In debt - how best to pay off credit cards and what to do re mortgage port

MattMattMattUK

startingover2025 said:

@ essexhebridean - we have no money left at the end of every month; the surplus is always swallowed up by necessities like hair cuts, clothes, shoes, dentist... it never stretches to anything bigger, which is why we always end up asking for parental help (NOT a situation I want to be in). I'm wary of applying for 0% cards as I think I'll be turned down and if we are trying for a mortgage port then I don't want to have too many credit checks on file.

You may well be declined, checks on the file at this point matter little though as you are not going to be taking out more credit.

startingover2025 said:

@ MattMattMattUK yes we are definitely using the cheapest way to travel. Once the football ends we will be around £150 a month better off.

They still seem very high, I think you should double check these against a year's statements, 24k miles a year is nearly four times the average. 

startingover2025 said:

I know there are huge expenses incurred by moving, but I am worried about taking out DMPs. 
As for my stepfather's £20,000 loan, I have it - but I haven't used it yet as this does rule out staying in our house.

The expense of moving would likely exceed that £20k loan from your stepfather, so on that basis alone it becomes an almost pointless exercise, due to the inability to port, ERC and rate increases it will probably be more expensive to move than to stay put. 

startingover2025 said:

I feel it might be better to move and wipe out all the debt, give us a clean slate and reduce the mortgage at the same time, than to stay in our house and do a DMP. But I might be wrong here.

I think you are almost certainly wrong and I suspect making an emotional judgement because the debt feels horrible, where as you can actually continue living in your current home, go through a DMP and the debt will be gone. You really do need to address the issue of living beyond your means though or it will come back to bite you. If you address everything then you should be in a good place to manage the likely small increase in mortgage rates in 2027 and you will be on a permanent sustainable footing.

Edit to add: You will need to declare the loan from your stepfather when porting or applying for a new mortgage, the lender will proportionally reduce your borrowing ability because of this loan, failure to mention this when applying would not be advisable. 

Hoenir

startingover2025 said:

We applied to port our mortgage in December and move to a cheaper house in order to pay off the second charge and credit cards, and start building up some savings, but we were turned down. This was on the grounds that while our mortgage would remain the same at 330,000 (we would pay off the cards and second charge with the profit from the sale), the loan to value would change. They also had concerns over account conduct and flagged the fact that my husband's MBNA card is on a payment plan. 

To get the NatWest onside. You need to present the same plan but with a sizable reduction in the current mortgage balance. Then under "duty of care" far more likely to assist you. Might require  complete rethink of your plans. Making personal sacrifices. As matters stand there's little likelihood of them changing their tune. Onus is on entirely on you. 

startingover2025

Thankyou @Hoenir - would porting to a new property that would reduce the mortgage substantially (potentially by 100,000) fulfil this?

Hoenir

startingover2025 said:

Thankyou @Hoenir - would porting to a new property that would reduce the mortgage substantially (potentially by 100,000) fulfil this?

More than anything you to convince them that is a genuine attempt to rectify the situation. Remember they can see your last 72 months borrowing activity. It's in the past. However you've got to start budgeting properly in full going forward. You've fortunately got the advantage of a reasonable amount of equity. Likewise reducing the mortgage term in the process maybe beneficial. As matters stand you'll be carrying a sizable debt into your retirement years when your income will have reduced. 

EssexHebridean

startingover2025 said:

@essexhebridean - we have no money left at the end of every month; the surplus is always swallowed up by necessities like hair cuts, clothes, shoes, dentist... it never stretches to anything bigger, which is why we always end up asking for parental help (NOT a situation I want to be in). I'm wary of applying for 0% cards as I think I'll be turned down and if we are trying for a mortgage port then I don't want to have too many credit checks on file. @MattMattMattUK yes we are definitely using the cheapest way to travel. Once the football ends we will be around £150 a month better off. I know there are huge expenses incurred by moving, but I am worried about taking out DMPs. I feel it might be better to move and wipe out all the debt, give us a clean slate and reduce the mortgage at the same time, than to stay in our house and do a DMP. But I might be wrong here.
As for my stepfather's £20,000 loan, I have it - but I haven't used it yet as this does rule out staying in our house.

I suspected that was going to be what you were going to say - and that I am afraid goes to prove that currently that SOA isn't accurate. I would strongly suggest that you start a spending diary from now =- just a simple notebook and pen and writing down everything you spend to the last penny. That will help you keep track and get a more accurate budget together. 

Remember that by taking your planned action with downsizing etc - you aren't "wiping your debt" - you are relocating it as it will be swallowed into the new mortgage, in essence.  It's incredibly important that you get to grips with budgeting from the outset now - as if you don't, give it a few years and you will be back in a broadly similar position but with no real option to deal with it in the same way again.  Nobody is saying that the downsizing plan might not be the best for you - it might, but it really needs looking at in minute detail and with a huge amount of seriousness - it's definitely not an easy fix. 

On the 0% cards - I specifically said not to apply - use an eligibility calculator like the one on the MSE Credit Club as this won't leave a mark on your credit file.

ManyWays

startingover2025 said:

Thankyou @Hoenir - would porting to a new property that would reduce the mortgage substantially (potentially by 100,000) fulfil this?

It isnt just the size of the mortgage, its the loan to value. 

And I thought you were planning to clear the secured loan and other debts with some of the equity, what are the numbers for the house you are thinking of buying, it cant be that cheap if its in commuting distance from London? If you can get the mortgage down a lot, then makes the jump at the end of the fix less painful

This is going to sound like a lot of work, but you really need 2 SoAs. One for where you are now, including all the stuff that is missed off, and the other for a new house, loan from stepdad, changes to secured loan, mortgage and some unsecured debt.