Dmp reset

Mj17

Hi been  a member for a while not posted in years currently in debt management plan with Step Change for three years  debts down to 54,000ish. 

Ha I got to reduce hours at work due to lol health. Have struggled with long term conditions for 6 years s s now feel can’t carry on with poor quality of life working full time brings. 

We have significant equity in house. Wonder if best to remortgage to clear stunts. I’m on a good salary and husband works also. Therefore debt repayment with step change currently 1500 month. 

If we remortgage this and mortgage payment will be 1200 with option to over pay. I know long term pay more but current financial situation would be better

At present DMP won’t allow overpayment it full and final option. 

Thoughts please 

fatbelly

I wouldn't. I know it seems tempting but you're using secured borrowing to pay unsecured, and that is a lot to add to a mortgage even if you get some settlement discounts. 

Your house is safe. great. Keep it that way.

In the short term you should talk to stepchange about your new situation and get them to reduce your monthly payment to something affordable.

Moving forward, have you checked that your lenders can provide a CCA for their debt?

Suseka97

Its a definite NO to the debt consolidation idea.  It really is never a good idea to turn unsecured debt into secured debt against your home.  I can appreciate it sounds tempting, but its not the way forward.

Do as fatbelly advises and speak to SC about your reduction in hours and the need to adjust your DMP payment to something more affordable.  If you consider, dropping your hours and thus income will have an impact on what your mortgage lender would be prepared to offer, regardless of the amount of equity.

Mj17

Thanks for replies. Our equity is 1000k. I’m a high band nurse/manager so even with reduction my wage is substantial but hubbies isn’t.  My worry is mortgage is covered by life insurance and my pension if god forbid worse case scenario happens. (Had couple close calls with heart and mum passed at early age with same condition). If debt is left unsecured could they make him sell house to cover debts

Mj17

Sorry meant to add other option was to self manage dmp so I can resist !!!!!! and overpay smaller debts to clear abs snowball 

EssexHebridean

No - but if you combine the debt into the mortgage and then something else untoward happens so that you can’t meet payments you’re risking it having to be sold. Seriously, don’t do it. 

Suseka97

You are overthinking this, in worrying about the 'what might happen if...'

Going self-managed is perfectly doable and just takes a bit of planning and organising.  You can set your payments to suit your situation and adjust your I&E accordingly.  You can then incorporate an element of snowballing if that works best for you.