Using Mortage to pay off debts

StanVanDamn · 25 November 2011 at 9:12PM

I currently have 12000 worth of debts on two credit cards and a loan
And if I'm honest, for the first time I'm starting to struggle paying all my outgoings.

I am looking for the best way to get all the debt into one easy payment.

I own a house worth 80000 and the Mortage on it is 54000. Do you think it is possible to remortgage for 66000 and use 12000 to pay off my debts. Or will the Mortage company not allow me to do this?

Thanks for any advice on the matter x

katsu · 25 November 2011 at 9:33PM

Stan,

Honestly that depends on your income and outgoings.

However, we rarely advise consolidating debt. You are securing the debt on your home, which is risky as if you can't pay the mortgage you can lose your house. Also, most people who consolidate find they soon end up in more debt.

Best advice is to work out how to reduce your spending to bring your income and expenditure into alignment - post an SOA (see the "sticky" threads for a link to one on makesenseofcards - basically a list of income and all outgoings) and we can offer advice on how to reduce your outgoings.

I'd get a handle on income and outgoings first.

Good luck and well done for taking steps to sort it out.

[Deleted User] · 25 November 2011 at 10:58PM

StanVanDamn wrote: »

I currently have 12000 worth of debts on two credit cards and a loan
And if I'm honest, for the first time I'm starting to struggle paying all my outgoings.

I am looking for the best way to get all the debt into one easy payment.

I own a house worth 80000 and the Mortage on it is 54000. Do you think it is possible to remortgage for 66000 and use 12000 to pay off my debts. Or will the Mortage company not allow me to do this?

Thanks for any advice on the matter x

you LTV is already 80% i.e 54k is 80% of 80k
most lenders atm see this as a maximum,and if you could find a lender to increase this the fees will be high anything from £2000 plus

dark^knight · 25 November 2011 at 11:26PM

Agree with above. Look for ways to reduce to increase your income or reduce your outgoings, so that you can pay more towards your debts. Leave the mortgage well alone...imho.