Mortgage and credit card advice please

Munskin

Hi all,


I was just looking for some advice. I'm looking at ways of paying off my credit card debt (£19,000). Presently, I'm shopping round and switching between 0% deals, but I'd really like to get it paid off as soon as possible (wouldn't we all?).


I'm presently renting a house, but I also own my own house that I have tenants in. The house is valued at £115,000 and the mortgage is for £90k. Presently, we're on an interest only mortgage, as it was the house we used to live in before we moved away. The trouble is, our financial advisor told us that he could get a "consent to let" on this mortgage, so we didn't to get a Buy to let one. However, later (after we had tenants), he informed us that we didn't have this consent to let and that, should anyone ask, just refer them to him.


This has been a big worry for us and we're really wanting to do everything right. One thing we would really love to do is release some equity from the mortgage to pay off our credit card debt, however, I'm the only one working at the moment (self employed £30k a year approx), so don't know if this is possible or not.


I just thought I'd ask on here before going to book a session with an IFA and wasting time.


Ideally, we'd like to keep the house and the tenants (as they are awesome), but release some money to pay off the credit cards once and for all. Is this possible do you think (aside from a lottery win!).


If this isn't likely, would a better option be to approach the credit cards and see if I can arrange a "life of balance" rate for the existing balances and just work my backside off?


Thanks,


John

Brightspark87

Hi just a quick note - you've not got much equity even without taking that £19k out. Most BTL need at least 25% deposit. Doesn't look good I am afraid. But speak to an IFA broker

Thrugelmir

With little to no equity in the property perhaps selling it is the better option. Using whatever is left after fees towards paying off your debts. As these's an obvious danger that the property may end up being a financial burden.

MoneyMission2015

Munskin wrote: »

Hi all,


I was just looking for some advice. I'm looking at ways of paying off my credit card debt (£19,000). Presently, I'm shopping round and switching between 0% deals, but I'd really like to get it paid off as soon as possible (wouldn't we all?).



If this isn't likely, would a better option be to approach the credit cards and see if I can arrange a "life of balance" rate for the existing balances and just work my backside off?

First thing I would say is most people on here would strongly advise against remortgaging to pay these debts off. You would be moving unsecured debt to secured, so risk losing the house if you were unable to pay.


As for what I've quoted above, you say you have been shuffling between 0% deals (good, no interest:)) but then you say you want to arrange a 'life of balance' rate and work like crazy to pay them off. If they're currently on 0% there's no point arranging a life of balance rate unless it is 0%, otherwise you'll just be increasing the interest paid. Also, if you would be working like crazy on a life of balance rate, just do that now with the 0% so you can pay them off as quickly as possible.


If your 0% deals have ended, have you checked to see if you can get any others? Have you asked any of your current cards if they can offer you another 0%?


I appreciate it's difficult, £19k of debt must be building up quite a high monthly minimum payment, so look at other ways to cut your outgoings to try and find extra money to go towards paying these debts off quickly. You say you're the only one working currently. Is your OH able to work or claiming anything they're entitled to that could go towards the household budget?


Good luck.