Remortgage Advice Needed

angelaoctober

hi if anyone can help in anyway I will appreciate it.

My husband and I have a mortgage of 100K on a 200K property. We have 17K in savings, but debts of a 40k loan and 15k credit cards. as you can guess we struggle most months, although we bring home aroung £3K per month.
We are in dilema as to what to do. (We dont pay any interest on the credit cards as we swop them to new ones every 6 month). We want to use our savings effectively, we never have had this much savings so we are a bit reluctant to clear the credit card debts with it. and Just 'waste' it clearing them. We want to remortgage as we have 100K invested in our house. With our current Mortgage provider Abbey, we have a penetely clause that if we add money (= or -) or adjust it in any way we have to pay fees of 5K. This clause expires in March 2006.
Can anyone aid in any light?? Please.
Thanks

Freddie_Snowbits

Don’t think you have a problem with your mortgage. The penalty clause prevents any change to that at this juncture, though when it is time to re-mortgage, don’t take their first answer, walk down the high street and look around.

The second point of your credit card shuffle, and your savings. Well personally I have savings for the rainy day and a small credit card balance that is on average about 25% of my income (Mrs Freddie would love to see more!). The question I would ask, is my credit card balance increasing? If it is, that is the area to look at this moment in time.

Although it appears as though you have managed to get the best rates and 0%, it may not always be possible to keep on at this level. I would attack the highest interest cards first and pay them off, then gradually reduce the reliance on credit card debt.

Point to remember.

Credit Card at 12% APR £1000 balance at the end of the month equals £120 interest a year :-[ :-[ :-[
Savings at 5.1% £1000 balance equals £51 interest a year.

NETT LOSS £49