Consolidate Debts. Remortgage/Second Charge Mortgage.......advice appreciated!

D_M_E

Have a read of this

https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise

Then make your decision.

Mortgage - interest of around 2%, can go up or down after end of fix.

Second charge loan - interest around 10% if you're lucky, only ever goes up, hardly ever, more likely never goes down.

You need to seriously cut down on what you buy and spend money on and put everything spare to clearing debt, even if that means no going out and no holidays for a while.

financegeek

D_M_E wrote: »

Have a read of this

https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise

Then make your decision.

Mortgage - interest of around 2%, can go up or down after end of fix.

Second charge loan - interest around 10% if you're lucky, only ever goes up, hardly ever, more likely never goes down.

You need to seriously cut down on what you buy and spend money on and put everything spare to clearing debt, even if that means no going out and no holidays for a while.

While i'm not saying a second charge loan is the best way forward here, as i agree getting the spending under control is what's most important, the above is incorrect.

since second charge loans became regulated by the FCA in 2016, they're regulated in line with mortgages. e.g. if the OP opts for a base rate tracker product, it will only ever rise or fall in line with the base rate.

if the OP were to go with an SVR rate (as first charge mortgages offer) then the rate can be more volatile as is linked to cost of funds, but again this is no different to a first charge (and the 'mortgage prisoners' being talked about in the press at the moment).

the key is to read what you're signing and make sure it's right for you and that you fully understand it.

Brock_and_Roll

OP:

You posted this back in 2014:

Myself and my wife are looking for a list of mortgage lenders who are happy to deal with a discharged bankrupt (myself). I have been discharged for nearly 7 years. We both now have good credit files and with good salaries and a decent deposit we are looking for some help

As other posters have indicated, there is a need to understand the root cause of the overspending otherwise the next time you & your partner will lose the roof over your heads

-taff

berniebeyer wrote: »

We are fairly high earners but as the debt is spread over 6 lenders we are a bit short each month, in an ideal world we wanted it in one place and attack it with overpayments and giving us some more money each month.

This is a common response to having debt. People think if it's just one payment, it's much better, you owe less, etc. It doesn't. You owe the same amount [ or more if you've gone the consolidation route - borrowing more money over a longer period of time means you owe more money even if you try to fool yourself you don't].


Think about what you wrote logically.


You want to borrow more money to pay off the debt.
You want this to be one payment a month.
You want to pay this amount every month
You also want to overpay this amount so you can 'attack' it.
You want to have more money available each month.


Absolutely none of that makes sense.


What you really mean is that you want to avoid confronting how much you owe by fudging the total amount, you want to borrow more money so you can spread out the payments over a longer term, you want to borrow more than you owe so you can fool yourself you have more spare money.


Tarambors post is spot on. Make a budget out of your actual money coming in, post on the debt free wannabe board to see where you can save money. Don't fall into the same trap again and for heavens sake, please learn that consolidating DOES NOT WORK.


And if you think I'm on my high horse giving out advice, I've been where you are, and it took me a good ten years to learn that. Be a bit more intelligent than I was.