Additional borrowing for debt reconciliation

MrsP2008

Any tips or experiences 
We have £500k house with £116 mortgage that renews rate due jan 2026.
We have incurred debts to approx £40k plus we'd like home improvement £15k.

We're treading water with high cc interest rates no missed payments fair credit rating etc just maxed on credit so this additional borrowing would massively help. How hard is it and we'd clear all debt with the money is this a possibility to get the additional money. We'd look to apply this month. House hold income approx £55k 

fatbelly

So you are struggling to service 40k of nonpriority debt and are thinking of securing it against your property.

This does not sound like a good idea.

Run it past the good folk on the Debt free Wannabe board

ACG

fatbelly said:

So you are struggling to service 40k of nonpriority debt and are thinking of securing it against your property.

This does not sound like a good idea.

Run it past the good folk on the Debt free Wannabe board

People say this, but you are basically changing debt where you pay around 3% of the balance a month with interest rates of maybe 15-20% to one where the repayments are much lower with interest rates of maybe 5%. 

It might cost more in the long run (it might not), but the repayments each month are lower. 

It becomes a bad thing if you consolidate and then run up the debt again or you ran up the debt on "stuff". 

It could be a good or bad thing, but with so little information it is impossible to say. 

Also just to note, I am not saying this as I am a broker and do this. We are really strict on debt consolidation and turn more away than we actually do. But the devil is in the detail. 

MrsP2008 said:

Any tips or experiences 
We have £500k house with £116 mortgage that renews rate due jan 2026.
We have incurred debts to approx £40k plus we'd like home improvement £15k.

We're treading water with high cc interest rates no missed payments fair credit rating etc just maxed on credit so this additional borrowing would massively help. How hard is it and we'd clear all debt with the money is this a possibility to get the additional money. We'd look to apply this month. House hold income approx £55k 

It can be done. It wont be for every lender and probably less options if maxed out. Speak to a broker. They can guide you through the options and point you in the right direction if the debt is "a problem" as fatbelly infers. 

Petriix

I echo the idea that this could be a good idea... If you have your spending in order. If you do it right then you will save a significant amount of money but (and this is the crucial step) you need to put every penny you save in short term interest towards paying off the debt as fast as possible. If you have a realistic plan for doing this then it should be fine. Whether you meet affordability on that borrowing is a question for a mortgage broker. 

Archerychick

MrsP2008 said:

Any tips or experiences 
We have £500k house with £116 mortgage that renews rate due jan 2026.
We have incurred debts to approx £40k plus we'd like home improvement £15k.

We're treading water with high cc interest rates no missed payments fair credit rating etc just maxed on credit so this additional borrowing would massively help. How hard is it and we'd clear all debt with the money is this a possibility to get the additional money. We'd look to apply this month. House hold income approx £55k 

Something to think about if you haven’t already is whether you plan to cancel those cards or alter your expenditure to prevent further build up of debt. This is one of the dangers with consolidation, but if you have that in hand, it could be a sensible move if you’re paying credit card interest rates on that £40k, although it will take you a lot longer to pay that off.