What to do...advice would be appreciated

R6Nick

Hi all

My parents are in a situation now where they can afford to tackle their debts but just dont know the best way and I wasd hoping you experienced folk on here could give some pointers.

They have 2 and a bit years left on an interest only mortgage but currently pay extra towards it. Its looking like there will be a shortfall of approx 4k in December 2013.

They also have a credit card with approx 3k on it but just in process of transferring to 0% balance transfer card so in 18months to 1 year this will be gone if they maintain current payments.

Should they switch to repayment now and extend for 5 years (early fifties so no probs there) and when credit card gone divert that payment to the morgage? this would then clear the mortgage in approx 4 years if the figures I have correct.

Dad is thiking about taking a loan from credit union in Dec 2013 to pay off shortfall but with no set timescale on loan being paid with them I feel there is no set plan to becoming debt free?

Suggestions would be appreciated, hate seeing them waste money.

Many thanks

Nick

katsu

Hi Nick,

You will probably get a better response on the Debt Free Wannabees forum or the main mortgages forum rather than the mortgage free one as this is more of a diaries board.

Good luck in helping your parents

Captain_Pie

Hi Nick -

If it were me, I would switch the mortgage to a repayment mortgage now and be 'over' paying whilst rates are still low.

Switching the credit card to an interest free transfer is a good plan and if you can find one for the life of the balance, I would pay the minimum possible each month - divert everything else to paying off the mortgage.

I don't know what Credit Union's T&Cs are, but please make sure whatever they do, they don't get a loan that is secured on their property!

Better to have the debt on a 0% transfer credit card and unsecured, than being left with a shortfall on the mortgage and the loan secured on their home.

All the best,

Captain Pie

R6Nick

Thank you both.

Will try to post in right place next time..wont bother with this one though as we've not got the balance onto a 0% card and think they will just pay as much to the mortgage as possible.

Will def check the T&C's for the Union.

Thanks again

Nick