Remortgage & Additional Loan (Maybe Secured Loan),

AF1962

I am experiencing financial difficulties and on the verge of defaulting. I am financially prudent and always do everything I can to meet all my commitments every month. But, once my bills are paid; I always relies on credit cards for my day to day spending as I always have nothing left. I live a modest life; I don’t drink, smoke or party. The background to my financial state is circumstantial and not due to recklessness.

I am 55 years old; currently working as a private hire driver (mini-cab). My gross taxable income per year is about £24,500 after all expenses.

• I have about £48,000 left on my mortgage (SVR 0.79%), £595 per months, less than £30 per month interest and less than 7 years left to pay off the mortgage. The property is valued at least £365,000. I have never miss a payment.

• My non-mortgage debt is about £63,000 (6 credit cards & 1 loan), interest rate ranges from 7.9% to 22% and about £1,350 per month to service these debts and pay the minimum required payments. I had a late payment for the first time with one card payment last month.

I spend the last winter months with no heating or hot water. My flat is in state of disrepair; my boiler has broken down, my central heating radiators are rusty and need replacement, the walls are moulded and peeling off. The only option I have is to increase my working hours but heaven knows, I can't work any harder than I am working at the moment. I have hardly any life other than a cycle of working long hours, eat, sleep & recuperate and back to work.

I have tried to find solution to these problems including applying for re-mortgage but without success due my high level of non-mortgage debts and affordability assessment.

Plan A:
Maintain a mortgage of £125,000 spread over 14 years (pay off all other debts and about £15,000 for essential repairs). Furthermore, apart from the mortgage, I intend to have no other debt.

Plan B:
Maintain current mortgage (£47,500) 7 years remaining. Additional borrowings of about £75,000 (interest rate not above 6%) to pay off all other debts. Apart from the mortgage and the additional loan, I intend to have no other debt.

Finally, I felt I have 'reached the end of the road', I would be grateful for any advice and assistance. Thank you.

PeacefulWaters

Sell up, pay off all the debts with the proceeds, trade down to a cheaper property.

Then address your insane overspending on unsecured credit products.

bengalknights

I agree with Peaceful here you could trade down to a smaller property

StopIt

Plan C:


Post a full SOA here, address why you're in this debt.


You say you have £24.5k taxable income, so that's £1650ish post tax.


Take off £595 for your mortgage and you should have at least £1,000 for other bills and living expenses.


Just what did you spend the rest on to get to £60k of debt?


I'd be talking to a debt charity about getting a DMP in place. Borrowing more is a bad idea, and secured borrowing is utterly insane. Even spending £600p/m can clear that debt in less than 10 years. As opposed to extending your mortgage by another 7 years AND putting your home at risk.

System

Very unlikely to get a mortgage due to your level of unsecured debt. Sell up, pay off debts, buy cheaper property mortgage free is the best option.