Debt consolidation - remortgage advice?

MFWannabe

I’m not sure OP will be back as not been on since Thursday 
Hopefully they will and take up on some of the very good advice given 🤞

stressedette

@MFWannabe I am still here! Just a lot to take in and consider. 

@Martico - that actually made me feel a lot better, so thank you particularly - and I do appreciate everyone's advice on this thread. 

Re: some of the comments on Christmas spend, I'll be due an extra £400 from additional 'marking' type work I do as an extra (every 3 months) early December, so will be able to budget presents from that and we are generally with wider family all agreeing to cut back. Small child is only a tot so doesn't fully understand what's going on, so I won't have to spend lots to make it special! And he'll be spoiled by wider family too. 

We do need to move house in the medium term anyway - our house isn't big enough for our family at present, and is in a fairly poor area for schools, so was always the intention to try to move late next year / early 2025. I did speak to a mortgage advisor this week, who was actually really helpful - similar comments to some on here, who said I'm probably freaking out a bit too early, as if I can get through the next couple of months things should get a bit easier to manage with the loans disappearing. Also said if I can reduce the cc debt, it would likely still be feasible to move without necessarily having to pay everything off in advance, given my salary coupled with DP's - as long as what's left is declared and manageable in terms of any new mortgage / payments. So I feel better about future prospects. 

I'm hoping that when the loans are gone and I can hopefully get rid of Aqua and Capital One, it may free things up a bit in terms of opening up the possibility of shifting some of the rest to a 0% to try to pay down quicker?

stressedette

Mortgage wise if I revert to SMR I'd be about £620/month from £340.

I could take out a 2 year fix from April, which would make it £490. But there's a 2-3% ERC if we did then look to move... so not sure if it's worthwhile or not or will just end up costing us more...

MFWannabe

stressedette said:

@MFWannabe I am still here! Just a lot to take in and consider. 

@Martico - that actually made me feel a lot better, so thank you particularly - and I do appreciate everyone's advice on this thread. 

Re: some of the comments on Christmas spend, I'll be due an extra £400 from additional 'marking' type work I do as an extra (every 3 months) early December, so will be able to budget presents from that and we are generally with wider family all agreeing to cut back. Small child is only a tot so doesn't fully understand what's going on, so I won't have to spend lots to make it special! And he'll be spoiled by wider family too. 

We do need to move house in the medium term anyway - our house isn't big enough for our family at present, and is in a fairly poor area for schools, so was always the intention to try to move late next year / early 2025. I did speak to a mortgage advisor this week, who was actually really helpful - similar comments to some on here, who said I'm probably freaking out a bit too early, as if I can get through the next couple of months things should get a bit easier to manage with the loans disappearing. Also said if I can reduce the cc debt, it would likely still be feasible to move without necessarily having to pay everything off in advance, given my salary coupled with DP's - as long as what's left is declared and manageable in terms of any new mortgage / payments. So I feel better about future prospects. 

I'm hoping that when the loans are gone and I can hopefully get rid of Aqua and Capital One, it may free things up a bit in terms of opening up the possibility of shifting some of the rest to a 0% to try to pay down quicker?

Sounds like you’ve read through and taken everything in and feel better about things? X 
🤞you’ll be able to transfer to 0% deals when the loans have gone which will help towards paying off the debt quicker 

MFWannabe

stressedette said:

Mortgage wise if I revert to SMR I'd be about £620/month from £340.

I could take out a 2 year fix from April, which would make it £490. But there's a 2-3% ERC if we did then look to move... so not sure if it's worthwhile or not or will just end up costing us more...

Is it an option to port your current mortgage if you did take out another fix? 

The downside to that of course is you end up with two products with different end dates 

stressedette

So, just as an update. Now that I've got to the end of my loan agreements! I've been offered a new 11% unsecured loan over 5 years, which clears all outstanding debts including overdraft.

I think this, (coupled with immediately closing all other credit accounts!!) would be a good solution, provided I am very strong on not then applying for further credit.

Given my salary now is far higher than when I first racked up debt through my twenties, and given I've also been used to servicing circa £1300 monthly debt repayments, I should be able to save now as well as pay this off, rather than rack up additional debt. And it's mentally much easier with one repayment at what I think is a reasonable interest rate in comparison to some of the credit / storecard rates. 

So - generally feeling much lighter, but wanted to come on here in order to keep myself accountable on the 'not allowing consolidation to make things worse' path - will update. Thanks again for all the advice. 

sourcrates

Each to their own, but most consolidation loans fail in their purpose, and only exacerbate the situation, they seldom provide relief from it.

We have posters on these boards who consolidated numerous times before actually taking the right corrective action.

I would advise against it, but it appears your mind is set, so I wish you luck.

Martico

stressedette said:

So, just as an update. Now that I've got to the end of my loan agreements! I've been offered a new 11% unsecured loan over 5 years, which clears all outstanding debts including overdraft.

And to add to Sourcrates's post, if you go ahead with this please change your mindset from "clears debts" to "moves debts" 

backinbusiness

stressedette said:

So, just as an update. Now that I've got to the end of my loan agreements! I've been offered a new 11% unsecured loan over 5 years, which clears all outstanding debts including overdraft.

I think this, (coupled with immediately closing all other credit accounts!!) would be a good solution, provided I am very strong on not then applying for further credit.

Given my salary now is far higher than when I first racked up debt through my twenties, and given I've also been used to servicing circa £1300 monthly debt repayments, I should be able to save now as well as pay this off, rather than rack up additional debt. And it's mentally much easier with one repayment at what I think is a reasonable interest rate in comparison to some of the credit / storecard rates. 

So - generally feeling much lighter, but wanted to come on here in order to keep myself accountable on the 'not allowing consolidation to make things worse' path - will update. Thanks again for all the advice. 

Oh @stressedette it doesn't clear all outstanding debts - if moves them and keeps them going for a further 5 years . . . and 11% is not a great rate either.

If you haven't already proceeded on this basis, then please, please think again.

If this very expensive loan is the route you chose, I really, really hope that you have the discipline - fingers crossed for you.  BiB x 

MFWannabe

stressedette said:

So, just as an update. Now that I've got to the end of my loan agreements! I've been offered a new 11% unsecured loan over 5 years, which clears all outstanding debts including overdraft.

I think this, (coupled with immediately closing all other credit accounts!!) would be a good solution, provided I am very strong on not then applying for further credit.

Given my salary now is far higher than when I first racked up debt through my twenties, and given I've also been used to servicing circa £1300 monthly debt repayments, I should be able to save now as well as pay this off, rather than rack up additional debt. And it's mentally much easier with one repayment at what I think is a reasonable interest rate in comparison to some of the credit / storecard rates. 

So - generally feeling much lighter, but wanted to come on here in order to keep myself accountable on the 'not allowing consolidation to make things worse' path - will update. Thanks again for all the advice. 

Firstly well done for not going down the remortgage route 
Secondly for coming back and updating 
Thirdly for paying off the loans 

I guess you have already taken out the loan? Are you able to make overpayments to cut the payment term and also reduce interest? 

Please ensure you don’t take out any more credit, hopefully you’ve closed credit card accounts etc 
You may want to consider starting a diary on the diaries thread to help you keep on track of paying off the debts and also to get some support along the way