debt and whether to go interest only for a little while

raq

hi all,

Hope somebody can help us with the following.

We got £14,000.00 worth of credit card debt mostly at 29.% . we are paying the monthly installments everymonth but finding now we are against a huge brick wall and seems to take 10 years to pay back.

Okay, We have 19 year left on our repayment mortgage with £125,000 equity in and was thinking of going over to 3 years interest only to clear the above debt. ( That is if our mortgage company will allow ).

Do you think this is a good idea or not??
Thanks guys

x

BevieB

We are with the Nationwide and when we requested to do this they refused and suggested a DMP.

jellybean39

We asked santander to do this and they wouldnt unless they put in a new application which meant 8k penalty as we wer tied in. Also they wouldnt then give us the same amount or more as our income had slightly dropped.
Other way would be the hardship route but his again would cost us as a new application and 8k penalty and then be put on our credit file and then anyone we owed money to could then see and ask for debts to br reapid in full. As houses prices had dropped it wouldnt have been viable so we didnt do it. We are now produly dealing with debts perhaps do a soa and asnowball and see if there is any other way. Banks arent helpful at the moment, and we had over 100k in equity. Dont know if this would have happened but santander said it would but not sure if they were telling the truth. Tbh dont think bloke could be bothered to do application.

CH27

Post up your SOA & people will be able to see if there are any other ptions available to you.

raq

CH27 wrote: »

Post up your SOA & people will be able to see if there are any other ptions available to you.

thanks for the replies guys. We thought as much with the mortgage company not excepting. haven't even rang them yet but something telling me it will be a no.

My husband is also self employed. Got 4 years books although the last year has been very dire.

Hubby did mention we could just chuck as much as we could towards the debt over the next year.

Will keep you posted.
x

jellybean39

We both self employed as well and the same problem this year had a dire year!!! If you can pay off without defaulting and start chucking waht you can at it it will improve. look at what i have achieved in a small time by just getting advice from people on here. Can you find away to make any extra pennies they all help ebay and carboots good place to start.
Hoepfully the economy will start to change soon. Cut the cards up keep one fore dire emergencies and start paying off what you can it will all help.
Have a look at www.whatsthecost.com has helped me loads. Bit addicted to it now to be honest i go and look at it everyday even though it dosent change!!!!!

raq

jellybean39 wrote: »

We both self employed as well and the same problem this year had a dire year!!! If you can pay off without defaulting and start chucking waht you can at it it will improve. look at what i have achieved in a small time by just getting advice from people on here. Can you find away to make any extra pennies they all help ebay and carboots good place to start.
Hoepfully the economy will start to change soon. Cut the cards up keep one fore dire emergencies and start paying off what you can it will all help.
Have a look at www.whatsthecost.com has helped me loads. Bit addicted to it now to be honest i go and look at it everyday even though it dosent change!!!!!

oh thankyou so much.

I rang mortgage company yesterday who surprisingly was really helpful. Basically I can switch over and the only fee is the admin fee of £55.00. Gonna wait for the paperwork at the end of the week and then go from there. Really shocked it was a yes.

Gonna do 2 years and the additional money we can chuck against the debt plus any additional monies that just might come our way. I am pleased we can do it this way as we didn't want to borrow more to clear the credit cards. I actioned ebay in the middle of august and made £170. that was with the postage costs out aswell, so pretty chuffed as my dd was due high school and required new uniform. Such a weight I can tell you.

raq

raq wrote: »

oh thankyou so much.

I rang mortgage company yesterday who surprisingly was really helpful. Basically I can switch over and the only fee is the admin fee of £55.00. Gonna wait for the paperwork at the end of the week and then go from there. Really shocked it was a yes.

Gonna do 2 years and the additional money we can chuck against the debt plus any additional monies that just might come our way. I am pleased we can do it this way as we didn't want to borrow more to clear the credit cards. I actioned ebay in the middle of august and made £170. that was with the postage costs out aswell, so pretty chuffed as my dd was due high school and required new uniform. Such a weight I can tell you.

just an update.

Had the interest only quote today from our mortgage lender. Signing and sending out in the post today. We are aware the figure will still sit the same in 2 years time, but, yes a BUT. I rang them as something was niggling away at me.

Basically they said when I convert back over to repayment they will send out an expenditure listing and for us to complete for our mortgage lender then can see if we can afford to change back. No problems with this and they did say there are no extra hidden charges but what am worried about what if they don,t change back.. What then.... I would have to go down the road of searching mortgage lenders...

Is this really worth it in the long run...

qpop

Your mortgage debt is the most important to keep servicing. I worked for HSBC, in the mortgage underwriting department until earlier this year and we downright refused to change to Interest Only based on wanting to pay credit card debts off. Martin has written a couple of articles about it on the main website (well worth a look).

Short-term debt paid off quickly by cutting down on needless expenses is much more sensible than postponing the biggest debt you'll likely ever have.

raq

qpop wrote: »

Your mortgage debt is the most important to keep servicing. I worked for HSBC, in the mortgage underwriting department until earlier this year and we downright refused to change to Interest Only based on wanting to pay credit card debts off. Martin has written a couple of articles about it on the main website (well worth a look).

Short-term debt paid off quickly by cutting down on needless expenses is much more sensible than postponing the biggest debt you'll likely ever have.

thankyou so much, i will have a butchers on that forum.

Also since Monday Halifax rang me ( our bank ) and mentioned about mortgages and said about the situation we are in at the moment. Gonna pop in there next week and see what these guys have to say.