Remortage to pay off debts

Cortina123

Wondered if anyone could offer help.
I am in quite a lot of debt with credit cards and loans, I am paying £3000 month on payments + I have my mortgage to pay on top.
I run up debt for home improvements,, car, etc.. (I have learnt my lesson, and this will never happen again)!
I have applied for a couple 0% cards but this is not really going to help!,
I have never been late or defaulted on any payments.
my house is valued I would say at £200000 and my mortgage balance is £120000.
I earn £36000 before tax a year. and can prove my income, employed full time.
I am so stressed and worried, I have no spare money as it is all going on payments.
Forgot to add debt amount is £33000

I was hoping to be able to remortage to pay off my debts and reduce my monthly payments, however I am not sure lenders would be interested as I have this amount of debt, although i dont have any missed payments or anything like that.

Does anyone know if this could be a possibility?
Thank you, hoping that if there is a chance I may be able to sleep a bit easier :-(

Cortina123

I guess what im trying to work out is, do I need to put down on the application form my credit card debts and loans that I am going to pay off with the remortgage. As these will show on a credit check but will they take in to account that I am going to pay these off , as this is the whole point of the remortgage

Shashy

Cortina123 wrote: »

I guess what im trying to work out is, do I need to put down on the application form my credit card debts and loans that I am going to pay off with the remortgage. As these will show on a credit check but will they take in to account that I am going to pay these off , as this is the whole point of the remortgage

Turning unsecured debt in to secured debt is generally considered a very bad idea, since if you struggle to meet repayments your house is collateral.

You need to first address the cause of your over-spending. Post an SOA and people will be along to help.

sourcrates

Hi,

Consolidation can work, for some people, but its a very risky step to take.

Most of the time its just another "stop gap" before the bottom drops out.

The problem you may have is that the company who you apply to, have no way of knowing if the money they provide will go to clearing debts, or go towards a month in the Bahamas, they will look at your current borrowing and most likely say you are already over stretched, the loan is simply unaffordable.

I would say you would be better off with some kind of debt solution, rather than further borrowing, you need to just take a step back, and think rationally here, the borrowing cycle must stop because your not actually lowering the debt, just moving it around.

MEM62

So your debt repayments, exclusive of mortgage and other living costs, are 100% of your gross income. On the face of it your financial situation is untenable and certainly stressed beyond the point where adding the debt to your mortgage will provide a solution.

That aside, you cannot borrow your way out of debt. This been tried by many and it generally fails.

I think you need to seek proper advice and I would suggest that you contact one of the debt charities for a chat.

EssexHebridean

First step - Statement of Affairs (SOA) - go to the "Sticky" post at the top of this board for the link - and post it in here so we can get a proper idea of where you're at and what might be the best solution for you. Don't panic - there is ALWAYS a solution, it's just a case of finding out which one is best for you but generally speaking as a homeowner, putting your home at risk is NOT going to be i your best interests.

MiMi66

Hi Cortina123

I am in a similar situation to you, home worth about £200 000
With mortgage at £89 000 ish and cc debts at 37 500 - embarrassed still to be dealing with this after 4 years post my light bulb moment but none the less still here trying. I use 0% ccs to shift the balances but have fallen foul of borrowing a bit more multiple times and also some tricky life events.

Not meaning to high jack your thread but just wanted to give a save and say you are not alone and I'll subscribe to fine some support and also reflect on my own journey. I am aiming to be debt free for the CCs in Dec 2021 - which is a year longer than I hoped but. Definitely not adding it to the mortgage which is coming down nicely.

Good luck!

Mnd

Don't put the debts on your mortgage if you can help it.it makes it a secured debt then against your house. Take the above advice and do your SOA. there will be plenty of help for you

bobcat2

Assuming your debt repayments are £300 a month not £3000?
Obviously not knowing the full details but think its pretty unlikely you'd be able to remortgage for that amount, and generally not a good idea and better ways of addressing the problem.
If it were me I would first look at the possibility of doing something like changing your existing mortgage to interest only or increasing the term and using the extra money saved to chuck straight at the credit card debt. In my opinion it makes no sense to be paying off a mortgage at low interest rate while having credit cards at a higher rate, Once the credit card debts are clear you can then use the money you were paying on them to overpay the mortgage to get back on track and that way you don't increase your secured debt.
I would definitely have a look at your mortgage though, if you're not on a fixed deal you may be able to save a lot of money just by remortgaging for the same amount. Doing a proper statement of affairs would be a good first step though

enthusiasticsaver

Do not remortgage. You are obviously in a lot of debt but putting it on your mortgage is not the way out.

First start a spending diary so you can see where all your money is going. Address any overspending and the reason why you accrued so much debt in the first place.

Post an soa on here for advice in getting down your expenditure

If you are unable to move any of the debt to 0% cards then tackle the most expensive card first. Let the loans run as they are for now. I assume that £3000 monthly payment is a typo as that sounds incorrect on £33000 debt? As the debt comes down you may be offered 0% deals.

Most important stop using the cards. Cut them up or put them away somewhere safe.

Cortina123

Mimi,
Many thanks for your reply,
I did not come back on here as just got so depressed with it all.
I am currently trying to remortgage with a broker, got aip with hard credit check, just put in full application, this has stressed me out even more.
It is a bit of relief to see im not alone, so thank you for posting.