Additional borrowing for debt consolidation.

MEM62

Martin_the_Unjust said:

Taking on more debt to pay off debt is never a good idea.

Exactly this.  You cannot borrow your way out of debt.  And additional borrowing for a wedding is a really bad idea.  It is one day, either cut your cloth to suit your budget or, if you want the big day with all the bells and whistles - save for it.  

Kurtisbaptiste1993

Hi all,

I am looking for some advice on additional borrowing.

We have moved into our new home back in Aug 2022 and our mortgage provider is Halifax. 
A lot of spending has occurred due to renovations and other family costs.
We want to look at options for additional borrowing for debt consolidation and maybe some extra cash for home improvements.

The total amount ideally wanting to borrow is £40k
We have £35k in debts (Loan, credit cards and mail orders)

We brought our house for £500k with £280k deposit. (at the time we had no debts and my partner was working)
We have a mortgage balance of £217k 

My partner is currently unemployed but with some income on her side, our total combined income is around £55k

At this current time I am paying around £750 on a un-secured loan with Halifax + other credit cards and mail orders, I am ideally looking for monthly payments on a new loan at around £300-£400.
We are not behind on any payments are we are paying bills comfortably and on time, I would like to try and lower the monthly payments on my debts a month by looking at a new secured/second mortgage.

Due to the current high interest rates I am finding it difficult to find anything suitable.

Is there anyone in the same situation or anyone able to offer any advice?

Thanks
Kurtis

Grumpelstiltskin

Original thread.

Additional borrowing for debt consolidation. — MoneySavingExpert Forum

Do you think you are going to get different answers by starting a new thread?

You have been told no chance.

Ryan_Holden

Hello again. You know you can edit your original post as you have done, so I'm a bit miffed at why you've started a new topic.

You were paying £511 before, is the new figure of £750 because you're paying down debt or was the £511 just incorrect before?

Regardless, I don't understand why you think the answer will be different, or the advice. Update your SOA and see for yourself.

If anything, your affordability with £750 a month repayments (plus the undisclosed credit card payment) is worse than the original topic with £511.

Do you want some help from us regarding targeting how to reduce the debt without borrowing? You could show up what debt you have, with what interest, and where and we could work together to try and come up with some pointers.

pjcox2005

I'd go slightly different, and say you need to have a clear look at your finances and see why the debt is arising.

If you have an income say of £4k a month, your normal living expenditure (including budgeting for the annual stuff) is £3k, and you're increasing debt due to home improvements and/or interest payments, then I'd be inclined to ask the bank to extend the mortgage for home improvements particularly if current debt is on high interest cards/loans. They may not accept given income levels though but you do have a lot of equity in the house and presumably you know how hard or easy it was to borrow in Aug 22.

If on the other hand you're over spending your income on normal living expenses (and wedding mentioned in other thread) then I wouldn't go anywhere near consolidation loans. Until you sorted the amount of money leaking out and have a clear plan on income and expenditure, then a consolidation loan is just going to make things worst until the inevitable happens and you can no longer keep up with the debt.

You need to be really honest with yourself, have a very detailed income and expenditure sheet, a cap on how much you can spend on the property and a plan as to how it will all be cleared. I'd also be cutting back on normal expenditure (e.g. hols, meals out) if the house improvements is your focus and what you want.

Good luck.

Herzlos

They are already on the upper bounds of mortgage borrowing (3.95x salary), and got a mortgage just before the rates went bonkers, so there's a good chance they'd be refused a straight remortgage at the current figures before even trying to extend the borrowing.

The only way out of this one is to stop spending money, clear some of the debt down and then try to refinance in a few years.

Ryan_Holden

It would be nice to get some acknowledgement from the OP about his/her position on the advice offered.

DCFC79

Advice wont change, your wanting to borrow an amount more than your debts, this isnt good, I dont see how you would approved for it anyway.

Dobbibill

Welcome to the forum,

Read this thread - this poster also wanted to consolidate but took the advice of others on this forum. This was several years ago so you can see how the journey unfolded.
https://forums.moneysavingexpert.com/discussion/5567669/unsure-whether-to-consolidate-please-advise/p1