Secured loan advise needed

[Deleted User]

I currently have a lot of debt around 40k on a combination of loans and credit cards. I’d like to consolidate my debt into one payment but don’t know if a secured loan is an option or in fact a good idea? 

I have around 65k equity in my house and earn 55k pa. 
I have never missed any payment of any kind and have a good credit history. I’d like to be able to pay off as much as I can as soon as I can. Can someone give me any advice or pros / cons of doing this 

thank you 

[Deleted User]

Turning unsecured debt into secured is generally a dreadful idea.

Drop by the DFW boards for help on the tackling the debt from all angles.

Grumpy_chap

Also, what is the value of the house?  £65k equity is entirely different on £100k property versus £1m property.

DCFC79

I agree with the previous comments, are you aware what is involved with a secured loan eg the risks involved ?

Its not a route I would go down, look at your spending and cut back (you can get advise over on the debt free wannabe boards)

[Deleted User]

My house is valued at 200k (March 2020 valuation) and I owe c125k so I actually have c75k equity. 

How about selling my house, rent for a while pay off my debts and then save to get another mortgage. 

I literally know nothing about secured lending other than the debt is secured against your property

fatbelly

Go over to the debt free wannabe forum and post a statement of affairs

https://www.lemonfool.co.uk/financecalculators/soa.php

There's a thread running of someone  who did what you are suggesting, circumstances changed,  and she is now facing losing her house by a forced repossession.

Your aim is to (1) get rid of the non-priority debt while (2) maintaining your equity. Consolidation doesn't do either of those.

[Deleted User]

You're looking at drastic options.

Start with the easy way - cutting costs and repaying what you have.  Post up a SoA on the DFW boards.

Shakin_Steve

I wouldn't sell my house, BUT, I'd sell my house before I took a secured loan on it. At least that way I'd get to keep the equity in cash, rather than watching it disappear in interest payments.

DCFC79

Loubel10 said:

My house is valued at 200k (March 2020 valuation) and I owe c125k so I actually have c75k equity. 

How about selling my house, rent for a while pay off my debts and then save to get another mortgage. 

I literally know nothing about secured lending other than the debt is secured against your property

If your income is reduced then your home is at risk.

As mentioned the easiest option is to look at your spending and cut back, yes selling the house is an option but its a bit like taking a hamer to crack a nut.

MalMonroe

Loubel10 said:

My house is valued at 200k (March 2020 valuation) and I owe c125k so I actually have c75k equity. 

How about selling my house, rent for a while pay off my debts and then save to get another mortgage. 

I literally know nothing about secured lending other than the debt is secured against your property

I'm having difficulty believing this is a genuine post. You seem to have a very cavalier attitude towards money and housing. 

Having done what you are suggesting, that is sell my house, rent with the intention of buying in the future, I can tell you that it is virtually impossible to get yourself back onto the housing ladder once you've stepped off it. I'm still renting 10 years later and house prices have risen greatly since I sold my property. Worst thing I ever did.

You don't really have that vague equity of £75k because not only do you still owe on the house, which means it isn't yours yet, you don't know how much you will get for it, no matter how much it may be valued at, especially now during coronavirus, which is a very bad time to sell. A recession is looming. In fact, it's started. 

Can you get a remortgage? I feel that would be the best option here. But I'd also advise you to get learning about how finances work, especially if you are a homeowner!

MinuteNoodles

MalMonroe said:

I'm having difficulty believing this is a genuine post.

I'm not. It was a regular response and instant solution people would jump to when in financial difficulty in the 2000s when people were borrowing 125% of what their houses were worth and getting into mountains of debt because lenders didn't care whether you could afford it or not but were living in houses which had doubled or tripled in value since they'd bought them several years earlier.