Sorry - Another Mortgage Question With Debt

trebor07

Hi, hopefully someone can help with some advice.

We are currently 34k in debt which is unsecured, a combination of loan and cards. Our mortgage is at the moment interest only and are desperate to get on to repayment.
Our mortgage is £175k with the property value £240k (going on prices similar sold for).

We earn £50k between us (husband and wife).

My main question is would we be best trying to add the debt to a new mortgage, would we even be accepted by a lender with so much debt?

Our credit ratings are good. With Experian 986 and Equifax 527.

Thanks.

Thrugelmir

Your credit ratings are meaningless. Mortgage lenders will appraise you themselves based on a variety of factors which will examine your credit usage over the past 72 months.

Firstly I always suggest getting over the the Debt Free Wannabe board. Lots of support and advice on there from people that have had their light bulb moment. See what difference you can make yourselves to your budget to tackle the issue. Rather than expect an easy way out from a mortgage lender.

Annisele

Why are you desperate to get on to repayment?

Depending on the interest rates of your various debts, you might be much better off staying on interest only for now and using the extra money towards your highest-interest debt.

trebor07

Annisele wrote: »

Why are you desperate to get on to repayment?

Depending on the interest rates of your various debts, you might be much better off staying on interest only for now and using the extra money towards your highest-interest debt.

Hi, because we're not getting an younger, we're both getting on for mid 40's.

Annisele

I second the recommendation to go over to the Debt Free Wannabee forum.

You don't say what the interest rates are on your various debts, but if your aim is to pay them off before you retire it's possible that switching to repayment would be a bad idea. You might be better off putting all your spare cash towards the highest interest debt, and sticking with minimum repayments/interest only on all the rest of them.

You could play around with a snowball calculator to see what difference it makes if you pay the highest interest stuff first.