mortgage advance to clear debts

slimjim

Hi

I've just bought a house with a halifax mortgage. I've yet to get the keys, should be in a few weeks. However its starting to hit me just how much im going to be paying out as im buying by myself. I have unsecured debts of 11000+ and am wondering whether i could take advantage of halifax's mortgage advance which i could use to pay off my debts and spread them over a longer period. However im not sure whether i'd need to have been paying my mortgage for years to have more equity in the property?

Does anyone know?

If not i was considering a halifax homeowner loan which is seperate from the mortgage and can be spread over long periods.

I think consolidating my debts would ease the burden of getting used to paying a mortgage and living on my own. Would halifax be more likely to offer one of these loans if they were worried that i could default on my mortgage (which i wouldnt) in my current circumstances?

appreciate any advice!

Debt_Free_Chick

You might want to think about this in a different way ....

slimjim wrote:

Hi

I've just bought a house with a halifax mortgage. I've yet to get the keys, should be in a few weeks. However its starting to hit me just how much im going to be paying out as im buying by myself. I have unsecured debts of 11000+ and am wondering whether i could take advantage of halifax's mortgage advance which i could use to pay off my debts and spread them over a longer period.

Possibly - but if you are paying back over a longer period, you often end up paying more. Why do you want to give Halifax more than is necessary simply to clear the debt? How do you feel about being in debt for a long period? Wouldn't you prefer to be debt-free (apart from the mortgage)?

However im not sure whether i'd need to have been paying my mortgage for years to have more equity in the property?

Does anyone know?

Best to check the terms of your particular mortgage and get confirmation from Halifax. What you can do depends on the terms of your particular mortgage.

If not i was considering a halifax homeowner loan which is seperate from the mortgage and can be spread over long periods.

Same comments above ... this is the same debt, rebranded, but paid over a longer period. You could end up paying more (in total) and you'd be in debt for longer.

Also, isn't a homeowner loan secured against your property? If so, you are converted unsecured debt for secured debt. That's generally a bad idea as you are attaching your home to that debt. Can't pay the debt? Then you could lose your home.

I think consolidating my debts would ease the burden of getting used to paying a mortgage and living on my own.

People often say this, but ..... why? You can't consolidate all your other bills. You have to pay Council Tax, mortgage, gas, electricity, water, telephone, food etc .... all to different people. Why does consolidating your debts make it easier to manage?

Would halifax be more likely to offer one of these loans if they were worried that i could default on my mortgage (which i wouldnt) in my current circumstances?

Credit scoring is complex and varies from one lender to another. I don't think Halifax care much about you defaulting on your mortgage, as they would simply repossess your house (ultimately).

Could you take in a lodger? This would give you extra income of about £4250 tax-free - that's about £354 a month - would that help?

Do you now have a budget? If so, you can post it here if you like and we can suggest ways for you to save money or comment on whether your budget looks manageable.

HTH

slimjim

Debt_Free_Chick wrote:

Possibly - but if you are paying back over a longer period, you often end up paying more. Why do you want to give Halifax more than is necessary simply to clear the debt? How do you feel about being in debt for a long period? Wouldn't you prefer to be debt-free (apart from the mortgage)?

People often say this, but ..... why? You can't consolidate all your other bills. You have to pay Council Tax, mortgage, gas, electricity, water, telephone, food etc .... all to different people. Why does consolidating your debts make it easier to manage?HTH

I understand what you're saying but paying the debts is fairly easy while im living with parents but will become a lot harder when im living on my own. I'd rather have them spread over a longer period and pay a little extra (although the apr on these loans is pretty low) than struggle with everything while getting used to running a home. I recently took a pay cut at work temporarily as i got promoted and lost overtime/bonuses. However i have a few years of pay increments so things should get easier.

Thanks for your advice

skintchick

Could you post your incomings, outgoings, debts and APRs please? Then we can help you draw up a budget for living on your own (I've been doing it since I was 19 - 11 years now - so reckon I might be able to help.)

slimjim

skintchick wrote:

Could you post your incomings, outgoings, debts and APRs please? Then we can help you draw up a budget for living on your own (I've been doing it since I was 19 - 11 years now - so reckon I might be able to help.)

