Remortgage to pay off credit card debt

anonmortgageposter

I should add, my next 3 months wage slips should show a total income of 20k. My plan is to get these 3 in and then attempt it then.

Im not sure how this would be viewed due to it being commission based.

Grumpelstiltskin

Surely if you have £20K coming in over the next 3 months you should be able to pay a good chunk of that off the credit cards?

anonmortgageposter

Yes, I will. However, that doesn’t help the long term situation. 20k is before tax and with my partner going on statutory maternity, I won’t have enough left each month to make the minimum payments. 

kimwp

Sly72 said:

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

Another vote for popping over to the debt free board. It's not a good idea to convert unsecured debt to secured debt as you'll increase the risk of losing your house.

PRAISETHESUN

Sly72 said:

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

This was my thought as well - I think it's a bad idea to secure CC debt against your home!

MWT

anonmortgageposter said:

£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. 

Keep in mind the lender is going to value it based on how it is now, mid-renovation, not how it will be when it is finished.

Also it needs to meet their standards for a mortgageable property, so functional kitchen, bathroom etc. so hopefully these are not compromised by your current state of work?

You need actual local completed sales, not asking prices, and an incomplete renovation isn't likely to attract a valuation significantly above the asking price for other local property, so be prepared for a lower valuation than you are hoping for. 

As with the other comments I really would go visit the debt-free board before diving down this particular rabbit-hole...

anonmortgageposter

Hi Guys,

I appreciate the advice. The reason for remortgaging is to bring down the monthly repayments. Especially when down to one income.

A 56k Loan wouldn’t be approved I would imagine. The other thought process is once we have remortgaged and got the money to clear. We would then overpay the mortgage back over time. 

In regards to the renovation. It is 95% complete and I would imagine once done we could achieve 385-400k comparing it to other SOLD prices.

Taking the 56k out would still leave us in a position where we have a house renovated to our design and standard for 300k when we put in £27k originally that is worth 400k. I understand the cost of 56k will be massive over time, however, it steadies the he ship in the short term.

It’s more the effect it’s having on our relationship and both of us mentally at the present time.

I really appreciate the advice, please keep the comments coming if you can think of a specific better way.

kimwp

anonmortgageposter said:

Hi Guys,

I appreciate the advice. The reason for remortgaging is to bring down the monthly repayments. Especially when down to one income.

A 56k Loan wouldn’t be approved I would imagine. The other thought process is once we have remortgaged and got the money to clear. We would then overpay the mortgage back over time. 

In regards to the renovation. It is 95% complete and I would imagine once done we could achieve 385-400k comparing it to other SOLD prices.

Taking the 56k out would still leave us in a position where we have a house renovated to our design and standard for 300k when we put in £27k originally that is worth 400k. I understand the cost of 56k will be massive over time, however, it steadies the he ship in the short term.

It’s more the effect it’s having on our relationship and both of us mentally at the present time.

I really appreciate the advice, please keep the comments coming if you can think of a specific better way.

Fyi, the debt free board approach is to cut back on spending until payments are achievable while still affording the essentials. If that's not possible, then to default to stop interest being charged and do a debt management plan where you pay what you can afford to your creditors- obviously this makes credit difficult to get for a while. And the general debt free approach is to save before spending rather than be in debt.

If your preference is to increase your monthly mortgage payments, then please do your numbers carefully to ensure you can afford them given the reduced pay during maternity leave and increased household costs of another child (nursery fees etc)

Hoenir

What's left to do to complete the renovation? 

MWT

anonmortgageposter said:

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.

Keep in mind that if you are seeking further borrowing or a new mortgage, you are obliged to disclose to the lender any events you are already aware of that will impact on your current financial position, so not declaring the impending birth and subsequent maternity leave/potential ongoing childcare costs, would not be advisable...