Re-Mortgage on DMP

Back_on_budget

Hi, Does anyone have any advice on remortgaging when on a DMP?

We currently have a tracker with C&G on a great rate due (1.69%) to the last remortgage just before rates started to plumet. Unfortunatly, our great rate comes to an end in October, and will get put on the standard variable rate.

We are however struggling with unsecured debts, and entered into a DMP last August, and will struggle to pay the increased cost of the mortgage.

I am therefore thinking about trying to get an interest only mortgage for a few years, until we clear our other debts and can afford to start making capitial repayments again.

Can anyone advise on the best course of action, or if we are going to be better off reducing our DMP Payment to stay with our current mortgage?

Thanks...

Thrugelmir

Being in a DMP restricts you products available from your current lender. Have you checked if any offer a cheaper rate?

Do you have equity in your property?

Back_on_budget

Property Value is approx £230k

Current mortgage at £165k, plus additional 2nd mortgage at approx £22k.

Have only just started to think about it. The rate doesn't end until October, but want to be ahead of the game when it happens

Assuming base rates don't increase, the mortgages will be at £162k and £19k by October.

If possible, I'd rather keep on a repayment mortgage, but don't know if it's going to be possible.

Thrugelmir

Have you considered selling the property and renting? Will enable you to clear your debts and get back onto your feet far quicker. There's an inherent danger that at some point in the future things could get worse.

_Andy_

Interest only mortgage with no repayment vehicle - almost certainly going to be declined.

kingstreet

You aren't going to get a remortgage anywhere close to 1.69%, so the rate is going up whatever you do.

What's the follow-on rate? Do you revert to 2.5%?

Back_on_budget

I think we will go back to 2.5%. Will dig out the paperwork and check.

Have thought about selling up, but we would rather get our debts clear on the DMP, and still have a house with equity at the end of it.

The second mortgage will be finished in 4 years, so can the use that money to clear our other debts in 1 year.

I guess for now, best option may be to stick the the standard variable mortgage and hope the rate doesn't go through the roof in the near future.

Dave_Ham

Spot on...

You will not get close to the 2.5%