WWYD re mortgage

[thinkstraight]

Hoping someone can sort out my thinking so I can make the right decision.
Husband and I are separated but still in same house, there's still a glimmer of hope we may be able to sort it out but...

We have a bit of equity in the house, but not enough to do anything with if it were split two ways, and neither of us really want to sell, mainly cos of disruption to the three kids.

Anyhow, if we discount selling, we really need to remortgage cos we're currently on interest-only, and standard variable which is steadily rising. We also have huge credit card/overdraught debts.

Through a mortgage broker we think we can remortgage, but, and this is the main point of the OP, should we stick all the debts on the mortgage, which will mean paying £1,500 a month, less than all our current outgoings, but still a lot if anything were to happen to either of our jobs.

Or should we keep the mortgage low, and pay more each month for a while to service the other debts. As that way if we do run into trouble we can stop paying the cards, without threatening our home.

Or should we just admit after two years of trying that our 20-year marriage is over and sell and rent separately?

Your mortgage rate will almost certainly be lower than other debt. I would roll it all together. Don't forget you can offset or overpay some mortgages to cut it down quicker. Our mortgage you can overpay £500 per month without penalty, which I think is standard for Nationwide mortgages.

If you sell, can you afford a mortgage for a big enough property on just your salary?

Thanks VJ.
I couldn't afford a mortgage on my income no, certainly not for somewhere big enough for myself and the kids.

It scares me to have a big mortgage, though. I'm freelance, and although have had the same clients etc for more than 5 years, it could all change tomorrow. I don't really expect it to but you never know!

The all-rolled-in mortgage would definitely be cheaper long-term, but does it make sense now? If I was, say, £200 short one month, that would put me in arrears on the mortgage, whereas if it were a separate card debt, I could just miss a month and still cover the mortgage. Not ideal, but no threat to our home.

I think it kind of depends on where the debts came from. If you are compulsive spenders and live outside your means then I would not put it on the mortgage because you may just rack up even more debt. If they were relatively unavoidable or incurred for a big purchase like a car or home improvements then I would put them on the mortgage.

If you put it on the mortgage you could always make overpayments to the value of your current debt repayments and then you would have actually 'paid off' the debt in a shorter time IYSWIM.

I'm not sure about the marriage thing, I hope it works out for you. I would find it hard to live with someone if we weren't in a relationship but if there's a chance that you might be reconciled then I would do everything I could to give that the best chance.

Thanks Apple. We're not big spenders, fortunately. No holidays for the past three years. Stuff for the kids is our biggest outgoing - teenagers are not cheap we've discovered.

The debts are pretty long-standing since H's business folded four years ago and he was unemployed for around six months, almost grieving I think. He also refused to let go of his grand plans and borrowed more to set something similar up, which failed too. That certainly didn't make our marriage stronger!

But he's back in a reasonably paid job, now, but I do wonder if we can sort ourselves out that he'll take that as green-light to start dreaming again!

Bumping for late arrivals! Two so far in the bigger mortgage camp, any other takers? Please

My first reaction is that if you are splitting you shouldn't roll the debts together. I think it sounds like you could end up paying for it all yourself via a bigger mortgage without (ex)dh contributing. I think you would need to prioritise paying the existing mortgage on your own and keeping a roof over your children's heads as cheaply as possible and the other debts should be dealt with in a way which won't threaten that. If they are really problematic maybe one of those free debt management plans would help?

If you and dh manage to work it out then I imagine rolling the debts into the mortgage might work as you can deal with the cost of the mortgage together and will save money between you overall.

The mortgage will be cheaper APR but is over a much longer term (up to 25 years) so the debt might end up costing you more. Although a credit card will have a higher APR if you have a realistic plan to pay it back in a short timescale then you will pay less overall.
I'm definitely not an expert so can you get professional advice (CAB type advice not from a financial advisor or bank as they just want to sell you product)