should i borrow on my morgage to clear cc debt ?

mumofthetwins

Hi Guys


so I have decided to pull my head out of the sand and I would be extreamly grateful for any advice you could offer ?


so I currently have a mortgage with Halifax for 38000 at a rate of 3.99% but I am fixed until may 2018 with a monthly payment of £471.
I also have credit cards of around £22000 (this is what scares me ...) and at the minute I pay around £580 a month for these.


I was thinking would I be better off adding the credit card debt and paying the £1050 per month off my mortgage ?
at the minute I can afford this payment but it just feels like the cards are never ending ..


I have had a quick check online and it has said that I am eligible for the extra money but Im just completely useless when it comes to things like this .. my ex hubby used to deal with all the money side of things


any advice would be fab
Thanks
Lisa

sourcrates

Hi,

Turning unsecured debt into secured debt is never an easy choice.

The one fundamental thing you must do if you consolidate these debts is cut up the credit cards and never use them again.

If you do that, then it can be a way to deal with the problem.

If you dont, and you run up the debt on the cards again, you may be looking at Bankruptcy next time !!

Not trying to scare you, just pointing out what could happen if you are not careful, in your situation i may be inclined to go along with the consolidation idea, but you must be strict with yourself over future use of the cards.

Good luck, what ever you choose to do.

mumofthetwins

sourcrates wrote: »

Hi,

Turning unsecured debt into secured debt is never an easy choice.

The one fundamental thing you must do if you consolidate these debts is cut up the credit cards and never use them again.

If you do that, then it can be a way to deal with the problem.

If you dont, and you run up the debt on the cards again, you may be looking at Bankruptcy next time !!

Not trying to scare you, just pointing out what could happen if you are not careful, in your situation i may be inclined to go along with the consolidation idea, but you must be strick with yourself over future use of the cards.

Good luck, what ever you choose to do.

Thanks for the advice .. yep the cards would be cut up I ended up running them up after the split and a couple of year ago i had an extension which went over budget.


do you think I should make an appointment with the bank to discuss options ?


Thanks
Lisa x

ReadingTim

Have you tried any 0% balance transfer deals? I'd be tempted to try and shift some of the debt to a 0% deal, as long as I could clear the balance before the promo period ended.

atush

I agree with the above posters, if you put the CC debt on yur house, you must make sure to never go into debt again. And to save the 580 (less increase in mtg) into savings to use as an emergency fund.


And I too would look into 0% cards first as well.

And have you done a spending diary plus SOA to see if you have any waste?

Any freed up funds could be saved to pay off the 0% cards, or to boost your emergency fund so you dont fall into debt again.

mumofthetwins

Thanks Guys .. I am pretty strict with myself and I do keep a notebook with all dd payments outgoings and incoming which I update daily. The first thing I would do would be to cut the cards up.
do the mortgage companies normally put it as additional borrowing so both added together or is it a separate borrowing on the house .. hope that makes sense ..
I think I might try making an appointment .. im guessing it will be a while until I get one and im guessing I don't have to sign up there and then ?


Lisa

Wookey

It may also be worth asking the bank if you decide to go down the route of increasing the mortgage about a refix on the % rate they are giving you, even getting a .5% of it would be a bonus.

January2015

Have you tried getting an unsecured loan (good rates around at the moment). This would be preferable to converting unsecured credit card debt into secured mortage debt.

I wouldn't recommend either option though. I've consolidated a number of times (turning unsecured debt into secured debt, and also taking out a loan to clear the credit cards). It is so easy to run the debt up again and you are just deeper and deeper every time. I am just one of many on this this forum who have thought consolidation was the answer only to find ourselves deeper in debt.

enthusiasticsaver

I would not on any account turn unsecured debt into secured debt. Even if you cut up cards and resolved to not use them again and addressed the reasons for your overspending you will be more at risk of losing your home as the mortgage payment will go up and any unexpected loss of income could mean you miss payments. Consolidation rarely works as can many hundreds of thousands of people on this forum can testify. You think you are paying it off and do nothing to address the reasons why you are in debt in the first place. Consolidating is not paying it off it is just moving it and moving it to be secured on your home is in my opinion the very worst thing you can do.

First option should be to move as many of the credit cards to 0% as possible and cut all unnecessary things out of your budget to snowball the unsecured debt. Pay off the most expensive first while paying minimums to the rest. Sell anything you can to reduce the debt and use all options to increase income - 2nd job, lodger, surveys, mystery shopping etc etc.

With that amount of debt you should be cutting the cards up now. Post an soa on here and people will suggest ways of cutting back.

Fireflyaway

I wouldnt do it. Its just moving debt about and making it more risky. Not only will it cost more long term its putting your home at risk if for some reason you can't keep up the repayment. If you miss a payment on your credit card it might mess up your credit score but you can negotiate a repayment plan. If you miss a few mortgage payments you could end up homeless! Don't take the risk. Think of the long term, not just what feels good now. Do a budget and up your cc payments. Watch Dave Ramsey's debt free screams for inspiration! You can pay off huge amounts if you get focused.

mumofthetwins

Hi Guys thanks for the advice.
I am pretty good at staying in budget and I do keep a good check of all incomings and outgoings per month but it just seems like ill never be able to pay them off.
The cards were ran up when my extension costs went over budget a couple of years ago .. really I should have just gotten extra on the mortgage then.
I do have a 2nd job already and I budget and plan all meals.


Thanks again guys x