Mortgage cash advance

Zenboor

Greetings.

Brief Summary:

Gender: Male
Age: 37
Marital Status: Married
Dependants: 3
Single Income: £36700
Mortgage: £510
Property Value: ~£1850000
Mortgage Balance: £128000
Debt Total: £13000

Although we're living within our means at the moment, I am struggling to make a dent in my over all credit card debts as I am paying just above the minimum payment on all the cards.

Was speaking to a friend who suggested it might be worth approcahing Halifax for a mortgage cash advance but when I look at the above figures I feel like it's a waste of time. We currently have another year before our fixed deal runs out. Should I wait until then to try and free some equity? The credit cards have all been destroyed and the debt has been reduced by £3600 to its current figure above. I have alco cancelled all unused cards and plan to cancel every one that I manage to pay off to make sure I don't fall in this tupid trap again.

Any suggestions?

MortgageMamma

Zenboor wrote: »

Greetings.

Brief Summary:

Gender: Male
Age: 37
Marital Status: Married
Dependants: 3
Single Income: £36700
Mortgage: £510
Property Value: ~£1850000
Mortgage Balance: £128000
Debt Total: £13000

Although we're living within our means at the moment, I am struggling to make a dent in my over all credit card debts as I am paying just above the minimum payment on all the cards.

Was speaking to a friend who suggested it might be worth approcahing Halifax for a mortgage cash advance but when I look at the above figures I feel like it's a waste of time. We currently have another year before our fixed deal runs out. Should I wait until then to try and free some equity? The credit cards have all been destroyed and the debt has been reduced by £3600 to its current figure above. I have alco cancelled all unused cards and plan to cancel every one that I manage to pay off to make sure I don't fall in this tupid trap again.

Any suggestions?[/QUO


Its doable and affordable if you pay off all debt, but you have to remember you will pay more for the debt over the long term as you will be securing it against your home for however long is left to run on your mortgage. Its also worth exploring the option of a secured loan to see if that would work out cheaper, you would have more control over the term of the £13k then as well.

foxy-stoat

If Halifax agree to release equity to cover debt consolidation they will assume affordablility and payment over 7 years even if your term is say 20.

If you can chip £3000 off by the time your fixed term ends and you no longer use them and have done the 0% interest shuffle I would just keep paying them off and leave your the equity in your home.

Zenboor

MortgageMamma wrote: »

Zenboor wrote: »

Greetings.

Brief Summary:

Gender: Male
Age: 37
Marital Status: Married
Dependants: 3
Single Income: £36700
Mortgage: £510
Property Value: ~£1850000
Mortgage Balance: £128000
Debt Total: £13000

Although we're living within our means at the moment, I am struggling to make a dent in my over all credit card debts as I am paying just above the minimum payment on all the cards.

Was speaking to a friend who suggested it might be worth approcahing Halifax for a mortgage cash advance but when I look at the above figures I feel like it's a waste of time. We currently have another year before our fixed deal runs out. Should I wait until then to try and free some equity? The credit cards have all been destroyed and the debt has been reduced by £3600 to its current figure above. I have alco cancelled all unused cards and plan to cancel every one that I manage to pay off to make sure I don't fall in this tupid trap again.

Any suggestions?[/QUO


Its doable and affordable if you pay off all debt, but you have to remember you will pay more for the debt over the long term as you will be securing it against your home for however long is left to run on your mortgage. Its also worth exploring the option of a secured loan to see if that would work out cheaper, you would have more control over the term of the £13k then as well.

Thank you.

Yes, I've also considered a consolidation loan, although the rates I was offered on various soft searches are way too high. For example, ratesetter offered me a loan of £13000 at 17.9% which doesn't seem to be worth it even if there are no early repayment charges. This suggests that I don't have a desirable credit history but when I checked recently I found 2 late payments from 2 years ago plus thefact that I have cancelled unused credit cards, my credit utilisation percentage has gone over 50% of available credit.

Do you suggest I approach Halifax directly or use a broker to find a better deal when we our deal runs out in 12 months?

Sorry for all the questions but I feel a bit stressed about all of this. I realise that adding this to the mortgage will mean paying more in the long run but I looked into the early repayment charge and it's 4% which isn't terrible.

I know one thing for sure though. I'm never EVER taking out another credit card again. Silly boy me. For the last 12 years I have managed to live pretty normal life with no credit at all yet I've managed to get myself in £13000 debt within 18 months of opening my first credit card. :eek: and this is by a someone with 3 young kids and a stay-at-home mum livign on one income. I am so ashamed of myself I feel physically sick!

Zenboor

foxy-stoat wrote: »

If Halifax agree to release equity to cover debt consolidation they will assume affordablility and payment over 7 years even if your term is say 20.

If you can chip £3000 off by the time your fixed term ends and you no longer use them and have done the 0% interest shuffle I would just keep paying them off and leave your the equity in your home.

Thank you. You're right to be honest. I actually wrote down my options and what you say above is what I was thinking before. Of the £13000 debt, £2000 is 0% for another 24 months and £3500 is 0% for 6-12 months. The remainder is the worst so I'm tackling these three cards first.

