also I am due to inherit alot from my uncle (horrible to think about i know) but this money will go on the mortgage to bring it down.

Moglet

Wh05apk wrote: »

If the defaults/late payments are correct, they are fact, and cannot be removed, after 6 years then they will effectively be ignored, but will likely still show.

Your best option is to speak to a broker, let them have a copy of our credit report, and get an agreement in principle.

Is that right, I thought data older than 6 years *dropped off* your credit file and was no longer seen.

Thrugelmir

neenmarie wrote: »

if we remortgaged we could hopefully get an out going of around £550/£600 pewr month which will leave us some spare.

Debt consolidation is rarely the answer. While it reduces the monthly outgoing. It merely extends the repayments beyond the horizon. You choose to spend "money" on your wedding that you didn't have at the time. So look at your budget and cut back now to repay the money.

getmore4less

neenmarie wrote: »

I can see what you are saying but we really don't have any spare cash at the moment to put towards the debts. our mortgage plus the debts are about £800 per month whereas if we remortgaged we could hopefully get an out going of around £550/£600 pewr month which will leave us some spare. We are also desperate to have a baby amd this will not be possible if we have to pay out £800 per month. Also I am due to inherit alot from my uncle (horrible to think about i know) but this money will go on the mortgage to bring it down.

Even more of a reason to do some proper planning and analysis of your finances to make best use of the money.

You initialy had a big deposit and have eaten into that by getting into more expensive debt, next is the remortgage and then uncle get out of jail money, but you have no idea how much you need to keep back to fund a possible child why not borrow less and wait a bit to do the improvments.

Take control and plan properly.

Relying on an inheritance is a very risky stratagy there are so many ways this can change unless they are dead allready.

neenmarie

The trouble is most of the dbt isn't mine and my husband has run up around £15000 without telling me! I'm trying to sort this big mess out!!!