New mortgage or remortgage

dwill1503

We own a house with a value of £180k but our mortgage is only £97k so our ltv has reduced from 88% to 53% in 8 years. We do however have £15k debt and some negative impact on our credit files. We are keen to get rid of this debt and start again. We don't currently live in the house as we rent it (we have consent from NW) so are wondering what our best options are...
1) sell house, pay debt and sit on money for a few years
2) remortage (doesnt appear to be an option on their website but "borrow more" is with NationWide - but would we end up paying more a month? We currently pay £480pm
3) sell house and buy another elsewhere for £100k and continue to rent it (so we at least keep our hands on a mortgage) and clear debt and add to savings with other £60k
4)any other advice?

Foxy-Stoat_3

dwill1503 wrote: »

1) sell house, pay debt and sit on money for a few years - You will save money on the interest you are paying on the £15,000 but in a few years your money in the savings account might not grow the same as the property market, so bear this in mind if you go down this route.
2) remortage (doesnt appear to be an option on their website but "borrow more" is with NationWide - but would we end up paying more a month? We currently pay £480pm - Turning unsecured debt into secured debt is not usually the best way to clear, but you will end up paying more in interest in the mortgage over the longer period than you would in the loan(s) and you will have the added risk of running up another load of unsecured debt, assuming your lender will allow you to borrow this amount. Have you actually spoken to NW?
3) sell house and buy another elsewhere for £100k and continue to rent it (so we at least keep our hands on a mortgage) and clear debt and add to savings with other £60k - It will cost you around £5,000 to sell your current house and buy another one, plus you have to find new tenants and possibly carry out works to the new place, assuming you have a residental mortgage already and you can secure a BTL mortgage as you will unlikely be able to take out a new residential mortgage then apply for consent to let straight away
4)any other advice? - Whats wrong with doing nothing apart from paying down your current debt?

Hope that helps....I hope you can find the answers you want to hear from this or the other treads.

https://forums.moneysavingexpert.com/discussion/5146972

https://forums.moneysavingexpert.com/discussion/5145752

dwill1503

We just don't want to sit here with £15k debt over us when we have £80k in the house. Having a mortgage is not of great importance to us so it just seems like selling it & starting again in a few years is most sensible.

lee111s

Why not just set out a plan to pay off your 15k of debt?

Foxy-Stoat_3

I think you have made your mind up as to what you want to do, but selling up or taking equity out of property to pay unsecured debts is not the most cost effective way to go, unless you are unable to meet the repayments;

1. You will pay more money in interest and fees over the remaining term of the mortgage, assuming its longer than the loan.

2. If you sit on what ever is left and decide to buy again in 6 years time, house prices would of gone up a lot more than any interest earning savings account.

3. Assuming you have good tenants who are paying you the rent on time every month, you will miss out on the capital repayments on your repayment mortgage.

Good luck with what ever you decide.

Thrugelmir

As you are letting the property and no longer regard it as your home. Then I would sell it. Clear the debt you owe. No need to make any quick decisions as to the future.