What would you do?

Beatle_Ray

Hi, not been here for a while, apologies, and also want to thank in advance all the replies and advice received. OK here goes, situation is this, i work for myself, have done for the past seven years, business is not too good, i average about £15K a year, the mortgage is £1011 per month on a tracker, I'm just entering in April year two of a two year tracker deal, so far that has been the right decision, my estimation is the house is worth £470,000 and i current owe £61,000 so the LTV is approx 13%, I'm struggling to pay the mortgage each month, the wife works but she has a low income and pays the bills and food, we dont lead a lavish lifestyle, so i had a thought, how easy would it be for me to borrow say £ 20,000 against the house and use that extra capital to help pay the monthly bills and hope the business picks up, or is that just plain stupid, i dont want to move and downsize just yet but that is my alternative, i have £700 on a credit card owing and thats all the debt i have, I'm 63 and my wife is 59, there is also a lot of stress paying the mortgage each month it is starting to get a little worrying, i have assets of approx £9000, what should i do please

edinburgher

Sorry if this is an obvious question but why don't you consider a job working for someone else? Even a minimum wage job would pay c. £25k for full-time hours.

Do you have any pensions you can draw yet?

South_coast

Or see if extending the term on the mortgage is an option? It would cost you more overall, but it sounds like that's less of a consideration?

Emmia

I think as galling as this is likely to be, you have to consider taking up paid employment. Your business isn't paying you at minimum wage level, so that's the bit that needs to change.

Remortgaging to pay off debt simply moves debt from unsecured (credit card) to secured (mortgage) - but you've got into this debt already, which means you're living beyond the means you have. What would change if you paid off the credit card? What stops you accruing another £700 of debt next year, and the year after...

Beatle_Ray

Thanks for the replies, i have looked at other paid employment but my age is working against me, i have the experience and knowledge to make my business work and have invested a lot into it, the £700 debt can be easily paid off and will be next month, its at 0% interest so I'm not using the card to live off, it was for a holiday at Christmas thats all.

My question was also in part, what are the mechanics of borrowing more on the mortgage to help in the short term with the mortgage, i just needed someone to advise me thats all, thanks

born_again

My question was also in part, what are the mechanics of borrowing more on the mortgage to help in the short term with the mortgage, i just needed someone to advise me that's all, thanks

You are going to be in affordability issue there. To put it like this. You are having issues, affording to pay the mortgage now. How will you afford a larger mortgage, when the loan has run out?

How good are your accounts to prove you could pay the extra?

As soon as lender works out why the reason is, it will be a no.

edinburgher

I would have the same take as @born_again - and there is a risk of fraud if you're not open about the lack of affordability.

AgathaSquirrel

What’s the rationale for not downsizing? What would you move from (size, type of house) to?

beanielou

show long does mortgage have to run?

Beatle_Ray

Thanks for the replies, it is an affordability issue certainly, the mortgage has five years left to run and we'd be downsizing from a three bedroom house to a two bedroom house

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81898812#Comment_81898812

If you don't want to move to employment, then you probably need to press the downsize button sooner, rather than later.