Debt management Plan & Equity Release

nickyg890

Hi I just wondered if anyone on hear has or knows of anyone being on a DMP taking equity from the house to pay off their debts.

I owe approx £20k and have approx £60k equity in my home, so I have enough there to clear my debts entirely.

I checked my credit rating last week and im 0, I cant see this would come into it as most people on DMP's would have equally bad credit rating.

I have got a review coming up with my DMP company but its not for another week yet and just wanted to find out a bit more.

Thanks

sourcrates

Hi,


It can be an option for some people, it all depends if you can get a re-mortgage on suitable terms, you will be turning unsecured debt into secured debt though, you need to think long and hard before committing to that.


Most of all you need to know if this option is going to be affordable, can you comfortably cover the new level of mortgage payment ?


You will find affordability is the big issue nowadays, it will obviously depend on your personal circumstances, it may not be suitable for everyone though.

National_Debtline

Hi

Sourcrates’ point about turning unsecured debt into secured debt is an important point to consider when thinking about equity release to clear debts. It can put your home at risk if you can’t afford the payments in future.

Have your creditors frozen interest on your debts in the DMP? If so, you might end up paying more overall through a secured loan as interest would be applied.

James
@natdebtline

HappyMJ

nickyg890 wrote: »

Hi I just wondered if anyone on hear has or knows of anyone being on a DMP taking equity from the house to pay off their debts.

I owe approx £20k and have approx £60k equity in my home, so I have enough there to clear my debts entirely.

I checked my credit rating last week and im 0, I cant see this would come into it as most people on DMP's would have equally bad credit rating.

I have got a review coming up with my DMP company but its not for another week yet and just wanted to find out a bit more.

Thanks

With a credit rating of 0 it's extremely unlikely you will find a mortgage with an attractive interest rate so I really would advise against this course of action.