Extending my mortgage for debt consolidation?

Sarah601

Morning all, wonder if anyone can give any advice.

The situation is thatI have around £10k of credit card/store card debt which is becoming hard to pay off each month. Although not ideal, I want to extend my mortgage by £10k to pay it off. I have around £60k of equity in my property. However, I am wary of telling my mortgage company, Santander, that it is, effectively, for debt consolidation as I know of a few people that have been refused recently for similar requests.. If I said it was for home improvements am I more likely to be accepted? Im assuming the words debt consolitation rings alarm bells with mortgage companies?

Does anyone know what type of questions Santander normally ask when you are requesting an extension of your mortgage? Do you think they will actually ask/check my credit card payments each month?

Would be grateful for any advise you can give x

somethingcorporate

What is your current loan to value? Do you have an overpayment facility that you can withdraw from? At Nationwide you can withdraw what you have overpaid with no questions asked.

Lying on the application form sounds like fraud to me. Does that sound like a sensible plan to you?

_Andy_

Sarah601 wrote: »

Morning all, wonder if anyone can give any advice.

The situation is thatI have around £10k of credit card/store card debt which is becoming hard to pay off each month. Although not ideal, I want to extend my mortgage by £10k to pay it off. I have around £60k of equity in my property. However, I am wary of telling my mortgage company, Santander, that it is, effectively, for debt consolidation as I know of a few people that have been refused recently for similar requests.. If I said it was for home improvements am I more likely to be accepted? Im assuming the words debt consolitation rings alarm bells with mortgage companies?

Does anyone know what type of questions Santander normally ask when you are requesting an extension of your mortgage? Do you think they will actually ask/check my credit card payments each month?

Would be grateful for any advise you can give x

Lying to them = fraud therefore a bad idea. Just tell the truth
And yes they will carry out a credit check

[Deleted User]

Alternatively, ask for £15k. £10k for the mythical home improvements, and then £5k for a solicitor to try to keep you out of jail.

dealer_wins

Good idea in principle, but literally 99% of people who do this find that in a few years those credit cards and loans will be back up to £10000 again.

I would say live very frugally for however long it takes to pay of the cards and build up an emergency fund.

Sarah601

Many thanks for all your responses.

I honestly didn't realise being 'economical' with the reasons you want to extend your mortgage would be that big a deal. You are only asking to borrow your own money effectively. However, you've all scared me now so think I will be honest and tell them what its for. Our mortgage is £100k and the house is valued at £165k. Mind you, with the really tight lending criteria these days, Im not expecting a yes from them.

We do live quite frugally already and don't have a flashy lifestyle, but looking at the high interest rates of store cards (some 29.9%) and comparing it with the low interest rates of mortgages - its a no brainer really. Our idea was to get rid of my store cards and with the amount we save make overpayments on the mortgage to clear it quicker.

Really appreciate the advice. Thanks guys x

barbarawright

First search the boards for consolidation loans and see how many people you can find who say it worked first time for them. Then go over to the Debt Free Wannabee board and post and SOA (they'll explain over there)

arbroath_lass

Sarah601 wrote: »

We do live quite frugally already and don't have a flashy lifestyle, but looking at the high interest rates of store cards (some 29.9%) and comparing it with the low interest rates of mortgages - its a no brainer really. Our idea was to get rid of my store cards and with the amount we save make overpayments on the mortgage to clear it quicker.

Really appreciate the advice. Thanks guys x

Please don't think I'm being mean. The problem is that whilst you think you have lived frugally you've actually spent £10,000 more than you've earned.(obviously ignoring interest!)

If you have spare cash each month pay off the the cards.

Look at snowballing (paying the minimum to all cards except the one with the highest apr) to see how quickly you can reduce your debts and how much an extra £1 here and there can help. The debt free board really is helpful. Take a look over there and at the advice given to some recent posters even if you don't want to post yourself.

Lots of luck.

abelthomas

[FONT=&quot]Lying to them might put you in further trouble and you run the risk of criminal prosecution. If they run a credit check, you will be nailed again. I suggest you keep out £5k from the balance amount and consult a solicitor and ask him the way ahead.
[/FONT]

dshart

You need to take a hard look at how you built up the £10k debt on the store/credit cards whilst on your current mortgage arrangement, because if you transfer that debt to your mortgage your mortgage payments will increase and you may start all over building debt on your credit cards again.

If you are sure that you have sorted your finances so that you will not be building up further debt then getting outstanding debt onto the lowest interest rate possible is best assuming that your mortgage lender will take it on.

But I would not lie on your application, remember that when they do a credit check the debt will show up and may affect their decision.

Ames

Can't keep up repayments on credit cards = CCJ.
Can't keep up repayments on extended mortgage = lose your home.

Please have a read on the Debt Free Wannabe board before doing something so drastic.