Can I remortgage to pay debt

Klouise77

Evening all. 
Joint mortgage with husband, Halifax.

I owe 39k over credit cards and unsecured loans. The amount is not going down at all! Over the past few years it creaps up. I had to change my job and reduce hours due to personal circumstances. 
Excellent credit score, no missed payments but paying minimum and constantly balance transfers to keep interest low. Personal circumstances have made it difficult at home and as such I reduced hours.

Mortgage we have about 90k equity. Its a small ish mortgage and husband should easily pass affordability check alone for it. Im wondering whether we can remortgage to clear my debt? I can easily afford the extra payment, ive worked it out and repayment far less obviously over a long period but would ease pressure significantly. It would put us at 79 ltv. Is it straightforward? Is this a valid option?

RAS

Err.. no

Securing consumer debt is a no-no.

If you are struggling to pay consumer debt the worst thing that can happen is a CCJ but very unlikely if you default and then make payments.

If you re-mortgage without addressing the underlying issue, you lose the roof over your heads.

Even if you retain the roof over your heads, you'll almost certainly pay more for the privilege and eat a lot of baked beans.

QrizB

Everyone here will tell you not to turn unsecured debt into secured debt. At the moment, if you or your husband lose your jobs or fall ill or whatever, your unsecured creditors will have no claim on your home. Adding it to your mortgage will change all that.

Where did the debt come from and why does it keep growing when you say you can make the payments?

Have you ever completed a Statement of Affairs? It'll help you (and us) work out where all the money goes.

https://lemonfool.co.uk/financecalculators/soa.php

Klouise77

Ive done the sums, they all add up perfectly. You mention addressing underlying issue, I did state due to personal circumstances I had to significantly reduce my hours at work. These personal circumstances are huge and life long,  sadly cant be reversed! Its not that im earning less for fun i can assure you! 

Klouise77

QrizB said:

Everyone here will tell you not to turn unsecured debt into secured debt. At the moment, if you or your husband lose your jobs or fall ill or whatever, your unsecured creditors will have no claim on your home. Adding it to your mortgage will change all that.

Where did the debt come from and why does it keep growing when you say you can make the payments?

Have you ever completed a Statement of Affairs? It'll help you (and us) work out where all the money goes.

https://lemonfool.co.uk/financecalculators/soa.php

Thing is I mentioned the life changing personal circumstances which mean I had to halve my work hours and ultimately income. Its a huge impact and absolutely no control or way of changing

enthusiasticsaver

Even if life changing circumstances have changed I would never recommend remortgaging your house to pay off unsecured debt. You would effectively lose half your equity.   If you cannot meet unsecured debt  repayments I would suggest you look at a DMP. 

fatbelly

It's not clearing your debt, is it?

Just moving it to a more dangerous place

A debt management plan is the way forward for you

RAS

You need to prioritise paying your secured debt, including mortgage, and your essential costs like CT, utilities, insurance, food and clothing.

What is left over goes towards your consumer debt, assuming you have any surplus. So stop, look and listen. A few weeks isn't that long to research and check options before you make irretrievable decisions.

tigergambit

Klouise77 said:

Evening all. 
Joint mortgage with husband, Halifax.

I owe 39k over credit cards and unsecured loans. The amount is not going down at all! Over the past few years it creaps up. I had to change my job and reduce hours due to personal circumstances. 
Excellent credit score, no missed payments but paying minimum and constantly balance transfers to keep interest low. Personal circumstances have made it difficult at home and as such I reduced hours.

Mortgage we have about 90k equity. Its a small ish mortgage and husband should easily pass affordability check alone for it. Im wondering whether we can remortgage to clear my debt? I can easily afford the extra payment, ive worked it out and repayment far less obviously over a long period but would ease pressure significantly. It would put us at 79 ltv. Is it straightforward? Is this a valid option?

Absolutely not!

Never swap unsecured debt for secured. Default followed by a DMP is your way out.

kimwp

Klouise77 said:

Ive done the sums, they all add up perfectly. You mention addressing underlying issue, I did state due to personal circumstances I had to significantly reduce my hours at work. These personal circumstances are huge and life long,  sadly cant be reversed! Its not that im earning less for fun i can assure you! 

If the debt is due to reduced income and this will continue, then the debt will continue to increase, suggesting that the sums don't quite add up for solving the issue. Sharing your SOA will get you the most tailored guidance for your circumstance, but there's obviously no obligation to do so.

Rob5342

Klouise77 said:

Ive done the sums, they all add up perfectly. You mention addressing underlying issue, I did state due to personal circumstances I had to significantly reduce my hours at work. These personal circumstances are huge and life long,  sadly cant be reversed! Its not that im earning less for fun i can assure you! 

Lots of us here have been in similar situations and know what it can be like, we are just trying to get an understanding of your situation to help you find the best solution. I, for example, ran up 44k on credit cards and have been on a dmp for the last foir years. Don't take any of the comments as judgement on you, it's just that people are keen to try and stop other people falling into the same traps that they did 

I think most people would advise against moving the debts to your mortgage as that would put you at much greater risk if you lost your job etc. Defaulting and then a DMP sounds like the way to go here, with a DMP you just pay what you can afford and in the longer term you can make settlement offers and clear the debts for much less. If you can post a statement of affairs that would help people advise further.