Using equity to consolidate

ferry

Unfortunetly I can see no other way to avoid a DMP than to consolidate our debts to our mortgage.
Dont get me wrong and we are aware of the potential pitfalls of doing this We'd rather not but there is no way we can cut back enough to see our way through to clearing it with and still keep a roof over our heads.
Based on the fact that we have a 116k outstanding balance mortgage with the recent valuation of 252K we think its wise while we are still both young and healthy enough to catch up.Just feel as if we need a fresh start.
The CC's were cut up this morning after all the transferring around to keep one with a small limit on for emergencies.

The plan will be to roll all into one -potentally with a new lender if necessary - and overpay slightly with some of the £400 monthly 'saving' we will have to reduce the term best we can..

All this assuming that a lender will accept our situation of course!

Any advice before we approach a broker?

Thanks as usual
F x

GMS

How much do you need to borrow? Which lender are you with now and what rate?

Have you been keeping up all payments?

Thrugelmir

Have you considered selling up. Releasing the equity to clear the debt.

Debt consolidation doesn't solve the fundamental issues of the problem.

_Andy_

What advice are you after? You seem to have made up your mind about it

ValHaller

ferry wrote: »

Any advice before we approach a broker?

Yes, go to the DebtFree Wannabe forum and ask there. You will be roundly told not to consolidate but to pay down your debt in situ. Some will tell you that 'consolidation' was the worst financial decision they ever made. Despite being cheaper on paper.

ferry

GMS wrote: »

How much do you need to borrow? Which lender are you with now and what rate?

Have you been keeping up all payments?

Around 15k,currently with Natwest on a repayment rate of 2.45%,all payments up to date.
which I know will be hard to beat and in my haste I've just realised the non-negotiable early redemption penalty....

ferry

Thrugelmir wrote: »

Have you considered selling up. Releasing the equity to clear the debt.

Debt consolidation doesn't solve the fundamental issues of the problem.

Dont think selling up and renting will solve it to be honest as rental payments will be higher than my mortgage payments?
Only time will tell if the fundamental issues have been addressed-we'd like to think we have learned our lesson and now have to face up to the paying it back part - in one form or another.

GMS

ferry wrote: »

Around 15k,currently with Natwest on a repayment rate of 2.45%,all payments up to date.
which I know will be hard to beat and in my haste I've just realised the non-negotiable early redemption penalty....

Then you should consider a second charge loan. This is a secured loan which runs along with the current mortgage, placed behind it in terms of recovery should either loan default.

This would allow you to protect your current low rate and not have to pay any redemption fees. Usually only 1 months interest to come out of it so when mortgage expires you could look at consolidating the lot.

Alternatively see if your current lender would do a further advance.

Broker may well be of help to you.

ferry

GMS wrote: »

Then you should consider a second charge loan. This is a secured loan which runs along with the current mortgage, placed behind it in terms of recovery should either loan default.

This would allow you to protect your current low rate and not have to pay any redemption fees. Usually only 1 months interest to come out of it so when mortgage expires you could look at consolidating the lot.

Alternatively see if your current lender would do a further advance.

Broker may well be of help to you.

Excellent advice-thank you

Thrugelmir

ferry wrote: »

Dont think selling up and renting will solve it to be honest as rental payments will be higher than my mortgage payments?
Only time will tell if the fundamental issues have been addressed-we'd like to think we have learned our lesson and now have to face up to the paying it back part - in one form or another.

What's the extent of your debt problem?

ferry

Thrugelmir wrote: »

What's the extent of your debt problem?

15k all on cc's but being honest(not that it matters) we spent heavily in our earlier years to bring our home up to standard through most of this and now the interest has kicked in.

Only plus if any in all this is that our home has(luckily) now increased in value by more than the 15k we invested in it so if we ever did need to sell...