I currently owe £61000 in debt on credit cards / loans etc and its costing me a fortune per month. I habe approx £80000 in equity in my home and could easily afford to increase my small mortgage to cover the debts. When mortgage companies look at remortgaging do they take into account that you will be paying all your debt off when looking to see if you can afford the repayments?
2006-06-20 08:11:39 · 7 answers · asked by chazza 2 in Business & Finance ➔ Personal Finance
You have a chance.
It all depends on affordability, the valuation on your property, and your choice of mortgage company.
I would NOT lie and say it is for Home Improvements. Any responsible lender will be able to see from a simple credit search that you have other debts, and this will limit your borrowing power.
In answer to one of your questions, yes they do take into account that you are paying off all your existing commitments. Basically they assess the affordability on the basis of your total commitments once the mortgage completes.
It all depends on the value of your home in 'their' opinion, and the affordability of your repayments. You may find that even if you can only raise £55k, it will still massivly improve your situation.
Warning: If you do this, when it completes and you pay off all your debts, you will feel GREAT. This is when people start to get cocky, and decide to 'treat themselves' to a new car with a financed loan, because they can now afford it! Sounds stupid, but it happens all the time.
Good luck. Try moneysupermarket.com for some quotes and an idea of which lenders would help you.
2006-06-20 10:40:44 · answer #1 · answered by Anonymous · 2⤊ 2⤋
It is very possible that you could remortgage your property. Lenders will consider your affordability and will probably ask for a survey to check the real value of your property so you can expect a cost. Mortgage rates are usually better than rates on personal or consolidation loans and repayments are usually lower because the term of the loan is longer. This makes a mortgage the most affordable means of borrowing in most cases. If you do this, don't let yourself fall into the trap of borrowing too much again. Debt is not a good idea!!
2006-06-20 09:09:09 · answer #2 · answered by saexpat 2 · 0⤊ 0⤋
It's always a bad idea to shift debt to another loan. But putting that unsecured debt onto your home is how folks end up losing their homes. You should take a close look at your lifestyle and spending habits. Having that much debt and living paycheck to paycheck means you are living beyond your means. Make a strict budget. Eliminate all the extras -- cell phone, cable, eating out, new clothes, etc. Take every penny you can squeeze out of that budget and put it on the highest interest debt, while making minimums payments on the rest. When the highest is paid off, move to the next, till they are all paid off. Find ways to bring in extra cash. Have a garage sale, collect alum cans, get a second job -- pizza delivery has flexible hours. Throw this at that debt. If you really work at it, you can pay off your debt within 3 years. You will have saved your house, established a good payment history, and learned some new financial management skills.
2016-03-26 23:01:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It is very likely that you can get a "debt consolidation loan". The bank will usually ask what the loan is for and what you'll be using for collateral. In this case, the equity you have in your home. I'm very sure you can get this loan and be paying less overall than all your high interest credit card loans. Good luck!
2006-06-20 08:35:53 · answer #4 · answered by Sugarbear 3 · 0⤊ 0⤋
Tell them you want to do home improvements. They'll check your finances but they're desperate for your business at the mo - so you'll be fine. You've got nothing to lose by trying. Except your debt!
2006-06-20 08:16:01 · answer #5 · answered by Stevie T 2 · 0⤊ 0⤋
declare yourself as bankrupt as it only goes against you for 3 years, then all your debts are gone
2006-06-20 09:47:34 · answer #6 · answered by Samantha T 2 · 0⤊ 0⤋
if i was you id go bankrupt
2006-06-20 08:20:42 · answer #7 · answered by Anonymous · 0⤊ 0⤋