How Best To Re-Structure Finances?

Bad_Actor

Hi all.

I am looking for some advice on how best to re-structure our finances before they get any worse than they already are.

I won't go into the history but put the figures down and see what people think might be the best options.

At the moment we are paying out a substantial sum every month on credit cards and loans. We transferred the majority of our high interest credit card total to a Natwest fixed low interest rate (for the term) credit card and this is never used other than to allow us to pay into it every month reducing the debt.

Net Monthly Income = £2150

Total Monthly Outgoings = £2300

The break down of our payments are as follows.

Credit Card Balance = £10 900
Loans Balance = £21 500

Current Mortgage Balance (Capital and Interest Repayment) = £87000
Remaining term is 22 years.

Property Value = Approx £180 000

As you can see, we are in negative figures every month meaning that food and such like is put on the credit card resulting in the gradual increase in debt.

We would like to borrow £40 000 either added to the mortgage or as a separate secured loan just so we can get out of this situation where we are paying so much every month on expensive loans.

I appreciate that borrowing more to pay off existing debt is not ideal but it seems the only way to get back on the straight and narrow.
Both credit cards would be cut up as we don't want to risk using them and have that creeping up again.

At present we both have good credit ratings but it's only a matter of time before that changes given the present situation.

Any advice gratefully received.

Thanks

CreditDevil

Going through something similar myself and looked into the options and considering the situation your in I would go with paying off the main debt (cards) from an advanced from mortgage lender and staying away from securing the debt on your house via a secured loan.

Obviously the risk is paying off the lot via re-mortgage then running the debt up again...

lemonhead_4

i was in the same situation, i got a secured loan and at the time could afford it, but as they are all on variable rates the monthly payments have gone up by £200 in 2 years due to the increase in interest rate. I for one wish i never took out a secured loan (could not get more on mortgage) and wish i just contacted the loan/credit card companies and try to get the payments reduced (as i have done now but still stuck with the loan)
Secured loans can be for some people and at the time i thought that was my only option, if only i thought to look on MSE back then.

I would opt to try and get the money from your mortgage company on a fixed rate term for 2 to 5 years, that way you know that each month (even if the interest rate goes up) you will be paying the same.

Good luck with all

mummytofour

If you go over to the debt free wanna be bored with your statement of affairs, incomings and ALL out goings plus interest rates of cards then I am sure that there will be buckets of advice!

Bad_Actor

Thanks for your input everyone.
I will take it over to the other forum mummytofour as suggested and see what come out of it.

Thanks again.