Re Mortgage to re consolidate debt.

mayweather12

Hello,

I hope you are well. This is a query on behalf of my parents. They own a £180k property with circa £2k remaining on the mortgage, pretty much out right. They have came into a spot of trouble due to family circumstances and my mother has approx 15k debt which she would like to wipe (Credit Cards).

We were thinking if it is straight forward to remortgage the home for 20k and assuming as the home is pretty much out right this money would be ONLY used to consolidate her existing debt. Reason being she is spending upwards of £500 a month on credit cards, however understand a mortgage would be a fraction of that making her have no financial worries at all on an ongoing basis. She also has the full NHS pension coming in 3 years (35 years of service)... so no real financial issue long term however we have a very short term cash flow issue.

Can this be done? Current mortgage is with Alliance & Leicester? - when you re mortgage for debt like in this instance do the lenders agree that if she was spending £500-600 a month on credit cards and a re mortgage when we own 95%+ of the home will clear these negative credit cards - is this possible? She is aged 52. Her credit rating seems adverse (650) due to these credit cards being max'd out.

Thank you and I appreciate your help in advance!

getmore4less

If you don't fix the spending it won't work.

You will not be getting rid wiping the debt just moving it.

Why risk the house when there will be other ways to deal with this

mayweather12

getmore4less wrote: »

If you don't fix the spending it won't work.

You will not be getting rid wiping the debt just moving it.

Why risk the house when there will be other ways to deal with this

I'm sorry I probably wasn't clear enough - she has had perfect credit all her life until the last year and a half due to her mother's passing through cancer where costs just totalled. - This is a one off event

jayII

I'd look at transferring it to 0% or low % life-of-balance credit cards and throwing as much money as possible at the debts until they're paid off. I definitely wouldn't remortgage--firstly because it will cost more in interest and secondly because it puts her home at risk!

I also seem to remember that most lenders have a lower limit for mortgages--something like 40k? But I could be wrong about that.

mayweather12

jayII wrote: »

I'd look at transferring it to 0% or low % life-of-balance credit cards and throwing as much money as possible at the debts until they're paid off. I definitely wouldn't remortgage--firstly because it will cost more in interest and secondly because it puts her home at risk!

I also seem to remember that most lenders have a lower limit for mortgages--something like 40k? But I could be wrong about that.

This was also my suggestion but she will not get accepted for another credit card with a 0% balance.

amnblog

Yes,

There are plenty of sensible solutions for this, even if her current lender won't help.

A broker is her safest option as by law they need to consider, a remortgage, a further advance from the current lender, a top up mortgage from another lender. Your mum will then be advised on the best option.