Remortgage/debt management

Magicchivz

Hello all,

I was wondering what people think about clearing credit card debt when remortgaging? I have a friend who is just coming to the end of her mortgage deal term, and is looking to remortgage. There is 70k left to pay off on the mortgage, the house value is approx 100k. The credit card debt totals 3k. Is it wise to pay of the creditcard debt while remortgaging? Also, how do you do it?

I stumbled across HSBC special mortgage rate of 4.99% - That seems to be the cheapest available at the moment. Anyone know anything else about this? Am I missing something?
Thanks

luckyfool

If your friend can pay the credit card debt off quickly from income then they should do that.

The HSBC deals have a few catches. e.g. They have standard products, then slightly cheaper rates if you have a HSBC Plus current account~(you need to open one if you dont already have it, this costs £12 a month), and then the cheapest rates I believe are reserved for Premier Account holders. The qualification criteria for the Premier account are quite strict, i.e. £50k in savings or investments with HSBC, or a £75k salary mandated to the account + £250k mortgage with HSBC. i.e. to get the best deals you have to move your banking to HSBC and mandate your salary to that account.

The terms for the 4.99% special rate are not completely clear, but the fee is £1,499 and I suspect at the very least you would have to move all your banking to HSBC to qualify.

Another proviso, service is likely to be suffering just now I would imagine with the rates they are offering.

Magicchivz

Thanks for the great response Lucky.

She is currently with Alliance & Leicester on 5.39% - I dont think there is a better deal for her to go too on the market - without a massive fee attached. A&L offer a 5.94% for premium account holders (which she is) with a 199 fee. This would push her monthly payments up by £20 - Im guessing this might be the best option for her?