consolidation

fd1972uk

Yep, have to say an advisor will no doubt be looking after themselves first and foremost at a cost to you.

We've aleady went down the re-mortgage route on 2 or 3 occassions, but no more. You then re-plan your spending and thinking the credit is away, you then start to use the cards and stuff again which come back to haunt you.


FD

CH27

Hi
If you post your SOA people will happily advise you.

Remember your mortgage advisor is not impartial. He will get commision or bonus.

Little_Miss_Uni-Debt

Nooo Don't do it rhood! Step away from the consolidation!

I think it would be an eye opening example to all if you were to post up the figures of keeping cards vs consolidation.

Get that mortgage advisor to draw up figures - total amount repayable currently on your mortgage and years to go and total amount repayable including the £30k.

I think if you work with concrete figures it will be quite clear to see just how many thousands and thousands you will be saving by not consolidating.

When you work out the difference between your current mortgage & the proposed new mortgage, let us know. I'm pretty sure you'll be able to clear the cards for the same amount per month, with less than half of the interest added compared to consolidation. If not, i'll eat my MSE hat!


Just as a side note, what % rate would the new mortgage be at and what are the % rates on your cards? This is what matters most!

blisteringblue

fd1972uk wrote: »

Yep, have to say an advisor will no doubt be looking after themselves first and foremost at a cost to you.

We've aleady went down the re-mortgage route on 2 or 3 occassions, but no more. You then re-plan your spending and thinking the credit is away, you then start to use the cards and stuff again which come back to haunt you.


FD

Likewise, been there and done that. Added 40k to the flexible mortgage and still ended up with big card debts. All still manageable but the 0%s have run out as finally maxed.

Thought about using more equity like you but again enough is enough, I want to pay the cards off and start to clear the extra 40k I put on the mortgage.

Key is your budget though, you need to control it to the penny and throw anything left at your overpayments on the snowball. But you need to get the overspending under control or there is no point.

I also use the http://www.whatsthecost.com/snowball.aspx website to manage mine and it's so addictive seeing the months come off till you will have cleared the debt. I've even got the wife onboard and sticking to the budget :rotfl:

Just try your figures before thinking about consolidation

Firewalker

No place for confusion - just don't do it! as others have said t,he mortgage advisor is only human, he has family and mortgage as well, and he gets commission.

And as I said before - you should aim to get out of debt rather than restructuring it. Time to change you life, may be?

FW

Eonel

While the OP needs to be very wary of the risks of consolidation, I can't help but think there is another angle to look at this situation from.

OP states The 30k was borrowed to renovate the property. Over the longer term this investment may well have added 30k to the value of the property. Consider the value of a renovated property vs unrenovated.

If the 30k was truly invested in the property, it would be valid to consider it as part of the original mortgage and pay it off over the life of the mortgage ie consolidate the loan with the mortgage.

It would reduce the value of your equity in the house and in the long term increase the interest paid, but could also be considered a truer way to think of the debt.

dancingfairy

hmm - it's a pretty difficult decision. IF the debt was run up purely to pay for the rennovation and there is very, very little chance of you ever running up debt again then it may be worth putting it in with the mortgage. Work out exactly how much it would cost though so you know what you are getting into.
The main problem I see is if you did get in to trouble with a smaller mortgage you could pay that and pay token payments to the unsecured debt but if you added it all into the mortgage and struggled then it could put real strain on things and makes it more likely you would loose your house.
When doing your calculations remember that interst rates will go up and some point - it's just a case of when and how much so factor this into your plans.
Everything being equal and assuming that you really do have a handle on your finances I personally would:
a) get the conoslidation loan but use the money that is 'freed up' to start overpaying the mortgage. or
b) remortgage with the current mortgage and again use 'spare money' to overpay the unsecured debt.
Best of Luck
df

rhood

Evening

Thanks so much for all your replies, it makes making a decision much easier when you have more opinions!!!

As previous post suggested the debt is rennovations only, and they are all done!! (unless missus thinks otherwise! lol) Thats why we thought about the mortgage option. Also the new mortgage would be less in term (6years than one currently. At 7.09% fixed as opposed to 4.19% for 2 years in the new plan.)

Vast majority of spare income would go into overpayements (10% of total allowed per year)

The negativity towards consolidation has made me vary wary indeed. If not then the loan for 15K would be 7 years. Then CC would be minimum payments only, so £60 paid covers about £45 interest. Thats the reason we have thought of this..... 0% options are minimal now. Fairly disciplined financially because we knew we have equity in house but had to gut it from top to bottom. Other 15K was from Univeristy between us.

rhood

Think i will bite the bullet till my fixed ends in 2014.

Too many penalties which barely outwieghs the restructure

Thanks for all your help.