are we effed trying to remortgage?

[Matchingcollarandcuffs]

We desperately need to remortgage as currently need to do a loft extension as boy/girl teens share a room.

We want toremortgage to 68% LTV, it's still under 3 x joint salary.

We want to use some of the money to pay off credit cards.

Issue is they're all maxed out, and they want statements for all off them.

Whilst it looks bad on paper paying our debts off would free up more than £1.8k a month, with new mortgage figure that's still more than £1k more disposable income after mortgage and essentials paid. We'd have over £2k 'spare'

We're stuffed aren't we? Need to spend next 6 or so months living way under or means and start paying some credit off. .

Have you tried speaking to a broker? If not, make that your first port of call.

If you have and these are the options, it might be tricky as a lot of lenders don’t take into account the decisions you intend to make (as many people who intend to moderate their new spending power after a debt restructure don’t), but your current situation. If that’s the case, it might be best to grit your teeth and have a frugal 6 months, pay down as much cc debt as possible and try again. If the cc payments cover day to day cost of living, this can be a particular red flag, so try and avoid if you can.

No useful advice OP, but hope you don’t mind if I lurk as I’m in a similar situation.

Speak to a mortgage broker. Find a decent one that doesn't charge a fee. They'll be able to advise whether you can do a debt consolidation and borrow the extra to pay off the unsecured debt and do the home improvements

Def speak to a broker. Ask around for recommendations.

Can you give us an idea of the debt?
I know its tempting to want to wipe the slate clean but advice is usually not to add unsecured debt to a mortgage or loan.
How did the debts arise?
If overspending, have you tackled the underlying reasons?

Your debt repayments are nearly two grand a month?

How much is the debt in total (is that minimums you’re paying at £1,800pcm? - hope not!), how much can you pay off in 6 months, and why did you get into debt?

You need to stop thinking you’ll be living ‘way below your means’ while you pay the debt off. Because actually these cc debts are now part of your bills. Rolling them into the mortgage makes month to month look better but it’s not usually a good financial decision overall long term.

Also, building work is really expensive right now and what happens if you can’t afford to pay them off/can’t afford to complete the work and end up in more debt. A contingency is going to be vital really.

Yes, we will still have a healthy contingency, we will do it in stages, firstly the lift and then replace the kitchen if there's enough.

I know it's not normally the right thing to consolidate but we have no other choices, we have to give the kids their own rooms.

As to how we got here, doing/spending too over too long combined with one offs for house/car/holiday.

Debt consolidation can be a totally reasonable thing to do. How can you be sure, though, that you won't run up further CC bills after you've remortgaged?

Speak to your bank and to a broker.

I’m also not sure I understand living below your means, you must be signficantly in debt, paying it off doesn’t mean you’re living below your means.

Yes, but we are currently only making the main payments, I mean to prioritise making bigger payments to start paying the balances down.

DH is literally financially illiterate, don't think he even knows who our mortgage is with. So I do all the finances/sorting/arranging etc whilst undergoing diagnosis for a life changing diagnosis (EDS/POTS/cardiac) and about to have surgery .

If we remortgage our monthly outgoings will be much smaller and so if I end up having to leave my job we will be able to manage. As things stand currently we can't.

It's awful

^ min payments

I don't see the problem in theory, will you pass new affordability checks?

taking into account, income, debt & age?

The fact people have big credit card debts they can't immediately pay off usually indicates they are living beyond their means. Try another broker by all means though.

I’m sorry you’ve been ill.

When you run up debt like this for ‘one-offs’ (house, car, holiday etc) and then also overspend month by month, it can be really extremely terrifically hard to get out of that spending mindset and if you’re not all onboard for the long haul then it’s much worse. Nothing you’ve said makes me think it sounds like a good idea if your DH is not financially great and you are not well.

How overcrowded are you? Do you only have a 2-bed house? Any different bedroom configuration you can do instead - give up dining room as a bedroom & build garden office/room for teen chill space would be significantly cheaper, for instance. Subdivide largest room (yours?) for teens and you and DH take smallest room etc.

Sorry I missed that you have been ill. Not sure I would embark on this extension work until you feel better. And prices for materials are really high àt the moment,

No, 3 bed house, eldest with additional needs so currently have DD15 and DS13 sharing a room and DH and I both sharing the dining table to work. We've been eating off our laps for 2 years.

I think it is a good idea as will decrease our outgoings massively, we could afford costs on one salary and we'd still have well over £130k equity. We live in London suburbs and our housing hasn't gone silly prices yet so no crash due.

If this doesn't come off we'll have to sell and rent, and will never get back on housing ladder again. I would rather try anything than that.

Re being ill it's lifelong so trying to secure our future should I have to give up work. If I die it's fine as have insurance/pension, it's the being going and not working with our current debts that's the potential killer

OP, I know it’s not what you want to hear, but I agree with the other poster that nothing you have written makes me think this is a good idea if your long term finances. Everything you write seems to indicate you overspend, and would continue to do so if you got this re-mortgage. In fact in you posts you have already spent the money several
times over - paying of your CC, 2 different extensions, and also in allowing you to stop work/reduce work and your income.

I agree with other that you should have a frugal 6 months and pay off as many CC/debts as you can. Yes, your children need separate rooms at those ages, but you have known about them getting older and this problem for years, and still prioritised holidays and other things over it, so another 6 months won’t hurt them. It also might provide the focus you need to stick to a strict financial
budget.

That is really difficult. Presume eldest with additional needs is a) permanently home/likely to be and b) cannot share at all?

I’m sure the loft extension plan is a good idea rather than the alternative of needing to rent, and I totally get the need to future-proof. But realistically you’ll need to tighten your belts considerably if you did need to give up work so perhaps doing that for a stretch is the right thing anyway? It takes time to get building stuff sorted so it’s worth being in that mindset ASAP. You will need all the teens and DH onboard.

Op. I also think you need to pay off your debts, if you’re looking at a mortgage of 800 a month are you borrowing 150grand or so? Is your credit card debt in the region of 100k?

I think if it’s this kind of level you will not be accepted for a mortgage. I’m sorry.

I've just looked at the snowball calculator, it is doable, even 6 months would make a huge difference.

I just hate that is all on me. Again. It's like money is a language that DH doesn't understand

give up dining room as a bedroom & build garden office/room

This could still work?

Am I understanding this right - £1.8k is the minimum payment on your credit card debt? And that debt was racked up through just regular overspending plus holidays etc?

You need to sit down and do a thorough, bottom-up review of your finances and establish a monthly budget.

Work out one budget for your current situation which enables you to pay the CCs down as hard as you can. And work out another budget for your position if you remortgaged.

I would spend 6 mths living to the first budget, paying that debt down and getting into good spending habits, before considering applying for the remortgage. It will also look better when you come to remortgage if it is obvious that you're not currently overspending.

And I would shelve your extension plans for the time being - you need to get your spending in order before considering big extra costs. You can work out how to cope with the space you have - put up a temporary partition in a bedroom, put a shed in the garden, work out the best use of space to fit a desk in somewhere.