please help..........

squibbs25

We've run up a cc's bill of about 1.5/2k (max).

I am due to remortgage next month and my dilema is this.

We need to clear cc bills and do a few home improvements

Do we

a) remortgage for £60,000 (currently £53,000) pay cc's and do home improvements

OR

b) keep to exsiting amount of £53,000 and get a personal loan to clear debts and make improvements?
(i dont know what the payment pm would be for this, just know it would be alot less than £422!)


I have posted in the mortage section but don't think i have explained myslef clearly enough!


Payments on £60k will be £422 pm (10 yr Fixed @5.59 20yr term)

I've totally confused myself and not sure what to do for the best.

Squibbs

OberonSH

Personally, I'd avoid anything being added onto the mortgage, as you'll be paying interest for 10 years, with a loan at least it'll (usually) be for a shorter period. It does depend on how much you want for home improvements, hough.

You also have to work out why you got the CC's up in the first place - the last thing you want is to pay them off, add to the mortgage and then find you've run them up again.

Emmy_L

Couldnt have put it better myself

peb

Morning; the general consensus is never to consolidate - firstly you are turning unsecured debt into secured debt and secondly you are goin to end up payin more over a longer time frame. Dependant on your circumstances 1.5/2k is not a lot and you should hopefully be able to clear it reasonabely quickly.

So far as the home improvements are concerned are you looking at a remortgage or a further advance. It looks like you will need 5K for hte home improvements - if hte value of the house is to be increased and you can afford the higher repayments then I see nothing wrong with doing this via mortgage finance. However I would be wary in that you have run up debt whilst paying a lower repayment.

Hope that makes sense - my head is very fuzzy this am

SunderlandBlackCat

I agree with what the others have said about not adding it to your mortgage.

If you put your current CC debt into the calculator at www.whatsthecost.com/snowball.aspx it will give you a calculation of how much interest you will pay if you put as much as possible into paying off your card yourelf & show you how much extra it will cost to add it to your mortgage. The currency symbol is $ but the amounts are actually pounds)

Here's an example from one of mine from just before I joined the site.

What if I consolidated?

General [URL="javascript:openWindow ('/popups/consolidation.aspx')"]reasons[/URL] why consolidation is not always a good idea

First things first, I am not a financial expert, nor do I intend this site to give any kind of finance advice. I just give you and easy way of seeing the figures.

That said though, in my opinion, consolidation generally a bad idea. If you're in debt, it's because you spend more than you earn, and it's all too easy to get a consolidation loan, pay off your current debts, and because your monthly outlay is less, you feel you have more spending power and run up new, extra debts.

Consolidating debts into your mortgage, or another secured loan is (again, in my personal option) an even worse idea. Secured debt means that if you default on payments you'll lose your home. Not only that, but your mortgage will generally be on a much longer term, so although the interest rate may be less, in the long run you'll be paying far more.

For example, according to the figures you've just entered, you currently owe $6,000.00. If you consolidated that into your mortgage at, say 5.5% over 25 years, you'd end up paying $5,053.57 in interest. By snowballing correctly, you'd pay $450.00