Hoping to release equity!

HopefullyDebtFreeBy2014

Hi

I'm new here so please bare with me if I'm posting in the wrong place... Me and my husband are hoping to borrow more money on our Halifax mortgage to pay off existing debts, we have cards all over I have viewed our credit report and both state "very poor" and my husband defaulted on one account a couple of years ago. We currently owe £55000 on £160000 house so we have loads of equity available and have never miss one single payment on our mortgage however, we have struggled with juggling cards and payments for a few years now resulting in 17 missed payments in total. It's really getting us down!!
So after thinking things over this would totally makes sense as all our debt would be in one place, our mortgage we could get rid of cards and live a lot happier and be better off a month.
Does anyone know what the chances of Halifax agreeing to this are taking into account our current situation?

Thanks

kingstreet

I suspect they will have an issue, if your credit is as bad as you say.

You don't say how much you need to borrow, but a further advance for debt consolidation with a poor payment record is going to make life difficult, even with that amount of equity.

HopefullyDebtFreeBy2014

Thanks for posting Kingstreet

It's 25k
We have passed the initial checks (what ever that means) and awaiting a call back.
Do you know if it would help if we had a guarantor?

What I don't want is another search damaging credit file further, what if we were to continue improving things over next few months? Do you think the default would be an issue?

Thanks

kingstreet

You can't have a guarantor for a further advance.

That would only work if you were remortgaging and a guarantor is useful only in obtaining a higher mortgage than your income suggests, not to make you mortgageworthy when you have a lousy credit history.

If you've already applied to Halifax, you might as well see what happens. It would have helped if you'd mentioned that at the outset, as the tone of the OP suggests you are considering it, not that you've done it.

Only time will tell if you are successful. Update the thread as and when...

HopefullyDebtFreeBy2014

Sorry like I said I'm new here so don't really know what I'm doing... I am wanting to find out whether it's advised to still go ahead or pull out to prevent further damage?
We just need Halifax to see that we will be financially better of with the debt consolidated into our mortgage

kingstreet

If you've already been credit scored, you have nothing to lose by continuing.

Making sure you get in as much detail as you can in your posts ensures you get the most accurate response and the most relevant help in/for your circumstances.

HopefullyDebtFreeBy2014

So does initial checks mean they have checked credit file?

Ok thank you

kingstreet

I would assume so.

Further advances are handled differently to new business, so I don't know the ins and outs.

There are one or two ex-Halifax bods who post on here and you may get a more informed opinion from them.

HopefullyDebtFreeBy2014

Ok thanks for your help & advice

magpiecottage

You are not going to be debt free by 2014. You will simply have a home that is at greater risk in 2014 than it was in 2013.

The harsh reality is that the only ways to get debt free are to pay the debt off or go bankrupt.

fatbelly

I'm afraid Magpie is correct - what you are proposing doing is moving your debt to a more dangerous place.

If you default on a non-priority debt what happens in the vast majority of cases is merely an avalanche of angry letters and a mark on your credit file. You have already been through this in the past so you have personal experience of this.

If you default on a mortgage or secured loan the lender has the right to request possession of their (your) property. The courts can only offer limited protection as this is a contractual right.

In increasing your monthly instalment on the mortgage you would be increasing that risk.

Also, should you require state help through 'support for mortgage interest' in the event of losing income through loss of job or illness, the element that you borrowed for debt consolidation will not count.

You need to approach one of the free debt charities (Payplan and Stepchange are the most appropriate) in Martin's list to run you through the options. You can ask them what they think of the consolidation route.

http://www.moneysavingexpert.com/loans/debt-help-plan#help