Would You DO This? Increase Mortgage To Clear Debts

pixie1

I know i havent posted much over the last 12 months but i would love it if you could give me some advice.

I have a large debt which is currently on a DMP with the CCCS. As you can see from my siggi its going to take a LONG time to pay off. Im two years in and havent as yet had a review but this is due any day now.

Two of my debts were passed to DCA's but they both agree to continue at he rates agreed prior on my DMP.

My husband has agreed to allow me to increase our mortgage to pay off my debts once and for all on the understanding that all my wages go into his account and he give me an allowence to live on. He will then pay as much of my money off the mortgage so that we can try and clear it asap (thinking of a one accoun). Hubs is very good with money, im obviously crap with money.

Im going to try and get full and final settlement figures from my creditors in hope that my debt will be reduced.

I know Im moving debt but i fear that the dca's wont stay understanding for much longer, also ive recieved conf that halfax wont stop my interest anymore.

Do you think this is a good idea? I will be debt free (except for mortgage), Im not bothered about re-building my credit history as i never want a cc ever again but i just want the stress of it gone.

Any advice would be great

Thanks

Pix

silvercar

The one account is definitely not a good idea. Offset mortgages generally charge a slightly higher interest rate than other similar mortgages. It has been calculated (there is an epic thread of number crunching if you want the nitty gritty on the mortgage board) that to benefit from an offset account you need to have at least 20% of your mortgage value in savings.

The one account has a particularly high interest rate, so I would suggest that you look for other offset accounts if you definitely want to go down this road.

Better to open a savings account to put your money in and use it to reduce your mortgage as and when.

As to the general idea of increasing the mortgage to get rid of debts. This only works if your spending is well under control and remember the advert footnotes:


your home is at risk .....

barnaby-bear

silvercar wrote: »

As to the general idea of increasing the mortgage to get rid of debts. This only works if your spending is well under control and remember the advert footnotes:

your home is at risk .....

Err how on earth does it get rid of debt, a mortgage *is* a debt, one secured against your home, one over a very long time on which you pay lots and lots of interest e.g on a £150k mortgage you'll make payments of around £300k on 25 year term....

pixie1

barnaby-bear wrote: »

Err how on earth does it get rid of debt, a mortgage *is* a debt, one secured against your home, one over a very long time on which you pay lots and lots of interest e.g on a £150k mortgage you'll make payments of around £300k on 25 year term....

Im not stupid, i know that it wont get rid of my debt but it would make it easier to handle, no nasty phone calls or letters.

barnaby-bear

pixie1 wrote: »

Im not stupid, i know that it wont get rid of my debt but it would make it easier to handle, no nasty phone calls or letters.

Easier? It will probably cost more in interest, it may be easier to run up further debt and it may risk your home... Generally people are very reluctant to recommend consolidation especially turning unsecured into secured debt....

angelflower_2

personally I wouldnt.

A friend has done this and because she is lucky enough to have a relatively large amount of equity in her house, and she is now putting all her debt money away every month to make additional payments to the mortgage, I think in her circumstance it is ok. However, as I would suspect most people will say, this is not the best idea as the temptation to take on extra credit is too easy.

I think you might just have to keep your head down and plug away. What about looking at ways you can increase your monthly income to pay things off at a faster rate?

pixie1

angelflower wrote: »

personally I wouldnt.

A friend has done this and because she is lucky enough to have a relatively large amount of equity in her house, and she is now putting all her debt money away every month to make additional payments to the mortgage, I think in her circumstance it is ok. However, as I would suspect most people will say, this is not the best idea as the temptation to take on extra credit is too easy.

I think you might just have to keep your head down and plug away. What about looking at ways you can increase your monthly income to pay things off at a faster rate?

Im in a simular position, large amount of equity and all monies left will go against the mortgage to try and clear it quicker. Even if i could get credit, which i cant duw to my dmp i wouldnt, it would mean the end of my marrage.

I did have a part time job as well as my full time one for a year, gave it up last summer due to illness (I suffer from depression). Im trying to get alternative p/t work now as Im doing a little better. I have applied to the q&a text service and text chat hopefully something will come of one of my applications.

Thanks for the advice

Pix

ree1971

i am in very bad debt cant remortgage my house due to bad debt as i only have 30,000 left 2 pay the house is valued at 120,000 husband has jst left me so on income support with 3 kids cant eem to see an end 2 this problems can any1 help plz

Bunnyinthelights

Pixie,
We are in a similar situation (nice to see you again btw!)
If it was me, I'd LOVE to be able to do it-however, common sense says to keep plugging away at the debt. As my OH says, think of it as AN INTREST FREE LOAN, of which a mortgage is definately NOT.

Sorry if it's not want you want to hear, but TBH, 2 years into my DMP I no longer get the nasty letters or phones calls-that stopped ages ago.

x

dhassen

ree1971 wrote: »

i am in very bad debt cant remortgage my house due to bad debt as i only have 30,000 left 2 pay the house is valued at 120,000 husband has jst left me so on income support with 3 kids cant eem to see an end 2 this problems can any1 help plz

start a new thread of your own in the dfw forum, I'm sure lots of people will offer advice and support

rayday2

Sorry to throw a possible spanner in the works.. but if you have bad credit which you do if on a DMP then you will have impacted your husbands credit rating and when you come to remortgage could end up with a higher interest rate. Of course you won't know until you try. Is the mortgage just in his name or joint?

I hardly get any letters anymore and I am nearly two years into mine. I treat it as an interest free loan and take it day to day.