Hi

I'll have to find some time to draw up a budget! Don't suppose i'll really know what i'll be paying out until im in the house and paying bills! It's kind of scary if my monthly outgoings are bigger than incomings... Making sure my mortgage is paid is the most important. May have to come to an agreement with the other companies if i find it too much of a struggle.

IN_LIKE_EVERYONE_ELSE!

You bought a house you are not sure you can afford until you move in and start having to pay bills? Surely you did a budget before you signed the mortgage? And you want advice from us! you should have got some advice before buying into a falling housemarket.
We would be guessing as much as you and as you well know, estimation is worthless.
Good luck, you are gonna need it.

skintchick

You can find out what your council tax will be, your TV license will be £10.41 a month, if your property is not on a water meter then you can get the rates from the water company, otherwise go on their website and they will have a bit where oyu can gues you water usage and they will guess what you'd pay on your meter (it's a starting point at least).

Go on uswitch or similar and enter details for leccy and gas and get a guesstimate of those bills too.

Phones can also be guessed at, as can food and stuff, so we can help you work out a guessed budget which is at least a place to begin.

If you're in the Thames Valley I can answer a lot of those questions right now!! (Water £27.31 if not metered for example).

slimjim

IN_LIKE_EVERYONE_ELSE! wrote:

You bought a house you are not sure you can afford until you move in and start having to pay bills? Surely you did a budget before you signed the mortgage? And you want advice from us! you should have got some advice before buying into a falling housemarket.
We would be guessing as much as you and as you well know, estimation is worthless.
Good luck, you are gonna need it.

A few of my circumstances have changed since taking out the mortgage. And yes i can afford the mortgage and household bills, I see these as the most important. If I struggle with other loan/credit card repayments then i'll speak to these companies about freezing the interest.

Ive been listening to scaremongers talking about a house price fall/crash for the past year or two, i doubt very much it'll happen. More likely to remain static for a while in my opinion. Another reason I want to cut down on loan repayments is to free up more cash to buy the remaining items i need for the house although i have most of the things i'll need.

It's hard for everyone when they buy their first home, i just want to make sure my finances are in the best order they can be

Debt_Free_Chick

slimjim wrote:

Another reason I want to cut down on loan repayments is to free up more cash to buy the remaining items i need for the house although i have most of the things i'll need.

It's hard for everyone when they buy their first home, i just want to make sure my finances are in the best order they can be

You really need to be thinking about clearing your debt, in order to free up more cash to buy the things you want.

What remaining things do you need - and you really, really NEED them?

many of us here understand your dilemma - we've been there too.

Re struggling with repayments and getting interest frozen .... this is actually quite difficult to achieve. I'm not sure that your other creditors will be very sympathetic as, effectively, you have increased your debt (mortgage) and then you are asking them (other creditors) to freeze interest.

Do a budget ASAP and post it here. Tell us what else you need for the house. And consider getting a lodger to give you an extra (up to) £350 a month of tax-free income.

slimjim

Ok here's a rough budget...

Incomings: £1300 approx (overtime can add up to £300 per month but this may finish)

Outgoings:

Mortgage £350
Rent (shared ownership): £166
Cahoot Flexible Loan: £130
Morgan Stanley CC: £95 min payment
Barclaycard CC: £30 min payment
Car Loan: £176 (due to finish Apr '06)
Council tax: £62
Gas and Electric: £30
Car insurance: £50
Petrol: £120
Gym: £25

Total: £1234

This doesn't include contents insurance and annuals like MOT etc. Nor any socialising, haircuts, clothing....

Essential items for the house are sofa, fridge freezer. A lodger really isn't an option. I may end up asking my girlfriend to move in a few months down the line.

IN_LIKE_EVERYONE_ELSE!

Food?
Remember to eat Slim Jim! That is at least £50 per week or £2600 P.A.