Mortgage additional borrowing debt

desperado88

Thanks for all the replies on my problem i have taken a lot on board and now have a few more questions to ask them now so now its just a case of roll on monday until my appointment with the bank.A bit apprehensive as its either this or a DAS/DMP but hey they dont know that.
Thanks again everyone.

Money_Rollercoaster

I messed around with mortgage calculators and keeping your mortgage at the same sum, but extending the term by 5 years should free up £100 a month. You would increase your total interest paid by about £3k. But, there's potential perhaps for you to work toward clearing your unsecured debt (inc. finding a way to reduce the interest you're paying - without securing the debt on your house) and then overpaying on your mortgage / remortgaging to reduce the term again.


I don't know whether this is feasible for you, but you should be looking at all options really. It's worth noting that although extending / reducing your mortgage term is supposed to be possible at any time, the lender might refuse to amend your term if they think you're struggling with your existing financial commitments. Assuming this is the case, you maybe need to watch what you say to your mortgage provider ...


EDIT - I've been reading the thread again and it seems that you've got a few cards. It could be that the approach I've suggested could work to your advantage. If you can keep up the high level of CC payment for say another 12 months, that might see off one or more cards entirely and improve your credit worthiness allowing you an opportunity to shift some of the outstanding balances to cheaper rates.


Don't forget as well that there is sometimes the option of switching balances between providers. Your standard APR might be high, but one or more of your cards might have balance transfer deals available for you to move balance from another card - you just need to find a way to shift the debt between them so a lower proportion of your overall debt is attracting the full interest rate.

desperado88

Appointment is on monday.Had a bit of time to think about this and look at all the help i have been given and have come to the conclusion that it would be probably be smarter doing a DAS/DMP(maybe should have done a few years back) i mean i don't have that long on my mortgage and could probably do a DAS thingy and be debt free and mortgage free within ten years(roughly) instead of paying the bank all that interest over 16 years and it being secured as well.So i have a lot to think about over the next 2 days and might even go and see what they say anyway.Thanks again for all the ideas i think my journey is just about to begin :?

desperado88

Oh my head just had meeting with the bank and they say that they can help at rate of 3.5% and can overpay up to 3% a year although it would take sixteen years to pay off.So total monthly payment £650 ish,iam on a fixed rat until march next year.
Just looked at noddle and says i have a 60% chance of a loan with hitachi finance at a rate of 3.2% for £15000-£20000 although over 5 years only.
My god my head is busting with this,scared to make a mistake and make it worse.

enthusiasticsaver

It is difficult to give you informed advice without you putting up a soa showing exact income and payments and interest rates but on a simplistic analysis your options are as follows.

If you go for a dmp they will ask for income/expenditure confirmation and they may well decide that you can easily afford the £700 monthly repayment to debt. If however your soa shows that you have no leeway to pay the £700 you will get a more affordable monthly payment and interest will probably be frozen but your credit file trashed meaning no remortgage deals probably although this may not necessarily be the case. I have heard of people being able to remortgage after a dmp.

If you decide not to go down the dmp route then essentially you have three options.

Either carry on paying the cards down as now and hope for 0% deals as the debt decreases.

Put it on to your mortgage and almost double the payment, add 5 years to the term and wipe out any equity. If you lost your job and were unable to afford the £650 per month your home is at risk. You also need to make sure you are now living within your means and take out no more credit.

Apply for the hitachi loan and 3.2% is a good rate if you are actually offered that. Obviously you will still have other borrowings though and you need to make sure you take out no further credit. On the plus side if you really are unable to get 0% deals then the interest rate is a lot lower, it wont affect your mortgage and it is over 5 years so cheaper than the secured loan option. You still need to be able to afford the loan payment though and the other £12k of unsecured lending which cannot be cleared due to the maximum Hitachi will lend you.

Personally I think you are stuck between a rock and a hard place and as I say without an up to date soa it is difficult to advise but in your position I would continue as you are using the snowball calculator, cutting back as far as possible and try for 0% deals as the debt goes down lower. Second option would be the Hitachi loan providing the loan and remaining credit card payments are affordable and you actually get the 3.2% offered.

desperado88

enthusiasticsaver wrote: »

It is difficult to give you informed advice without you putting up a soa showing exact income and payments and interest rates but on a simplistic analysis your options are as follows.

If you go for a dmp they will ask for income/expenditure confirmation and they may well decide that you can easily afford the £700 monthly repayment to debt. If however your soa shows that you have no leeway to pay the £700 you will get a more affordable monthly payment and interest will probably be frozen but your credit file trashed meaning no remortgage deals probably although this may not necessarily be the case. I have heard of people being able to remortgage after a dmp.

If you decide not to go down the dmp route then essentially you have three options.

Either carry on paying the cards down as now and hope for 0% deals as the debt decreases.

Put it on to your mortgage and almost double the payment, add 5 years to the term and wipe out any equity. If you lost your job and were unable to afford the £650 per month your home is at risk. You also need to make sure you are now living within your means and take out no more credit.

Apply for the hitachi loan and 3.2% is a good rate if you are actually offered that. Obviously you will still have other borrowings though and you need to make sure you take out no further credit. On the plus side if you really are unable to get 0% deals then the interest rate is a lot lower, it wont affect your mortgage and it is over 5 years so cheaper than the secured loan option. You still need to be able to afford the loan payment though and the other £12k of unsecured lending which cannot be cleared due to the maximum Hitachi will lend you.

Personally I think you are stuck between a rock and a hard place and as I say without an up to date soa it is difficult to advise but in your position I would continue as you are using the snowball calculator, cutting back as far as possible and try for 0% deals as the debt goes down lower. Second option would be the Hitachi loan providing the loan and remaining credit card payments are affordable and you actually get the 3.2% offered.

Thanks for that,the reason that hitachi loan took my interest is that i could wipe out seven of my cards with just £10000 i already had a loan with them before 3 years ago and never missed a payment and is now settled so thought it might be worth a try.My income is £1400 every four weeks after tax and my pension deducted so very tight the way it is although all my payments are up to date no defaults.You are right there is no easy way out but hey things have been harder in the past with my childs health so i'm not going to let this beat me,just got to consider all my options and get the best advice (yours included) and get stuck in.I have shifted a good bit in the last couple of years so i am not to bothered i can live within my means now and it can only get better the more i pay.
Thanks for replying i really appreciate it and have taken it all on board.