Remortgage

Larrio

I hope I am posting in the right area.
I want to pay off my wifes and my credit cards plus one unsecured loan. The total amount is around £35,000.
Our house is now paid for and worth circa £140,000.
At the current rates we can only just afford to make the minimum payments for the credit cards etc each month. Its going to take forever to clear them so we would like to remortgage to get the £35,000. Our plan is to pay the £35k back over 5 years.
We currently pay £1025 per month to service this debt and hope we may be able reduce this monthly payment by remortgaging.
My salary is £38k and my wife £15k.
One final point is that we do not have a good credit score.
Can anyone offer any advice as to who we should approach or indeed if our plan is flawed.
Larry

dark^knight

Hi,

Sure, the mortgage will be at a lower rate than a loan. However, at least the house is yours and no one can take it away from you.

Have you looked at ways to reduce your monthly outgoings to see if you can service your current loan. If it was me, I would focus on ways to increase my income or reduce my expenses to pay off the loan. You might want to post your SOA on here, so people can advise you.

MFWannabe

As Dark Knight said; post your soa and see where you could make cutbacks first.
Think very very carefully about mortgaging. Your house is paid for and no one can take it off you. If you change your current debts to a mortgage then you are changing it to secured debt and run the risk of losing your house if you can't pay it back

Bored

It's often advised against on this forum to turn unsecured debt into secured debt. I would definitely suggest you post your statement of affairs (SOA) before making any sort of decision - you can calculate it on here (http://www.makesenseofcards.com/soacalc.html) and then select 'copy for MSE' and post it into this thread. It'll give a clear picture of your financial situation.

Larrio

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2700
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 35
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 53
Internet Services....................... 10
Groceries etc. ......................... 300
Clothing................................ 30
Petrol/diesel........................... 50
Road tax................................ 15
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 30
Contents insurance...................... 30
Life assurance ......................... 10
Other insurance......................... 20
Presents (birthday, christmas etc)...... 25
Haircuts................................ 50
Entertainment........................... 50
Holiday................................. 75
Emergency fund.......................... 100
Total monthly expenses.................. 1280

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 141000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard Visa...............0.........260.......0
Barclaycard Mastercar..........0.........220.......0
GM Card........................0.........260.......0
Loan...........................3500......130.......0
Loan...........................6500......300.......0
Total unsecured debts..........10000.....1170......-

Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 1,280
Available for debt repayments........... 1,420
Monthly UNsecured debt repayments....... 1,170
Amount left after debt repayments....... 250
Personal Balance Sheet Summary
Total assets (things you own)........... 141,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -10,000
Net Assets.............................. 131,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

MFWannabe

Larrio wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3 - Who is the 3rd adult? Could they contribute in any way?
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2700
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140 - Is this over 10 or 12 months? See if you can pay over 12 for now while paying debts
Electricity............................. 50 - check comparisons sites to make sure you have the best deal for you
Gas..................................... 50 - check comparisons sites to make sure you have the best deal for you
Oil..................................... 0
Water rates............................. 50 - This seems very high; is it a meter?
Telephone (land line)................... 35 - This is high; see if you can get it for less combining it with satellite tv package
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 53 - Cut to lowest package; but also see notes in telephone and internet
Internet Services....................... 10 - Should be able to cut this by combining telephone and internet with satellite tv package
Groceries etc. ......................... 300 - You could save a bit here; but i don't think this is too bad
Clothing................................ 30
Petrol/diesel........................... 50 - Is this correct for both cars? Could you manage with one car if they don't really get used much
Road tax................................ 15 - Again; is this correct for 2 cars?
Car Insurance........................... 30 - Again; is this correct for 2 cars?
Car maintenance (including MOT)......... 20 - Again; is this correct for 2 cars?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 30 - This is high; you should be able to get buildings and contents combined for this month per month. Check comaparison sites for best deals
Contents insurance...................... 30 - See above
Life assurance ......................... 10
Other insurance......................... 20 - What's this for?
Presents (birthday, christmas etc)...... 25
Haircuts................................ 50 - Really? That seems very high. See if you could go to cheaper salons or have the cheaper stylist at salon
Entertainment........................... 50 - I would suggest keeping this; as you need something
Holiday................................. 75 - Sorry, this needs to stop for now. You can promise yourself a nice holiday once you've cleared your debts
Emergency fund.......................... 100 - Where does this go as you have nothing listed in savings? If you don't know where it gets spent try keeping a spending diary for a month or two to see exactly where every penny is spent
Total monthly expenses.................. 1280

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 141000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard Visa...............0.........260.......0 - You need to enter amount owed and the interest rate
Barclaycard Mastercar..........0.........220.......0 - You need to enter amount owed and the interest rate
GM Card........................0.........260.......0 - You need to enter amount owed and the interest rate
Loan...........................3500......130.......0 - What is the interest rate on the loan and when does the loan end?
Loan...........................6500......300.......0 - What is the interest rate on the loan and when does the loan end?
Total unsecured debts..........10000.....1170......-

Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 1,280
Available for debt repayments........... 1,420
Monthly UNsecured debt repayments....... 1,170
Amount left after debt repayments....... 250 - where does this go? If you don't know then try keeping a spending diary
Personal Balance Sheet Summary
Total assets (things you own)........... 141,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -10,000
Net Assets.............................. 131,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Hi
I've made some comments above where you could make some savings. Please try not to panic too much; i know it seems like a lot of debt but getting rid of your debts is very do-able without the need to re-mortgage.
Stick around on this site and the lovely people here will help you; most have been/ are in your situation

There are some figures missing from your soa though; you need to put the amount owed on each credit card and the interest rates on each card so that we can advise you which one to pay off first. What is your credit rating like? Are you able to get a 0% credit card to transfer some of the high interest card debt to?

Also you say you have 2 cars but the figures in fuel, tax and insurance don't equate to running 2 cars

There are definitely areas you could make good savings to have extra to pay off your debts