Advice wanted please....

Muppet_With_Money

I am looking for some advice about our current situation and what we should do for the best?

• Married - with children
• Both employed full time - Joint Salary ~ £125K
• Current House Value ~ £350K
• Outstanding Mortgage - interest only ~ £250K
• Secured Loan ~£90K
• Unsecured debts ~ £40K

We have in the past overspent, but things are getting under control now, paid off close to £40K of unsecured debt in last 18 months and this should be down to about £30K by end of October.

Would we be able to remortgage to a get an normal repayment mortgage with our secured loan?
Would we be able to remortgage the whole lot (mortgage and secured loan)
Would we be better to sell up and look to move into rented to clear the debt?
Would we be able to move to new home, using the equity in our home and transferring the secured loan to the new property?

Any other ideas. We have excellent credit history, no late payments or defaults and lots of settled accounts too. Both of us are mid 40s and in secure jobs.

Thanks in advance for you help and advice.

Mortgage_Mark_2

Would we be able to remortgage to a get an normal repayment mortgage with our secured loan? Not based on a value of £350k and total debt of £340k. Best you'd get would be 85% LTV of £350k elsewhere
Would we be able to remortgage the whole lot (mortgage and secured loan) As above, not at that LTV
Would we be better to sell up and look to move into rented to clear the debt? - Difficult to answer this but depends on how easy/quick it would be to save up another deposit from scratch taking into account likely rising house prices?
Would we be able to move to new home, using the equity in our home and transferring the secured loan to the new property? This depends on a number of things, value of new house etc but mainly the agreement with the secured loan company. Most secured loans in my experience are not portable, so you'd have to sell from the sale proceeds.

Landofwood

Mortgage_Mark wrote: »

Would we be able to remortgage to a get an normal repayment mortgage with our secured loan? Not based on a value of £350k and total debt of £340k. Best you'd get would be 85% LTV of £350k elsewhere
Would we be able to remortgage the whole lot (mortgage and secured loan) As above, not at that LTV
Would we be better to sell up and look to move into rented to clear the debt? - Difficult to answer this but depends on how easy/quick it would be to save up another deposit from scratch taking into account likely rising house prices?
Would we be able to move to new home, using the equity in our home and transferring the secured loan to the new property? This depends on a number of things, value of new house etc but mainly the agreement with the secured loan company. Most secured loans in my experience are not portable, so you'd have to sell from the sale proceeds.

Interesting, so other secured debt must be included in LTV calculations when remortgaging?

Muppet_With_Money

Just wondered if anyone else could offer any advice on this situation?

Many thanks

MWM

libf

Keep paying down the debts and re-mortgage when they're less/gone.

Mortgage_Mark_2

Landofwood wrote: »

Interesting, so other secured debt must be included in LTV calculations when remortgaging?

Sorry - seem to have missed this!

Yes - the only way this would be possible is staying with the same lender - other lenders will not remortgage and keep an additional charge in place, as charges over property are registered in chronological order, so any new 'mortgage' company will be behind the previous companies in the queue.

getmore4less

Consolodating does not get rid of the debt just moves it around
depending on the rates might not make a lot of difference anyway

The starting point is a SOA.

http://www.stoozing.com/calculator/soa.php

post here or

http://forums.moneysavingexpert.com/forumdisplay.php?f=76

With all the details of the current debts and terms of the mortgage/loans.


Plenty of help to optimise paying off the debts and looking for ways to increase the money available for debt repayments.

You are effectively renting now with an interest only mortgage, what are those payments compared to a rental property.

amnblog

Just keep payments the debts off.


You must be heavy spenders given your debt to income.


This needs to change as you have little opportunity to solve anything with a re-mortgage currently.

Muppet_With_Money

Thank you to those of you who have replied. We really appreciate it.

We have been reckless with money in the past, but things are definitely improving, in terms of getting rid of the unsecured debt. We should have never taken out the secure loan and should have bitten the bullet at that point, but we didn't, we kept on spending.

As it looks like we might not be able to remortgage at the moment. I think we will have to have a look at selling up and renting. At least then we will be clear of the secured loan and we can start again.

It's been a tough learning curve, but it is one that we have learnt from. I just wish we had learnt it earlier.

Renting somewhere will probably be cheaper than what we are paying now too, so that can help with the debt busting and the saving for a new deposit.

Thanks for your advice, it is very much appreciated,

Thrugelmir

Muppet_With_Money wrote: »

We have excellent credit history,

Lenders will profile you as potential borrowers and the risk you pose.
Meeting monthly payments is only one aspect of many.

If you are ready for a Light Bulb Moment. The Debt Free Wannabe forum is a great place to start. Lots of non judgemental support and advice on there. Sometimes it's good not to tackle problems in isolation.

getmore4less

Remember to compare renting somewhere to current payments the interest is the main measure.

Capital payments are debt reduction/savings/equity.

Do the SOA and get impartial views on your options.


Selling and buying later is big cost so needs to be considered carefully.

If wanting to move anyway it can be part of a plan if not staying put may be a sensible option.