Some advice, please, lovely people...

nick78447

I owe around £39k on credit cards. I've been spinning plates 0% wise for years but that's now pretty much come to an end very recently.

Hence I need to take action.

I own a house worth around £310,000. I owe £92,000 on it over the next 9.5 years.

I earn £25k (I'd earned nothing for a few years, hence the debt, and this will figure will only go up) my wife earns £36k. We have no kids and few outgoings (other than the cc bills and the usual bills).

Do I remortgage with my current mortgage people and add £40k to my mortgage?

Do I get a whole new mortgage?

I've never missed a payment on anything, but would my level of debt put lenders off me? Even though I could remortgage and wipe it out?

I'm all at sea. Can anyone offer me any considered advice, please?

Many thanks.

[Deleted User]

Remortgaging won't wipe out the debt. It just shifts it.

It's generally a bad idea to turn unsecured debt into secured. Visit the DFW boards for advice on cutting costs and paying it down.

muhandis

If your combined income is £61k, the rule of thumb is that you borrow up to around 4.5x, so 274k which is 180k more than your current mortgage and more than enough to pay off your cc debt.

If you go for a remortgage with debt consolidation (ie moving your debt from CC to your mortgage), the current debt should not count against you for affordability as the assumption is that it’ll go down to zero upon completion.

In any case, since you will be increasing borrowing, it will go through a full affordability check but based on what you’ve disclosed about your credit history and the numbers it seems pretty straightforward. I’m not a broker though so might be missing something obvious here!

I would check my remortgage options with a fee free broker to see what options they suggest.

MortgageMamma

Nothing to it. You either want to or you don't.

If you do, you will pay interest on the consolidated debt over the long term and it will cost you much more in the long run.

If that makes you wince and you can afford to steadily chip away at the CC debt then don't do it.

If you feel you have no prospect of realistically paying the CC debt, or its weighing on you mentally and in terms of lifestyle/happiness, then consider doing it.

Its your money at the end of the day and only you (and your wife) can make the decision.

If you want to do it but feel bad about it, you could make overpayments on your mortgage to reduce the debt quicker and thus reduce the long term interest you would have paid. Most mortgages allow you to overpay by 10% of that years loan balance per year, but there are lenders with more generous allowances.

Hope that helps

MM

getmore4less

Before you do anything you need to have a budget and a proper plan to reduce the debt.

Moving it to the mortgage is just another shuffle.

have a read here
https://forums.moneysavingexpert.com/forumdisplay.php?f=76

prepare a SOA
http://www.stoozing.com/calculator/soa.php

Get the people on that board to have a go through it and help with a plan of action that will have you debt free.

looking very roughly at the numbers

net income around £1,700+£2,300= £4kpm


£900 mortgage £92k over 9.5 years @ 2.3%, generous rate should be under 2% with <50% LTV
£1100 outgoings, you say low so this is generous.
£1000 min payment on debt (2.5% of balance)


That leaves £1k per month to reduce the the debt

If you don't have £1k spare each then you need the SOA even more to work out where you money is going.

nick78447

Thanks for all the replies. I've had a quick chat with my current mortgage people and have a few more questions.

It seems I'd be fine to borrow £50k against the value of my home, and at a decent rate. But if I tell them it's to mostly pay off credit card debt, would that change?

I want to be honest. And the thing is, they'll ask me about my outgoings on debt, and it's probably about £900 a month on credit card debt right now, but if they lend me what I want at a decent rate, that will shrink to nothing.

Thrugelmir

nick78447 wrote: »

It seems I'd be fine to borrow £50k against the value of my home, and at a decent rate. But if I tell them it's to mostly pay off credit card debt, would that change?

Little point in trying to hide the fact. As there'll have access to your credit history. If the debt has steadily been increasing then obviously concerns will be heightened.

getmore4less

I owe around £39k on credit cards
....
Do I remortgage with my current mortgage people and add £40k to my mortgage?

It seems I'd be fine to borrow £50k against the value of my home, and at a decent rate. But if I tell them it's to mostly pay off credit card debt, would that change?

What's the other £10/£11k for?

48hrs you have gone from a debt shuffle to taking on 25% more debt.

nick78447

It's for a new car and various home improvements. I'm only planning to remortgage the once so may as well unlock credit at a decent rate if I can.

Thanks all for the replies. I really just need to be upfront about it, I suppose.

getmore4less

Let's hope you keep the jobs this time.

Sea_Shell

So while you're borrowing extra against your house, you might as well borrow MORE while you're at it!!! Is that what you're saying?

I thought the idea was to reduce debt not increase it.