hELP!

losttheplott

Any advice would be appreciated. I really dont know what to do....
I have approximately £24,000 unsecured debt on loans and interest free credit cards. Stepchange have offered to put me on a debt management plan. I have a mortgage which is outstanding £82,000. Alongside this I have a secured loan of £25000. The flat is now worth approx £200,000. Is remortgaging the best option? I seem to feel that lenders are not remortgaging anymore for debt consolidation. All I know is I cannot go on living like this, managing 7 different creditors and being able only to make minimum payments. Please any advice as to the right thing to do would be greatly appreciated.

Thank you

grumbler

There is no a simple answer to this question.
See MSE article Debt Problems. It has a small section on remortgaging with a link to Remortgage Guide

yasmup

losttheplott wrote: »

Any advice would be appreciated. I really dont know what to do....
I have approximately £24,000 unsecured debt on loans and interest free credit cards. Stepchange have offered to put me on a debt management plan. I have a mortgage which is outstanding £82,000. Alongside this I have a secured loan of £25000. The flat is now worth approx £200,000. Is remortgaging the best option? I seem to feel that lenders are not remortgaging anymore for debt consolidation. All I know is I cannot go on living like this, managing 7 different creditors and being able only to make minimum payments. Please any advice as to the right thing to do would be greatly appreciated.

Thank you

I'd stick with what stepchange have advised you.

If you feel you have lost all confidence with stepchange, there are other organisations that can help for free.
e.g. the CAB or National Debt Helpline.

dancingfairy

I'm not sure why you feel remortgaging would be a good idea?
1) you may have done this before with the secured loan and it doesn't seem to have helped?
2) can you afford increased mortgage payments? What would happen if you lost your job or were unable to pay the higher mortgage? At least if you default on unsecured debts you aren't generally going to loose the house.
3) you say yourself you don't think you would be able to remortgage anyway.

I'm just wondering why you don't want to go with what Stepchange are saying? Is there anything particular you are worried about?
df

losttheplott

The reason I am unsure about going with stepchange is that I do not want to spend the rest of my working life making the reduced payments to the creditors. Also the DMP will haunt me forever and will always effect my credit rating. Remortgaging would cover the debt (incidentally brought about by having cancer/ chemo and being unable to work), the original secured loan was to pay back my parents for lending me the deposit and legal fees. I did not run up this debt by shopping willy nilly in Harvey nicholls LOL
So a remortgage seems to be the best option as it could release some equity to cover the debt and since my flat is in zone 1 London it will take only 2 years to recover that equity spent. A remortgage will also not damage my credit rating.... am I going mad?

john1002

Your rationale seems fine but of course this all depends on securing the remortgage and there you may find the problem, have you asked your current provider the chance of securing a deal? If not may be worth a call or if that fails ask a independant broker. If it all goes through look at your credit cards pick the best one, benefits low apr and cut all the others up and close them, you may find this is a requirement of remortgage deal.

If remortgage fails then you may need to follow step change route as you have said you can't go on and it would only take a blip to send you over.

Good luck

John

lisyloo

Sorry to hear about your illness but don't worry about people judging you.
Your logic sounds very sensible to me.
Talk to your lender and my advice would be to be honest about how you got into the situation and how you plan to get out of it.
I think being honest would work in your favour and I don't mean sympathy, I mean the fact that you are where you are through circumstances and you are dealing with it.

You should also consider events like sickness, redundancy and also the housing market may correct although you do have a fair amount of equity.

If you lender won't help try a mortgage broker (I'd menion London and country - no connection but I don't believe they charge up front fees).

Good luck.

pvt

losttheplott,

You haven't indicated your income, nor how secure it is?

Due to recent changes, mortgage lenders now have to be far more thorough in evaluating your ability to afford the mortgage repayments. Your CRA records probably show you're struggling with all the debt you have, so it is likely to be very difficult for you to get a larger mortgage.

As others have advised, you may be better sticking with Stepchange.

CLAPTON

losttheplott wrote: »

The reason I am unsure about going with stepchange is that I do not want to spend the rest of my working life making the reduced payments to the creditors. Also the DMP will haunt me forever and will always effect my credit rating. Remortgaging would cover the debt (incidentally brought about by having cancer/ chemo and being unable to work), the original secured loan was to pay back my parents for lending me the deposit and legal fees. I did not run up this debt by shopping willy nilly in Harvey nicholls LOL
So a remortgage seems to be the best option as it could release some equity to cover the debt and since my flat is in zone 1 London it will take only 2 years to recover that equity spent. A remortgage will also not damage my credit rating.... am I going mad?

what's your income?

how does 'recovering ' the equity in 2 years help you make the repayments?
even (or maybe especially) London prices aren't guaranteed to rise

lisyloo

how does 'recovering ' the equity in 2 years

We have a general election in the spring and it's likely that interest rates will start to rise.
No-one knows what's going to happen but I don't believe the rises we've seen in London are sustainable.

and also as clapton says a higher "paper" value of your home doesn't really help you, unless of course you are going to sell.