Debt consolidation into mortgage

FakeIrish

Hi folks

I know this has been covered all over the site and I'm aware of the basic principles concerning consolidating debts into mortgages.

However, we currently live in a flat and we are so desperate to move into a house for various reasons. I know that we can afford to consolidate and am aware that if we go ahead with this option, it's probably best to do overpayments every month to the tune of the original loan repayments. For instance, if I'm currently paying £400 per month for the next 3 years - will need to do this on top of the mortgage.

The only reason we are thinking of doing this, is so that all the debts are easily managed and I'm only paying one creditor. I know the danger is that I don't "learn" and could end up in debts elsewhere.

But if I'm careful - could this be a viable solution? We are already talking of aiming for a smaller house with a smaller mortgage to allow for a possible consolidation. And then in a few years when we have cleared some equity, upgrade to a bigger house.

Grateful for any expert advice!

Thanks.

Mr_helpful

Ther is not much wrong with consolidating debt as long as you know what you are doingIf its the difference between living and going under even better. You know the state of your finances so I should do it if you want to

FakeIrish

Thanks. We will speak to our adviser when the time is right but just wanted to know if the idea is good in principle. I do realise it depends on individual circumstances.

Am trying to persuade the wife of the benefits of this but also portraying the potential negatives too.

DawnW

Check out the debt free board before you decide to do this - it has backfired bigtime on people whose circumstances have changed, as well as those who have just carried on spending. How would it be if you got ill, had an accident and could not work, lost your job, partner got pregnant, whatever. Remember you are making unsecured debt into secured debt which could under some circumstances put your home at risk. Do think very carefully about this, and bear in mind you can simply set up direct debits to pay your credit cards etc month by month, to make it easy to deal with. Good luck with whatever you decide to do - but remember, consolidating does not clear your debts, merely shifts them to a place that can become riskier under some circumstances. Mortgages/second mortgages/secured loans are still debts.

JoeK_3

SVM wrote: »

Hi folks

I know this has been covered all over the site and I'm aware of the basic principles concerning consolidating debts into mortgages.

However, we currently live in a flat and we are so desperate to move into a house for various reasons. I know that we can afford to consolidate and am aware that if we go ahead with this option, it's probably best to do overpayments every month to the tune of the original loan repayments. For instance, if I'm currently paying £400 per month for the next 3 years - will need to do this on top of the mortgage.

The only reason we are thinking of doing this, is so that all the debts are easily managed and I'm only paying one creditor. I know the danger is that I don't "learn" and could end up in debts elsewhere.

But if I'm careful - could this be a viable solution? We are already talking of aiming for a smaller house with a smaller mortgage to allow for a possible consolidation. And then in a few years when we have cleared some equity, upgrade to a bigger house.

Grateful for any expert advice!

Thanks.

Debt consolidation means putting all your debts on to one interest rate and not putting it into the mortgage.

You can have a mortgage at say 5% interest rate with a term of 20 years and with the same lender have a loan at 5% with a term of 5 years. Unfortunately not many mortgage advisers are aware of the lenders that will allow this.

Hope this helps your wife.

JoeK