£55K debt

Grumpelstiltskin

PanAction25 said:

@ManyWays - Thanks a lot, I will redo the SOA and repost as suggested.

Also I spoke to my previous mortgage advisor to understand if default  could increase the mortgage  interest rate when it’s due for renewal in 2027. The Advisor’s  suggestion was that I should  ask TSB if they would be willing to add the credit card debts onto the mortgage. The advisor advised that I completely stop using credit card so that I could savings from the credit cards to gradually pay TSB as long as the payment is not more than 10% annually. Alternatively, if TSB doesn’t agree, then I could consider a second mortgage.  

Any thoughts on those options?

A mortgage adviser who didn't know that you could carry on with the same mortgage company without a credit check?

RAS

Please ignore the mortgage advisor.

Do not add unsecured debt to your mortgage.

Do not use a mortgage advisor when your deal ends. You sign to your existing provider in 3-6 months before.it ends, select the best deal and two minutes later you are sorted. Without any credit check. 

Which saves you getting hit with by adverse credit deals.

PanAction25

@ManyWays - No I don’t have mortgage arrears and have never missed any payment before. Ironically my credit score is excellent but it’s not relevant. 

ManyWays

PanAction25 said:

@ManyWays - Thanks a lot, I will redo the SOA and repost as suggested.

Also I spoke to my previous mortgage advisor to understand if default  could increase the mortgage  interest rate when it’s due for renewal in 2027. The Advisor’s  suggestion was that I should  ask TSB if they would be willing to add the credit card debts onto the mortgage. The advisor advised that I completely stop using credit card so that I could savings from the credit cards to gradually pay TSB as long as the payment is not more than 10% annually. Alternatively, if TSB doesn’t agree, then I could consider a second mortgage.  

Any thoughts on those options?

Sounds confused. Either your mortgage adviser is more interested in his fees than your options, or he gave technically correct answers to the way you accidentally phrased a question and didn't step back and look at your other options. Mortgage advisers and not debt advisers 

PanAction25

My question to the mortgage adviser was that the mortgage renewal is in May 2027 so if I were to default would I able to able to remortgage or get a better rate with TSB.  The adviser’s answer was that any default or DMP would make it difficult/impossible  to remortgage with high street lender unless I use a specialist mortgage lender but the rate would be high around 7-8%. 

I then asked what if I were to default and settle the debts in 2027 but he replied that even when the defaults have all been settled, a high street lender would want to see that the debt were settled atleast 3years before remortgaging.

For now, I’m not convinced that I should contact TSB for the credit debts to be the mortgage. I’m happy to live without consumer credits and based on my experience with CC, I don’t intend to use or apply for credits again (a cautious approach). It appears if I were to default on all my debts, I could build an emergency fund of £10K in 6 months and if I were to default on only the credit cards I could build emergency fund of £7.3K in 6 months as CC debt alone is around £30K. My main  worry here is how would default affect remortgaging or mortgage renewal with the same lender or with another lender. Would I get a better rate or the high interest rates? Currently fixed rate on the mortgage with TSB is 2.49%. 

One thing is that after spending the past few days on this forum to read about people’s stories and how they successfully turned this around, I’m less stressed than I was before because I’ve had little or no sleep last week - thinking about the how to be responsible with money, pay my current debt and be debt free. 

Once again thanks y’all for your questions, answers and suggestions. They are very helpful. 

RAS

PanAction25 said:

My question to the mortgage adviser was that the mortgage renewal is in May 2027 so if I were to default would I able to able to remortgage or get a better rate with TSB.  The adviser’s answer was that any default or DMP would make it difficult/impossible  to remortgage with high street lender unless I use a specialist mortgage lender but the rate would be high around 7-8%. 

I then asked what if I were to default and settle the debts in 2027 but he replied that even when the defaults have all been settled, a high street lender would want to see that the debt were settled atleast 3years before remortgaging.

For now, I’m not convinced that I should contact TSB for the credit debts to be the mortgage. I’m happy to live without consumer credits and based on my experience with CC, I don’t intend to use or apply for credits again (a cautious approach). It appears if I were to default on all my debts, I could build an emergency fund of £10K in 6 months and if I were to default on only the credit cards I could build emergency fund of £7.3K in 6 months as CC debt alone is around £30K. My main  worry here is how would default affect remortgaging or mortgage renewal with the same lender or with another lender. Would I get a better rate or the high interest rates? Currently fixed rate on the mortgage with TSB is 2.49%. 

One thing is that after spending the past few days on this forum to read about people’s stories and how they successfully turned this around, I’m less stressed than I was before because I’ve had little or no sleep last week - thinking about the how to be responsible with money, pay my current debt and be debt free. 

Once again thanks y’all for your questions, answers and suggestions. They are very helpful. 

This still doesn't make sense. You seem to be confusing some many things I struggle to understand.

Starting point. Towards the end of your current fix, you simply go into your TSB account and select the best of their offers and sign up.

Your credit record has NO, repeat no, impact on your TSB choices because they don't check your credit record. As long as your mortgage is up to date.

So you must keep up to date on your mortgage and other secure payments, and can default your consumer/u secured debt payments

PanAction25

@RAS - Many thanks and sorry for any confusion.  I do not perfectly understand how the default would impact the mortgage so thanks for the the clarification that it won’t impact my TSB choices.  Speaking the mortgage adviser (who perhaps doesn’t fully understand how it works) made me concern and ended up suggesting a second mortgage which I am not keen (not an option for me). 

So in summary, defaulting will not impact my mortgage renewal with TSB. But may affect my ability to remortgage with another lender.  Self DMP will limit default on my credit report to 6yrs but DMP with StepChange would make it longer.  For self-DMP, I would need to miss payments for 6months, wait for the accounts to be closed as default and build emergency fund within that 6 months  and subsequent months. Once account is reported as default, contact the DCA for payment agreement (starting with a lower amount) and try to settle the debt within 6 years (if possible). 

Rob5342

I have four defaults and changed to a new fixed rate deal with no problems at all. I just logged onto Santanders Internet banking and chose a new deal, it took about 2 minutes.

The important thing is to stop paying and wait for defaults before starting a DMP, that way your credit record will s harmed for the least possible time. Once defaulted you can manage it yourself or use Stepchange, some people find it helpful to uae Stepchange to start with and then move to managing it themselves once they are more comfortable with the process. That's the route I took, but I didn't wait for defaults first which I now deeply regret. 

ManyWays

Check out this page from TSB: https://www.tsb.co.uk/mortgages/existing-customers.html. it says:

Switch to a new deal online

If you know the rate you want, switching your mortgage online is quick and easy.

There's no legal or valuation fees

No credit checks or documents needed

Secure a new rate 3 months before your existing one ends

So no credit checks, they wont even notice the defaults and payment arrangements.

NeverendingDMP

Just to add to everyone else about the remortgage. We have had defaults/been in a dmp the last two times our fixed term ended. It just meant I didnt go shopping elsewhere for a new mortgage as that would have needed a credit check/maybe a fee/and actually a lot more effort 😂. Instead I went online to my bank looked at the choices and picked the one i liked best (we still got choices of fixed rated for 2,3,5 yrs and tracker type stuff. I also could watch it before it was due and decide when to press yes to a rate I was willing to sign up to). I can't speak for tsb but it was ten minutes of a job with santander and actually my rates were pretty much the same as the good headline ones at the time.