Remortgage to pay off credit card debt

anonmortgageposter

I’m looking for some advice. We recently purchased a property which required an extensive renovation. We got the property £40,000 below market value and put a 10% deposit in knowing the very little we had left over would be spent on the renovation along with 0% credit cards, with the idea of remortgaging at the higher value.

The renovation has cost way more than we anticipated, by a long shot. It’s not finished, we have ran out of money and have £56,000 on credit cards.

The plan was to have around £20,000 on credit cards, which we would pay off over 2 years. The fact it’s now at £56,000 and we have another £15,000 left to spend on the house makes it impossible to keep up payments long term. We also just found out my partner is expecting, which means when they are on statutory maternity pay, we absolutely won’t be able to keep up with payments. If we remortgaged and took out the £56k to pay off the cards it would add around £300 per month to the mortgage instead of the £1500 in CC payments.

I work in sales, which means 60% of my income is commission based. 

How easy would it be to remortgage within our fixed term? Is there anyway we can do this without penalties? I think the current penalty as it stands is 5k, however, with my partner being pregnant we need to do this asap.

How would mortgage lenders look at this situation as the debt is huge and looks very irresponsible. Along with our bank account showing wages in and wages out every month.

My next three month wages should be great. However, the last 12 months have been poor due to the stress of the renovation. Would I need to supply 12 months wage slips due to me being commission based?

How quick is the process of remortgaging? Some of the cards are not on 0% which is what has added to the stress.

Any help would be greatly appreciated as I’m feeling overwhelmed and it feels like there isn’t a way out and that a remortgage application would be declined. 

anonmortgageposter

Our equity position currently should be around £115k and we need £56k. 

DE_612183

whats the value of the property?

what was the LTV of the current product you are on?

anonmortgageposter

£243k mortgage. Two identical houses in the street have just went up at offers over 335k. These had not been modernised for a few years inside. Ours is almost fully renovated to a high standard. If we said 360 that would be cautious. 

DE_612183

you may be able to extend borrowing within the existing product - that would mean no fees ( possibly ), but you have to make sure you kept within the existing LTV.

If your mortgage was 243 - what was the value of the property when you bought it?

anonmortgageposter

We Earn around 75k combined. 35k of this is commission based, paid monthly. 

Debt currently excluding CC…

Loan payments - £340 p/m
Student loan - 55k wage ( £6k left on this ) 

anonmortgageposter

270k purchase price. 27k deposit. 

DE_612183

So, LTV of 10%.

So you'd be within that.

I'd ask the current lender if you can extend borrowing using existing product.

They will sometimes leave the existing product as is, and you have additional borrowing alongside - may mean you also get a better rate.

Is your lender a high street one or specialist because of the type of product you needed?

DE_612183

Where you will fall down is on the question - "do you know of any circumstances that will change your financial position in the future?"

up to you how you answer that...

Sly72

You are moving non secured debt to secured debt, which if you fail to meet payments on secured debt you could loose your house.

non secured debt can be covered by other means see this Forum: Debt-free wannabe — MoneySavingExpert Forum

born_again

Not so much re mortgaging as further borrowing.

I would go via a broker who will know companies more willing than others to take this on. As some mainstream may just simply say no.
Will require the cards to be shut down, or should do.