Advice needed on how to proceed

Moorhoj

Last year, I was diagnosed with breast cancer. I was on long term sick for a year & during this time our finances have suffered greatly. I am now well & back to full time work. As a couple we earn just over £80k but have lived on credit cards for the past 12 months. On top of that, over 10 years ago, we took out a second mortgage on our home & are paying an interest rate of 9.88% on c£55k. We have a mortgage of c£105k and the credit cards & overdrafts total c£30k.
I think the way forward is to remortgage (property worth c£375k) but am worried about applying as I think our credit rating will be impacted by the credit card debt.
What would be the best way to approach this please?

Willing2Learn

I think you should post your Statement of Affairs (SOA). This will let us see your exact financial circumstances as it lists your monthly income, monthly expenses, assets and debts. With your combined income, starting a debt snowball rolling could be the way forward.
https://www.lemonfool.co.uk/financecalculators/soa.php

fatbelly

Generally it's not a good idea to move non-priority debt to priority debt. A SoA will be useful

TryingAgain2022

I'm glad you're well. Have you compared how quickly and how cheaply you could pay off the cards now you're back at work, versus paying it off on the mortgage? To my simplistic mind, 25+years of interest is worse than, say 5 years-?

Good regular payments on your cards might positively help with credit rating etc as well giving you more options when life has settled down again-?

I'm no expert but I'd be reluctant to put living costs that you've had to use cards for, onto mortgage.

-taff

If you are still earning the amount you were earning before, i.e. if your combined income is 80k, perhaps it's time to rethink your financial shared goals.
You say you both lived off credit cards, which means there were no savings to fall back on.

You're thinking in terms off, well, we owe this money, how do we pay it off as fast as possible so it's not hanging over our heads'. You're not thinking, well, if I add this to the mortgage, it'll be not hanging over our heads any more, however, we'll be paying it for a lot longer, and paying more interest on it so we will be paying back more'. This may sound harsh and as if I'm having a go, but it's to try to get you to realise on 80k combined you both should have had excellent savings, or at least some savings, in an emergency fund, ready for an emergency.



Post an SOA to begin with, and have a think about how best might your joint finances be viewed and used going forward...