Advice on transfer of equity/remortgage

Strangepotato

Hello,  I am looking for some advice please.
I have a joint mortgage with my husband, we owe £117k and have £156k equity, with 22 years left on the mortgage.

We would love to borrow £50k to consolidate a few debts and then invest in a new kitchen and bathroom.

The issue we have is that I am in a debt management plan which is nowhere near finished and I have 5 defaults against my name. There is absolutely no chance that my current lender will allow additional borrowing - I haven't even tried, but I know it will be a big no no.

My husband earns £51k per year and has a perfect credit history with no late payments etc.

How can we access the equity we have?

I have spoken with a mortgage broker who suggested a second charge mortgage, but I absolutely don't want to do this as it will cost us more in the long run as my name will be brought into it as it's a joint mortgage, and we will not be on good rates.

An option that I've been thinking of is removing myself from the mortgage and then either staying with the same lender and my husband borrowing the money in 6 months time, when they can see he can afford it alone, or again, remove myself from the mortgage and then my husband applies elsewhere and borrows sooner.

I know this is a lot of effort with a lot of costs involved, solicitors, removing myself from the deeds etc and I would also have £2000 to pay to come out of the mortgage early if he were to move to another lender, but I don't see how else we can access the equity? 

We are in a good loving relationship and have been married for 14 years and I would also get something drawn up so I still have an interest in the house should anything happen. We also have good life insurance policies/income protection policies in place and he would also add the house into the will for me.

Is anyone able to offer any advice at all? I feel it's not as simple as me walking into the mortgage lenders office and saying 'we have equity sat there, but my credit is crap, remove me and lend to my husband please!' I don't want anything I do to seem dodgy... but in reality, if we could borrow some money to sort a few things out and also the house, it would save us a lot of money in the long run.

(before anyone says anything about my DMP, I had a lot of unpaid sickness due to almost losing my life, bills got too much and my husband wasn't able to support at the time due to not being in the role he is currently in, it is not because I have money issues)

Thank you in advance.

BikingBud

It is normally considered unwise to consolidate unsecured debt against your house. Perhaps rather than going down this route you have a look at the Debt Free Wannabe board where you will get some great advice on minimising the impact of your current debt.

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

Brie

Rather than try to add unsecured debt to the secured debt which is your home you need to look at alternatives.  

He could help you clear your debts.

You both could then save to get the money for the renovations. 

Or, as he has such a good credit history, your husband might be able to get a line of credit directly with whomever does the renovations.  I'm not recommending any firm in particular but I know that the big DIY and reno firms often have 0% credit arrangements or payment plans that may be affordable for him.  That way he could finance the work while you continue with your DMP.    

Strangepotato

Thank you both for your advice, I understand what you are saying, but for us, just paying off the loans will give us an extra £800 per month, so we are keen to do this if we are able to but utilising out equity. It may not be the best thing to do, but it is a chance for us to get our finances back on track and also renovate.

penners324

You're borrowing more. You're not 'utilising' equity

Strangepotato

penners324 said:

You're borrowing more. You're not 'utilising' equity

To pay things off yes, and then start again financially. We will also then have the funds to overpay the mortgage each month to reduce the term. The total mortgage with the borrowing will still only be £167k, which is more than affordable for us.

Emmia

Strangepotato said:

penners324 said:

You're borrowing more. You're not 'utilising' equity

To pay things off yes, and then start again financially. We will also then have the funds to overpay the mortgage each month to reduce the term. The total mortgage with the borrowing will still only be £167k, which is more than affordable for us.

Have you fully addressed the reasons that you've got into this situation?

Personally I would work with your husband to pay off your debts, and only then look at options for renovation - your home should not be seen as a piggy bank to dip into. If you can save £800 a month once you've paid your debts off, you should be able to afford to pay for the renovations within a couple of years without needing to dip into your equity.

Strangepotato

Emmia said:

Strangepotato said:

penners324 said:

You're borrowing more. You're not 'utilising' equity

To pay things off yes, and then start again financially. We will also then have the funds to overpay the mortgage each month to reduce the term. The total mortgage with the borrowing will still only be £167k, which is more than affordable for us.

Have you fully addressed the reasons that you've got into this situation?

Personally I would work with your husband to pay off your debts, and only then look at options for renovation - your home should not be seen as a piggy bank to dip into. If you can save £800 a month once you've paid your debts off, you should be able to afford to pay for the renovations within a couple of years without needing to dip into your equity.

Unfortunately I had 2 separate cardiac arrests, missed a lot of time at work, Hubby broke his foot, lost money at work, car engine blew up - just life and bad circumstances thrown at us unfortunately. We now have income protection policies in place but certainly learned the hard way about that. I will look into all options before making any rash decisions, thank you.