Large Remortgage

SPANIEL36

i bought my house from the council in feb 05 for 43,000. i had some arrears with the mortgage but am currently up to date with all my out goings. i also have a 10,000 loan secured on the property as well as a few littlr debts.
what i want is to remortgage the house. it is currently worth about 80,000+ and pay off evrything and still have a little left over, my partnetr wants to go joint on the remortgage where as now its just me. is all this possible? what is the likely amount of a remortgage to be? i'm really a bit of a novice in this area so all advice is very much greatly received

herbiesjp

You will need to confirm when your pre-emption period finishes with the council, as most will only allow capital raising for home improvements as opposed to debt consolidation

Debt_Free_Chick

Putting your house in hock for the sake of some stuff you bought on credit is a very bad idea!

If you can afford the extra that a remortgage would require, why not simply use that money to pay off the debts? That way, your home is not at risk if you get into difficulty.

SPANIEL36

the pre-emption would finish in feb 08.

to be honest, the reason why i thought this would be simpler is that my partner would be able to come in on the mortgage with me and that would be the only 'debt' that we would have as all the others would be paid off and gone once and for all instead of payments here there and everywhere for the next months/years. with both of our earnings, we'd be able to pay the new mortgage between us no problem

Debt_Free_Chick

SPANIEL36 wrote: »

instead of payments here there and everywhere for the next months/years.

But you have other bills with separate payments "here, there and everywhere" which you manage, don't you?

with both of our earnings, we'd be able to pay the new mortgage between us no problem

In which case, you'd jointly be able to pay off your debts too

You are swapping unsecured debts which are not attached to your home with secured debt which is attached to your home.

Also, you will probably increase the repayment term - 20 years or more? So, unless you accelerate your repayments (and get a mortgage that allows overpayments) then you're swapping a short-term debt for a long-term debt. Longer term almost certainly means you'll pay more to clear the debt - as the interest is likely to be more, even if the rate is lower.

And you get no flexibility in the amount you repay - you'll be swapping flexible repayments (assuming some of your debt is on credit cards) with fixed payments. And if you can't manage the fixed payments in the future (illness? job loss? other lifestyle changes?) then you've put your home at risk.

You just need a robust budget that deals with all the essential priority payments and get payment of those organised. Then look at how much you have to put to your debts. Pay fixed loans and minimum amounts to every debt, every month. The extra you can afford you pay onto the debt with the highest APR until it's gone. Then repeat this process with the remaining debts. I'm guessing your debts could be gone in 5 years or possibly less - difficult to be sure without having the details.

Have you looked at the Debt-Free Wannabe board?

SPANIEL36

thanks, ill go and have a gander. your advice makes a lot of sense, i didn't see any other way of sorting my finances. i'm glad you guys are on here with help on tap!!!