Add debt to Mortgage ? Help please

marksewell_2

Hello there, This is my first post so be gentle :-)

Here is my problem.

I currently owe £30k in unsecured debt (Cards,loans,etc)

I am wishing to put this onto our mortgage but here is the problem.

We have only had this mortgage for 5 months (With Abbey)

When we took it the house was valued at £225,000.
We took a mortgage for £202,500.
This is fixed for 5 years at 5.24%.

Now I know that there is not £30k to take out of that sum however
since then our house is now worth in the region of £250,000.
(This was looking at a similar house three doors up).

So really what I want to know is will this be possible ?

I guess they will want to revalue the house?

Any help would be greatfully recieved, I have an appointment with my man at the Abbey next Friday so was just trying to sus out the situation before I get there,


Many many many thanks in advance.
(Sorry for the long post)

Mark

darkcloudi

Over 5 months the price of the house rose by £25k, are there many differences between your house and the house three doors up?

I can't see Abbey having problems providing that you can afford the repayments and the house has the suggested value so they will look at your current circumstances. A family friend I know was trying to do the same thing and was trying to get £20k but was declined and was only able to manage to get extra 10k this was also with Abbey. So they may be a possibility they may not offer you the full 30k.

In regards to the credit cards have you tried to transfer the cards to a 0% deal?

AndrewSmith

The other problem to consider is that Abbey's standard criteria for debt consolidation is to only lend up to 85% of the value of the property.

This means that even with the increased value of your property to £250,000 they would still only be able to go to a maximum loan for consolidation purposes of £212,000.

You may want to look at, as excellently suggested above, switching the debts to 0% cards in the meantime or, as a last resort, look at a second charge or secured loan.

Only look at converting short term debt into secured lending as a last resort and only if you are really struggling to make the payments monthly.

Although the reduced monthly payments may seem like a short term saving it will cost you far more in the long run to repay the debt.

Andy

marksewell_2

Thanks for the replys people.

Mmmmmm that 85% thing could be a real problem.

I have moved my biggest C.Card onto 0% but it doesnt make too much difference to my monthly outgoings..........

I guess I will have to see what they can offer on Friday.

Thanks for your help
Mark.

Raggie

is it ever a good idea to take unsecurred debt.. and link it to your main asset your home?

If you can not currently re-pay the unseccurred monies you wil still have some where to live.

As Andrew says it has to be a the very last resort.

I am sure there is more about this on this site.. try the Debt Free Board.