Remortgaging with £14k cc debt

noidles

My boyfriend and I have owned our house for almost 5 years. Our mortgage comes up for renewal at the end of August and we'd like to release some equity in order to make some renovations to the house. My boyfriend and I have really good salaries, so the current mortgage is more than affordable.

However, since having a baby 2 and a half years ago I've relied on my credit card more than I should have and the current balance is around £14k (the balance was at £7k before I had my child). Most of which is on a 0% deal. I've since had a pay rise and have increased my hours at work, so I know it will all be payed off by December 2020.

But I'm concerned about when we come to renew our mortgage in August, I am worried this amount of debt won't be looked upon favourably. I have read that I ought to keep my debt to available credit below 30%, and this is currently at about 40%. Has anyone else been in a similar boat and managed to get a good deal?

xyz123

You maybe able to do an online switch with same provider without any further checks but you need to consider your finances seriously. If you are earning together 7k a month then why not pay off some or all of your CC debt?

E30M3

it will count against you, and if you go through a broker they will be able to give you a better feel for it and if it matters. Affordability criteria has increased over the years.

I just remortgaged with nearly £10k CC debt (interest free) and there was no issue.
I do have that £10k in savings (long story) so I could have paid off if required.

sheepy21

So you have a house together, a baby together and are getting married but it’s beyond the scope of your relationship to just share all your money?? It makes no sense that your partner should be rolling in money with you apparently having footed the bill for the childcare and relying on credit cards.
Share your money, job done

kev2009

Alternatively, "borrow" the money from your boyfriend and pay the CC off and then pay him back, at least that way the CC debt is cleared which will mean remortgage should be easier plus you can pay him back the money and all is sorted. Agree x per month or whatever suits, you don't have to wait till you got the full amount to then hand over.

Kev

Thrugelmir

noidles wrote: »

I'd like to pay more, but the other spanner in the works is that we're getting married next year, and I'm also saving around £400 per month towards that.

Worth getting your priorities right. Given your current level of debt. Your credit profile will suggest to any potential lender that money management isn't your strong point. Why pay interest on a credit card ?

What state are your partners finances in? Good salary. Yet another £50k of debt to fund house renovations. Or is some of that for your wedding.

Time for a serious chat with your partner.

enthusiasticsaver

Having credit card debt will count against you and may impact the amount you can borrow and going overdrawn is just as bad if not worse. Bear in mind interest rates can increase so that £1550 would not only increase if you release equity but if rates rise it could go up substantially. Given presumably your boyfriend is the father of your child why was the financial burden of maternity leave and childcare solely your responsibility and how did he think you would be able to afford the same level of bills on a much reduced income?

It sounds a bit like a recipe for disaster to me. Increased costs due to childcare, saving for a wedding, increased mortgage due to wanting to do work on house plus existing credit card debt and presumably no savings? It hardly shows sound finances and a fully thought out plan. All it takes is one of you losing your job and you really will be in dire straits.

csgohan4

you need that expensive wedding or renovation, it's a choice, therefore debt is a choice as well. Piling on more debt will not solve things

AnotherJoe

Stop kicking the debt and expenditure can down the road.
Clear the cc debts first. Don't be fooled by the fact its at zero interest as if that means its not a debt !! Its still a debt that needs to be repaid and you are fooling yourself when you say you have £X saved if you also owe £X+++
Use what would have been your increased mortgage payments to pay off the CC debt as fast as you can.

At the same time get your spending on an even keel.
All that should only take a few months at your current level of earnings.

Only then look at house extension/renovation.

downhillfast

I've never really got my head around how some couples arrange their finances. You have a mortgage together, a baby together and are getting married... yet you don't pool your money? Does your boyfriend know that you are paying interest on some of the credit card debt? Because indirectly that means he is too as for every pound you pay in interest that is a pound that you don't have to do/buy things together (that he probably makes up for)? If he is really money savvy he would accept that and see that a much better way of doing things would be for neither 'team member' to pay any interest.

Maybe you could use the upcoming marriage as a reason to discuss re-evaluating how your family finances work to ensure your money is working for you.

When my wife and i were renting we just split the bills equally - I paid the rent and she paid the utilities etc and put money aside for savings... these balanced themselves out. However, when we bought a place a couple of years ago (where the mortgage payment would be over twice as much as rent used to be!) we used it an an opportunity to re-evaluate. We then opened a joint account and worked out a proportional payment each (I earn slightly more than her) that would cover all bills and savings funds) What is then left in our sole accounts is our own. We also don't carry any balance on credit cards so there is never any interest. If there is something big that needs buying it either gets paid for out of savings or a line of new interest free credit may be discussed if it can be paid off before any interest is due.

You're in this together now so work as a team!

Unicorn_cottage

Surely "the money" that comes in from both salaries or benefits of whatever should be used to achieve your goals as a couple? I don't understand the joint account thing where you both put in a similar amount of money then you both individually spend the money that is left over from your wages. Couples should work together as a unit. My partner is in debt and we are both tackling this. I don't just leave her to it and feather my own nest.