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Personal Situation Help! Credit cards and loans and mortgages!

Hi,
I've a unique situation caused mainly by building work overspend!
We bought a house for 630k with mortgage of 500k. 
We have since put building work of 80k into the property. The plan was to fund this by pulling money out of the house, which was valued at 700k soon after and a buy to let property we have.

With overspend and buy to let valuation coming in a lot less than my negative expectation we've completed the work with a loan and credit cards.

Situation I now have is a 10k loan and 30k on credit cards (all moved to interest free) but a property worth 800k on a 540k mortgage. I was planning on simply pulling money out of the house to pay the short term debt off.

Problem is I'm failing the HSBC extra borrowing test due to the credit card debt monthly costs being reviewed at a higher rate than I actually pay!

What options do I have to pay this 40k debt off with a credit rating of average (caused by too much short term borrowing - not missed payment or anything like that).

Let's just say this has been a learning experience!

Appreciate any input

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 17 January 2022 pm31 12:47PM
    Start making as large an overpayment as possible to the balance that will incur interest first.

    Cut your costs till it hurts and throw all that spare cash at the debt.
  • Thanks. With this debt being short term the monthly minimum payments are already taking me to the limit. I expected the remortgage to be very simple. Situation will change in the next 12 months but I'm looking to reduce my monthly outgoings (understand extra debt costs of adding to mortgage, etc...)
  • MallyGirl
    MallyGirl Posts: 7,091 Senior Ambassador
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    There really isn't a way other than having a very lean year - you have qualified for a £500k mortgage so you must be earning a decent amount. HSBC have to view the debt at normal APR as it would be irresponsible of them to assume you are going to pay it all off before the 0% runs out. Throw everything at the debt and clear some so that at least you might be able to get another 0% deal when the current one(s) end
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
    All views are my own and not the official line of MoneySavingExpert.
  • As above, if you can’t easily access a normal mortgage then the next best route is to cut your spending back until the debt is more manageable.

    You are proposing changing interest-free unsecured borrowing for interest-bearing secured borrowing, which is rarely a good idea.

    Why not enjoy your newly improved house, use this as an opportunity to properly evaluate your budget, and then have another look at your options towards the end of the year?
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