Remortgage to pay debt

lsy2042

I know it’s advised against but I’ve decided the best way to tackle my unsecured credit card debt is to borrow more on my mortgage. No judgement please as this is going to be the best thing for my mental health and will still have 30% ltv in my property one done.

current mortgage is with first direct. My question is, when doing mortgage affordability will they take into consideration my current minimum credit card payments, as obviously these won’t be an issue anymore once I’ve paid them off using the money borrowed?
if they do take them into consideration, e what sort of slack are they looking at in my affordability? I know first direct are very strict, is it better to go to another lender/broker and remortgage the lot?

I’ve tackled the issues that caused me to get into debt in the first place, started a new job and looked at where I was overspending so this is for a completely fresh start.

Brie

what they will look at is can you afford the bigger mortgage PLUS all the CC debt.  They have no way of knowing whether you will use the extra cash to pay the CCs off or spend it on a luxury cruise.  

what might convince them is if you provide a comprehensive budget that shows you could afford it all but obviously have worked everything out so that you won't be having a problem going forward.

fatbelly

I'm not being judgemental. Just pointing out that it's moving debt, not tackling it.

You will be increasing your monthly payment of priority secured debt. You can default on non-priority debt payment without much happening but if you default on priority debt payment you stand to lose the property.

If you need to take advantage of the government safety net (SMI), full of holes though it may be, they will not support any element of the mortgage used for debt consolidation.

The general advice is to remortgage the present balance, get maybe a 5-year fix, then address the cards by one of the usual debt strategies

Brie's answer on affordability is correct

robinwales

I am not at all being judgemental here, just trying to help. If you have fully addressed the issues that caused your problem initially then you can safely do what you suggest as you will no longer overspend. Your question was about the difficulty in convincing lenders but the real question is has the problem been fixed. If it has then in your shoes I would probably refinance on the mortgage. If it hasn't been fixed than re-mortgaging might lead to some significant future problems. There's also a cost in this. Paying off loans and cards doesn't cost extra money in fees etc, but re-mortgaging does.