told remortgage not an option

carlrac

Hi all,
This is tale of complete stupidity.Over the last couple of years I have racked up credit card debts of £17000,loans of £29000 which have no defaults & paid on time,plus I have £12000 of debt currently being paid off at £50 a month through debt collection agency (which because is over 6 years old doesn't appear on my credit report).At this time my credit score is classed as fair,my wifes is excellent.Also I am self employed at the moment & I am due a tax bill in November of about £10000 that I don't have.
All this due to gambling.
I am now having counselling & have seen the light so to speak,but maybe too late in the day.
In July I am starting a very secure( £50000 p/a paye job & my wife earns £19000 p/a.
I was desperate to sort the mess so I looked into remortgaging,basically my mortgage currently stands at £65k,I wanted to remortgage for £140k on a house worth £260000 but have been advised by a broker that there is zero chance of doing this.
Is this really the case when there is so much equity in the house?
His answer to my problems was to sell up & rent,an IVA or bankruptsy.To say im gutted would be an understatement,is he right in what he says?

amnblog

There may be a way to do this but it may not be smart.

You are struggling not to borrow what your cannot afford due to your habits.

You currently have £58,000 of debt due to this. Fortunately, none of it is secured on your home.

Fine to secure debt on your home one you have proven you are in control. But secure the debt - Have further problems - Your home is at risk.

carlrac

Thanks for the reply. I really need to weigh up all the options open to me & you say there may be a way, although you advise this course is unwise could you inform me as to what it was?

middleclassbutpoor

I would really consider the idea of selling up - from an outsider looking in - you could repay all of your debts and close your credit cards down - rent for 6 months and get your job confirmed as I'm sure there is a probationary period to go through and then go to buy a house with a decent deposit and no debt on your file etc.

Above everything else, you will have a clear credit file, your income will provide you with the ability to maybe save some money too- add to your pension etc. and view it as an opportunity for a new chapter of your life

carlrac

Thanks for the fast reply,I really didn't want to sell up if possible as all this has left my marriage hanging by a thread,having to sell would basically end it.

minimike2

An IVA or similar would likely be your best route.

It *could* be done on a mortgage, but that would be a highly risky thing to do given your circumstances. Any good advisor worth their salt would not recommend you do this as you will be putting your home at risk.

I don't agree that selling up has to be the way to go, but mortgaging your house to repay such large gambling debts it not a good idea.

You sound like you have taken the first step towards sorting out your habit - So well done for that. Addiction is hard to kick - You need to keep focussed on this and make sure you keep up your counselling and maybe look for a support group to attend as well?

I believe selling up and putting that kind of turmoil on your home life would actually be detrimental to your recovery. It would also put all the equity in your hands - Could you trust yourself with access to that money?

It sounds like have the stability of a home with a low mortgage and a lot of equity, so why jeapordise that? If you go over to the debt-free wanna be board, you will be able to get some advice on looking at something like an IVA - arranging it yourself will save a fortune and get the debt repaid faster.

Being in an IVA will also wreck your credit history for a while..... Whilst usually we give advice here on how to improve it, in your situation not being able to borrow would probably help you.

Good luck.

carlrac

Thanks Mike for your thoughts,so it seems the only doors that are open to me are the ones I really didn't want to go through,oh well that'll teach me to be so stupid.

minimike2

What are your reservations about an IVA?

I know it is daunting, but when you come out of the other side of it you are likely to feel like a different person and have a big weight off your shoulders. Adding all that borrowing onto your mortgage would be a much longer period of pay back and forever leave you pondering on what happened to get you into that situation.

I also think it is important to give yourself a break and forgive yourself. Yes, it was silly, but you know what, you've faced up to it, you are trying to do something about it and for that you deserve to get some respect, including some from yourself.

carlrac

I'll have to look into all options open to me but very disappointed that the remortgage option is closed to me as consolidation plus a bit extra would be easily affordable in the new job,would be paid in 11 years & leave my credit rating & self respect in tact.

minimike2

I understand.

Whatever you do from here I wish you the best of luck.

elsien

What are your wife's thoughts about the remortgage option?

I have to be honest, if it were me I'd need you to demonstrate that the gambling was under control for a longer period than may be the case so far, before wanting my home to be used as equity for further borrowing.

Going forwards, this needs to be a joint decision/commitment so she needs to be on board with it.