Releasing equity in my house

Samuurai
Samuurai Posts: 10 Forumite
in Debt-free wannabe
Hi,

I have £25K worth of credit card debt and have lost my job due to my employer liquidating. I have just got a contract job, albeit with a pay cut.

We have a property which we tried to sell but had no interest. We took out a mortgage for £989K three years ago and we have paid it down to £860K. The house is worth about £1.35M.

I am wanting to approach our mortgage lender (Virgin Money) to see if they can release £30,000 of the equity back to us. I am just wondering if anyone has any pointers on how best to approach them? Do we tell them the full sob story? Do I mention that my girlfriend is due to inherit some money in 3-6 months?

I know this is normally considered a remortgage, however we wouldn't pass any affordability checks now. Since the business went south, we had to take paycuts and when we tried to get a new mortgage last September, there was no chance due to our lower incomes and increased debt.

Any help would be appreciated. Thanks!

Comments

  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    Hello Samurai and welcome to MSE :)

    I'm sorry, I cannot advise on how to release equity.

    I just wanted to check whether you had tried to get a 0% balance transfer credit card? Take a look at the MSE Article - Balance Transfer Credit Cards Up to 36mths 0%, 2.49% fee. There is an eligibility checker within the article, that allows you to check your chances by doing a 'soft' search on your credit file, so as not to negatively impact your credit report. Maybe you could reduce your repayments this way?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • sourcrates
    sourcrates Posts: 28,833 Ambassador
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    Samuurai wrote: »
    I know this is normally considered a remortgage, however we wouldn't pass any affordability checks now. Since the business went south.


    Hi,


    There in lies your answer.


    How are you managing the mortgage repayments, on that size mortgage ?


    Currently the credit card debt is all non priority, and you could just pay a £1 a month to each account, why would you turn that into priority debt ?


    Makes no sense, just ride out the storm until things improve.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Samuurai
    Samuurai Posts: 10 Forumite
    Hi,

    Because they are totalling £900/month in payments which I can't afford. What do you mean by paying £1 into each account?
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    Samuurai wrote: »
    What do you mean by paying £1 into each account?
    When can I offer a token payment to a debt?


    Source: DebtCamel
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • sourcrates
    sourcrates Posts: 28,833 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    Samuurai wrote: »
    Hi,

    Because they are totalling £900/month in payments which I can't afford. What do you mean by paying £1 into each account?


    Instead of further borrowing, if you cannot afford the minimum credit card payments, then just make token payments of say £1 to each card instead, due to your circumstances.


    Its a form of debt management rather than attempt re-mortgage or consolidation.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,573 Ambassador
    First Anniversary First Post Name Dropper I've been Money Tipped!
    Can you rent the property to bring in some income? Reduce the price to get more interest? Are you living in the property?

    Write to credit card companies offering token payments. The mortgage is more important.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • pennystretcher
    pennystretcher Posts: 458 Forumite
    First Anniversary Combo Breaker First Post Mortgage-free Glee!
    Are you on a fixed term deal with your mortgage? Or has the deal expired? If the deal has ended, you should look into current lender's offers and ask to switch if you can find a better deal with them. Not sure about Virgin, but with YBS it was a simple thing of them sending me details of deals I could switch to and then confirm with them which one I wanted.
  • Suseka97
    Suseka97 Posts: 1,562 Forumite
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    I doubt you'll get an 'equity release / remortgage' - but even if you could, what you are looking to do here is turn a 'non-priority debt' (aka credit cards/loans) into a 'priority debt' (mortgage). That really isn't the way to go. Sit down and work out your income and expenditure position and if it proves that you really cannot afford the minimum payments then you need to be speaking to your creditors and setting up an 'informal' payment plan. You could use the services of a free debt charity (StepChange or PayPlan) - google Debt Management Plans to find out more.
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