Advise needed

kel123_2

Background
In 2004 my shop closed although the bussiness it's self didn't leave me much debt. Durring it's failing months the credit cards and current account took a batterring. It took 6 months to finally realise we had a problem and a further 12 months to set up debt management through payplan. For the last 16 months we have had no default payments registered against us. But before this 16 months we have had loads of defaults!

Our mortgage was with the lenders credit management services department, it is now back as normal with no arrears, which gives us the oportunity to look around to see if we can make ourselve solvent again.

We are not happy with our motgage interest rate and we are looking to consolidate our debts.

Mortgage - 80k -7.69% - 14 years
Creditors - approx 30k
Assets - 300k
income - 33k

We have found high street lender look at the last 3 years - so our credit rating is ?&%$& (being polite). We are looking therefore at non traditional lenders that are willing to lend but at a slightly higher rate (still less that 7.69%). We have come across the option of consolidating the debt with the mortgage and only paying interest only for two years therefor not reducing the capital nor the number of years. This would give us our 3 years of good credit, we can then search for a better deal. What do you think?

At the moment we seem to be stuck in a trap! Only one of us is working. If the other gets a job then our creditor see the reward with no increase in standard of living for us. Were as if the above method is used then even a minimum wage job, increases our standard of living. Our present income is secure (teacher), so at first sight this seems to fit the bill: unless you know differently?

IWantToBeFree_2

Are the debts unsecured?

Consolidating unsecured debt into secured debt is generally seen as a bad thing. If you fail to make payments towards unsecured debts, you wreck your credit file and run the risk of having charges put on your property (which isn't the end of the world if your not planning on selling).

However, miss mortgage payments and you could find yourself with a roof over your head. Whilst your job at the minute seems secure, you never know what the future my hold, and should circumstances change & you find yoursel without regular income to pay the increase mortgage you could find yourself fighing to save your home.

Also, if you are consolidating loans, they may be front loaded with interest so you would pay interest on the interest & in the long run it would be far more expensive to pay off.

kel123_2

Thanks I understand what your saying

The loan I have is about 10k of the debt and is not loaded. The real issue is me (male) getting a job! But i'm firmly fixed in the trap. I need one to stop me going completely insain and to stop the old grey matter stagnating further. If we continue as we are, it will take 16.5 years + inflation to pay off. and i'll have been retired (ha ha how can I be retired if i'm not working) for a year and a half. To be able to start paying full again means I have to take a job around 12k (balance point) so anything above this is increase in std of living. tharefor to be minimum wage wage better off I need a job 22k/annum

I'm still mulling it over. but if that secured job fails now were are stuffed

rayday2

Have you tried Chelsea Building Society I rang them this week and they are not concerned too much about defaults, they are more interested in whether or not you have paid your secured debts mortgages. Also if you stay with them after two years you can remortgage with them and they will ignore your credit history so long as you have paid your mortgage with them on time.

Obviously they only do Chelsea Building Society products but you can go to them direct and I got quoted 6.34% my mortgage is currently 9.7% and my secured loan is 10.8% so fingers crossed if it goes through its good news for us.

Application is only as far as I have got but the phone calls I have been treated as a valued customer no specific department for my type of credit its all been positive so far....