Help needed remortgaging a shared ownership!

Seminole

Having had a scan through the forums I cannot see this question already having been answered so would be grateful if anyone can assist! Apologies for the ramble, I am just trying to preempt any questions.

Background

Credit rating is fine but have a cashflow problem in as much credit card debt of almost £10,000 (all on 0%) minimum payment £230 per month.

Car loan running until October 2009 at £150 per month and

Overdraft (spread over three current accounts) running £4,000 in the red. Has not been in the black for several years.

Worryingly there is way too much month at the end of the money and the credit card is being used to the tune of £250 per month as we're at the overdraft limit three weeks before payday.

Household income is £1850 per month.

The solution?

Have a 50% share in a shared ownership home since 1998. Current repayment mortgage is just under £30k with Nationwide (£278 per month plus rent of £170 per month to the housing association). All "luxuries" were abandoned a long time ago and we are merely existing not living.

House is worth £200,000 therefore our share is £100k.

Want to remortgage the existing and consolidate the escalating debt and overdraft by taking out a £56,000 mortgage over 17 years (current repayment term) with the extra for some necessary home improvements.

A well known building society based in the Potteries conducted a telephone application and quoted £447 per month on a 2 year fixed rate which would have been very serviceable and allowed us to free up the cashflow, however when we went to fill in the forms they said they had made a mistake and do not lend for debt consolidation/home improvements (despite lending for exactly the same reason last year to my neighbour) on shared ownership schemes.

Nationwide will not lend on this criteria either.

Is anyone aware of any bank or building society that will provide a secured loan (only favouring secure because of the length of term as taking out unsecured up to 7 years is going to bite too much) for debt consolidation/home improvements on shared ownership?

Any advice or help is greatly appreciated as we have passed the treading water stage and beginning to drown.

Thank you

lindens

I cant offer advice on your specific query, but what i would say is this - you must be mad transferring 0% unsecured debt and changing it to 7% (or whatever) secured debt.
I would go over to the debtfreewannabee board and post up your expenditure, there are experienced people over there who will be able to shave off your outgoings and you maybe able to get your debts back in control again.
probably not want you want to hear but......

herbiesjp

Not many lenders will agree increasing the mortgage on a shared ownership property for anything other than buying a further stake in the property.

There are a handful of lenders that may look at this, but it will depend entirely on your whole situation

You would also need to look carefully at the figures to make sure that it does what out in your favour. As stated above, changing unsecured debt into secured debt and taking out over a longer period of time should be looked at as a last resort.

However, if you are digging a bigger hole for yourself by not doing anything, it can be an option to look at, before payments start being missed here and there and therefore adversely affecting your credit history

Should you go down this route, you should be careful not to start the loans or cards again to over stretch yourselves financially, otherwise you keep getting into a vicious circle - so self discipline is paramount here.

Seminole

Thanks for the replies to date. Still seeing if any lender will assist but understand the foolishness of going secured over unsecured.