consolidation

rhood

Hello

I have spent hours looking through this site trying to ascertain the right move.

We have debt of 30K and a mortgage of 145K. We are thinking of putting it all into the mortgage, making us about £500 p/m better off (i know the long term implications - paying more interest) The debt occured to totally renovating our new property. Its worth 220K in this market, average 240K.

Loads and loads of comments say dont do it!!!!

It will allow me to set more aside for the kids without financially crippling us? Also we can overpay 10% of the mortgage per year.

Its a difficult decision, this advice has come from a mortgage advisor so hence the reason im throwing it out there!!!!

Confused!!!

May2013

There are many people on here who are far more experienced than me but I think the golden rule is never move unsecured debt to secured borrowing and never consolidate unless you can be totally disciplined not to run the debt up again.

You've posted at a fairly quiet time but I'm sure someone more in the know will be along soon

Good luck!

rhood

thanks!!! Yeah its taken me this long to look at it all!!!! I know most have said its an unwise decsion in other threads. The credit debt is only for house stuff and we are done now (i hope!!! -lol) so it seems a viable solution? Dont want to put signature down without gauging all opinion.

May2013

It'll certainly be worth hanging on to see what other opinons you get from the guys on here. If no one else replies tonight try bouncing the thread tomorrow to keep it on the front page.

rhood

thanks!!! Will see what happens!!!!

Firewalker

I won't do it! And it is not the interest - it is that the pressure to pay 'bad' debt or all that is on CCs and loans (excluding mortgage) creates discipline and can help you change your habits. We inreased the mortgage couple of times and ended up back in CC debt. Last time we thought 'enough is enough' and started paying - we have reduced our consumer debt by about £50,000 in eighteen month.

Anothe rpoint is that 'you don't get out of debt by getting further in debt' - and this is what you will be doing if you shift it onto the mortgage. You said yourself - 'we'll be £500 better off'. No you won't! You will have £500 more to spend now instead of using it to build a healthy financial future. If I were you, I would:

1) Sit down and make a list of my debts.
2) Figure out exactly how much is my income (well, I didn't know exactly how much my income was so why should most people)
3) Workout a 'debt busting' plan. I will start from the smallest CC, keep paying minimum on the others and get rid of this one. Many will argue to start with the highest interest - no, paying the first card fully is an enormous boost.
4) Do not decrease the money you pay on debt till it is all gone - snowball.
5) If you can generate some more cash early on in the process put it all on the debt - this reduces the time it takes to pay off (and the interest). Great for motivation as well.

And keep going - paying debt off feels great!

Firewalker


Firewalker

joedenise

As others have said Don't move unsecured debt to your mortgage. Do an SOA and post it on here and others will be able to see areas where you could save money.

Denise

sharronej

I was also thinking of consolidating until I found this site

http://www.whatsthecost.com/snowball.aspx?country=uk

Totally changed everything for me.

rhood

Thanks for comments.

This idea has come from our mortgage advisor!!! So really confused now.

The extra £500, some would be used to overpay the mortgage, up to 10% per year. In current situation all that is tied up with minimum payments etc. No more credit is being added by ourselves, and we are just about positive in the bank balance at the end of the month.

This restructuring will also knock 6 years off the mortgage and at a lower fixed rate than we have already. Thats why we are looking into it.

Very confused now!!!!

DevonGirl

rhood wrote: »

This idea has come from our mortgage advisor!!! So really confused now

Would this happen to be the mortgage advisor who will earn a tidy profit if you do restructure your loan?.... It's not exactly impartial advice is it?

Would it be worth speaking to one of the debt charities about your plans, to see what they suggest?

I agree your situation isn't black and white. There are pros and cons with consolidation but if you follow this site for a while you will see many, many people who have consolidated their debts for an easier monthly payment, only to run up further debts (and I am one of them ). As other posters have said, don't sign those mortgage forms until you've posted an SOA and done the Snowball solution.

Good luck
DG

RAS

I suggest you do a full SOA on here and see what can be done about your debt that way.

Put all your existing unsecured debt inot the snowball on www.whatsthecost.com as suggested above.

Then work out how much that £30K will cost over the period of you mortgage at the current and proposed rates.

Oh and ask why you cannot have the proposed mortgage deal without adding the £30K, thereby massively reducing your monthly mortgage payment and having loads of money to pay off your unsecured debt?