Consolidating debt / adding to mortgage with Halifax

Manchestermrs

So I just tried to get a personal loan with The AA for £17k - it said I had an 80% chance on MSE credit club. They said no! 

I also apparently have a low chance of getting a 0% balance transfer deal according to MSE credit club. 

My husband is going to try getting a loan with Bank of Ireland who were also on the list as us being 80% eligible but it is increasingly looking like we will have to do a second change mortgage. Speaking to the guy at 2pm. 

P.S. As well as the four credit cards I have with a balance, I have about three cards with a zero balance. Should I cancel all of these or will that affect my credit file negatively? Not sure what to do for best? Cheers! 

RelievedSheff

Stop panicking and applying for credit. You will be doing your credit files no favours at all and just making it more difficult to find a solution down the line. 

Manchestermrs

Hi, just to update. We’ve been offered a £35k second charge mortgage with Oplo over 10 years paying £399 per month at 4%. This will enable us to budget properly, even save or overpay every month, plus not be getting to the end of the month and relying on credit cards for food shops etc. What a relief! 

This will save us a huge amount each month and Oplo will pay off all our credit cards so they know we’re not going to use it to go on a spending spree. 

The only downside is the 4.4K fees! But I’ve worked out that I’d be paying around 3k in balance transfers over the 2.5 years we’ve got left until we can remortgage. Plus the early repayment charge with Oplo is only £350 so we can easily remortgage the whole lot in two years (fingers crossed!). 

I feel like this will massively put us on the right track. The fees are high but I feel a price worth paying for what it will give us. 

Thanks everyone for your advice. Fingers crossed it works out! 

K_S

@manchestermrs Glad to hear that you have a solution that you're happy with.

Assuming you consolidate on to your resi mortgage in 2.5 years, that effectively works out to a 9% annual interest rate (assuming I've got my maths right) for those 2.5 years but I imagine that's a lot lower than the rate on your cards.

Manchestermrs

Thanks @K_S ! That sounds about right. Yes we are paying almost 20% interest on four cards so it is less. We will definitely remortgage the total amount in 2.5 years. Thanks for your advice. 

Thrugelmir

Manchestermrs said:

Oplo will pay off all our credit cards so they know we’re not going to use it to go on a spending spree. 

There's nothing to stop you obtaining further lines of credit in the future though. Oplo are covering their backsides. Can be no complaints of bad lender practice further down the line. 

getmore4less

Manchestermrs said:

Hi, just to update. We’ve been offered a £35k second charge mortgage with Oplo over 10 years paying £399 per month at 4%. 
......

The only downside is the 4.4K fees! But I’ve worked out that I’d be paying around 3k in balance transfers over the 2.5 years we’ve got left until we can remortgage. Plus the early repayment charge with Oplo is only £350 so we can easily remortgage the whole lot in two years (fingers crossed!). 

Ouch £4.4k in fees that's 12.6% 

£35k at 4%  over 10years is  £355pm 

£399 is adding the fees to the debt

over 2y equivalent

amount	rate	payment	owing
£39,400.00	4.000%	£399.00	£32,723.62
£35,000.00	10.751%	£399.00	£32,723.90

over 2.5y equivalent

amount	rate	payment	owing
£39,400.00	4.000%	£399.00	£30,969.53
£35,000.00	9.585%	£399.00	£30,969.20