Deep in trouble, looking into releasing equity on mortgage?

in Debt-free wannabe
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lixhullixhul Forumite
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Hi all, long story short, I am a recovering gambling addict (Sports and crypto). I have, in the past year alone, lost over £30,000, destroying my savings and turning me to loans. I have borrowed loans worth £24,000 and I have a few months of money left before I have absolutely no cash left.

I have requested a pay rise from work of 30%, I am a good valued worker. They are "looking into it" (3 weeks now).

I have 2 months left before I can no longer pay my loans or other bills. I have heard about releasing equity from my house. I have about £50K of equity. I need £20,000, but I have absolutely no idea if this is the best thing to do, how to do it, or if it's even a thing.

Any help is much appreciated, I am almost done and can't seem to improve my position. Thank you.

Replies

  • It depends if you have sufficient equity and if the lender allows you to borrow more.

    However, it's a terrible idea to secure your loans on your home. You'd be better off defaulting on your loans and repaying at an easier rate.
  • edited 6 May 2022 at 5:46PM
    sourcratessourcrates Forumite
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    edited 6 May 2022 at 5:46PM
    Equity release is not a good or recommended way to deal with debt issues, as you would be turning non priority debt, into priority debt, which in most scenario's isn`t a good idea, you also have to be 55 or over to release equity from your home.

    If your that close to running out of money, then I suggest you stop paying your non essential debts straight away.

    Get in touch with one of the debt charities and look at debt management options, and please get help with the gambling, as a matter of urgency.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • fatbellyfatbelly Forumite
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    As above, leave the unsecured loans where they are, as non-priority debts.

    There are plenty of options for you as things stand - talk to one of the charities in sourcrates' signature and get some support with the gambling issue.
  • CheesephetamineCheesephetamine Forumite
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    Definitely look into other options first and specially get help for your gambling. Coming from a person with spending issues too you want to fix that otherwise you will incur debt again in the future :(
    TOTAL DEBT JUNE 2019: £38,233.87 Aiming debt free mid 2023
  • edited 6 May 2022 at 8:16PM
    lixhullixhul Forumite
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    edited 6 May 2022 at 8:16PM
    Okay thank you.

    I mostly finished a step change application before changing my mind. But won't that destroy my credit rating? My mortgage rate ends in 3 years and I am worried about getting a new one down the line, especially with % rates.

    I won't go thr mortgage route then. I am waiting on this pay increase which will balance the books... If it's coming.

    The gambling has gone (always does when you lose everything), but now I need to survive.

    So is step change the best way forward? What about just cancelling the DD on the loans? I bought my house in 2019 (new build) and my priority over everything is to bit lose that.
  • edited 6 May 2022 at 9:12PM
    SusieTSusieT Forumite
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    edited 6 May 2022 at 9:12PM
    When the fixed rate on your mortgage comes to n end, you should be able to do a product switch (stay with the same provider, just switch to a different rate and fixed term), if you have paid it on time each month they do not (normally) credit check you. 
    I would advise you to go through your expenditure very carefully, and get as accurate a budget as you can live on in reality and then get in touch with Stepchange or one of the other free charities. 
    Credit card debt - NIL
    Home improvement secured loans 30,130/41,000 and 23,156/28,000 End 2027 and 2029
    Mortgage 64,513/100,000 End Nov 2035
    2022 all rolling into new mortgage + extra to finish house. 125,000 End 2036
  • SncjwSncjw Forumite
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    What about psoting a statement of affairs 
  • lixhullixhul Forumite
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    Sncjw said:
    What about psoting a statement of affairs 
    Good idea, will do so. Thank you. I'm swaying heavily towards step change.
  • MalMonroeMalMonroe Forumite
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    lixhul said:
    Okay thank you.

    I mostly finished a step change application before changing my mind. But won't that destroy my credit rating? My mortgage rate ends in 3 years and I am worried about getting a new one down the line, especially with % rates.

    I won't go thr mortgage route then. I am waiting on this pay increase which will balance the books... If it's coming.

    The gambling has gone (always does when you lose everything), but now I need to survive.

    So is step change the best way forward? What about just cancelling the DD on the loans? I bought my house in 2019 (new build) and my priority over everything is to bit lose that.
    Hi, I hate to tell you that gambling doesn't just 'go' because it's an addiction, and it's a real and recognised illness. You can ask for help via the NHS, when you're ready to do so of course. 

    https://www.nhs.uk/live-well/addiction-support/gambling-addiction/

    You are in deep trouble and yes, your credit reports will be damaged in the short term, if and when you try to rectify your financial situation but that's not important in the long term and if you can get out of trouble, it's worth it to weather the storm.

    Why don't you phone someone at StepChange, they will talk you through the whole thing and then you can decide what is the best course of action for you. 

    https://www.stepchange.org/

    They will help you. I say this because I know and I credit them with helping me to turn my life around. Nine years ago I thought my life was over and I was in terrible debt.. For me they recommended a DRO and I thought that was a terrible and drastic thing to do - which you aren't eligible for since you own (or will) your own home. However, it really was the best thing.

    Stepchange are experts at this kind of thing. If you look at the end of sourcrates' comment above, it lists three free debt help agencies to contact. One free phone call though - and you can either take their advice or not. But it's worth a try, don't you think?
    From the Forum Rules : "it is up to you to investigate, check and check again before you make any decisions or take any action based on information you glean from our community. Remember, don't rely on what you are reading. Verify it and protect yourself. You are responsible for any action you consequently take. Always be friendly, kind and respectful." Bullying/harassment not tolerated.
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