MortgageMamma

Zenboor wrote: »

MortgageMamma wrote: »

Thank you.

Yes, I've also considered a consolidation loan, although the rates I was offered on various soft searches are way too high. For example, ratesetter offered me a loan of £13000 at 17.9% which doesn't seem to be worth it even if there are no early repayment charges. This suggests that I don't have a desirable credit history but when I checked recently I found 2 late payments from 2 years ago plus thefact that I have cancelled unused credit cards, my credit utilisation percentage has gone over 50% of available credit.

Do you suggest I approach Halifax directly or use a broker to find a better deal when we our deal runs out in 12 months?

Sorry for all the questions but I feel a bit stressed about all of this. I realise that adding this to the mortgage will mean paying more in the long run but I looked into the early repayment charge and it's 4% which isn't terrible.

I know one thing for sure though. I'm never EVER taking out another credit card again. Silly boy me. For the last 12 years I have managed to live pretty normal life with no credit at all yet I've managed to get myself in £13000 debt within 18 months of opening my first credit card. :eek: and this is by a someone with 3 young kids and a stay-at-home mum livign on one income. I am so ashamed of myself I feel physically sick!

Don't beat yourself up about the debt, we all make mistakes I've also pushed the limits about 10 years ago and it took me 4 years to pay off and I really had to drive down the food budget etc. Me and husband didn't have a single night out for 4 years! We still don't go out more than a few times a year.


The important thing to remember is don't stress to much. I do think you would be better seeing a broker but I am biased as I believe in people getting whole of market advice, not just from one lender. If you are prepared to accept that securing the debt to your home has consequences in that it lowers the amount of equity you have and also you pay more interest over the long term, then there is nothing wrong with consolidating it. You must remember though that house prices can go down as well as up, and a full affordability assessment must be done to see that you can afford the additional borrowing if interest rates rise.


There are many people on here who would caution you not to add the debt to your mortgage. Everyone is entitled to their opinion, but only you can be certain which is the best option to take. I personally think there has to be a balance achieved between paying off debt and maintaining a somewhat normal standard of living.

Kynthia

Don't be too hard on yourself. As long as things don't get worse and you learn from it, it's just an expensive mistake that you can put right and isn't costing you your home or relationship.

Have you been to the debt free wannabe part of the forum? There might be people there who can suggest other options on reducing the interest you pay or consolidating the debts.

Thrugelmir

MortgageMamma wrote: »

There are many people on here who would caution you not to add the debt to your mortgage. Everyone is entitled to their opinion, but only you can be certain which is the best option to take. I personally think there has to be a balance achieved between paying off debt and maintaining a somewhat normal standard of living.

Unfortunately the statistics bear out the fact that people are likely to reoffend so to speak. All down to human nature. Adding debt to the mortgage often doesn't make the problem go away. Simply kicks the can down the road. Until the next financial crisis strikes.

Thrugelmir

Kynthia wrote: »

Don't be too hard on yourself. As long as things don't get worse and you learn from it, it's just an expensive mistake that you can put right and isn't costing you your home or relationship.

Have you been to the debt free wannabe part of the forum? There might be people there who can suggest other options on reducing the interest you pay or consolidating the debts.

Second this. Not having a feeling of being alone helps boost morale. People do go to extraordinary lengths to get their personal finances back into order.

Zenboor

Thrugelmir wrote: »

Unfortunately the statistics bear out the fact that people are likely to reoffend so to speak. All down to human nature. Adding debt to the mortgage often doesn't make the problem go away. Simply kicks the can down the road. Until the next financial crisis strikes.

That's a fair point.

What makes it worse is that I've been pretty good with money most of my adult life. The worst thing I had done before this was maxing out a student overdraft to £750 then spending an entire summer holiday paying it off!

We've always lived on a single income and in 12 years I never used any form of credit. Always lived within set budget and managed to earn enough to enable us to live a fairly comfortable life.

enjoyyourshoes

Ideas:-

1. Can you reduce your household cost and throw more at the debt? (ditch fags, mags, lotto, extended warranties, sky, eating out, treats, booze,lattes, Mac D, etc)
Be frugal with food, list in kitchen, meal plan, scratch cook, review store cupboards then do final shopping list, buy only on list, go once week, cook on shop day and freeze, freeze your lunches (no sushi from M&S, no snacks at filling stations etc )

2. Can partner get PM or nights job (assuming they childcare during day) to earn more cash for household.

3. Manage money better:-

Reconcile bank account daily (to know where money is going and know when to stop spending) Include all costs inc CC, switch, contactless, SO, DD etc (30 seconds a day)

Do annual cash flow of all yearly, 1/2 & 1/4ly bills (utilities, insurance, car stuff, etc) Calculate how much need to accrue monthly to meet these obligations and deduct this from your bank reconciliation and put it in high rate account. Put in diary when contact up for renewal. Takes 30 minutes per year.

Review any contracts coming for renewal a moth before they terminate, review spending, DD/SO each month and look for savings. Review your savings plan and investment plans. (30 minutes per month)

So its 30, 30 , 30.

Don't need expensive software to do this just pen and paper.

But get partner in agreement and involved as its joint effort and both have to want and agree to do this.