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. .

Cos rats have chewed through the cupboards, food and the electrics were routed on top of the wake rather than in. And it's currently only just over 2ft wide between Appliances, so if my mobility deteriorates further I won't be able to move in it!

We reckon £120k for works rest on debts

I wouldn't say it's impossible or that it's a bad idea in and of itself. If you pay the mortgage down fast, it could work out, the issue is if you would actually stop taking on new debt. I'd spend 6 months paying down the debt and living well within your means first.

Have you gone through all possible house configurations to get a 4th bedroom? Could the largest bedroom be partitioned into two for your younger children? That would leave a bedroom for you & DH, and another for your eldest. Another option might be partitioning the biggest room in the house, and converting a bedroom into a family space instead. Even if partitioning made only 2 small rooms you could use Loft beds for DC with desk and wardrobe underneath. You could use a loft bed in your bedroom and put desks under then turn the dining/office room into a bedroom for one of the DC. I understand the feeling of wanting to make everything perfectly ready in the face of a potentially worsening chronic illness, but part of being able to cope if you get worse is making sure your finances are secure. Also the stress of renovations and extra debt may well have a bad effect on your health. If you can find a good enough solution without renovating and then spend the next 12 months paying off every bit of debt you can you'll be in a much more secure position and won't have to worry so much about paying off debt if you do get worse.

I've tried and the rooms are only just over 3.6m wide, doesn't really afford enough space. Plus fitted wardrobes etc. Itt works be spending to improve value too.

We're going to stick paperwork in PLUS have plan for next 6 months, should be able to pay off a couple of cards in that time which will help.

£120k for the renovation, plus £50k for the credit cards, plus £9k for the second mortgage means borrowing an additional £180k on top of your current mortgage.

There is no way that an additional £180k is going to cost only £500 per month over 25 years - you'll be looking at more like £750-£800 a month on top of the £900 you already pay (or a much longer term). I'd advise you to clarify the numbers with your broker, as it doesn't stack up at all.

I understand the feeling of wanting to make everything perfectly ready in the face of a potentially worsening chronic illness, but part of being able to cope if you get worse is making sure your finances are secure.

I agree with this.

The 50k includes the 9k but yes I know.

Thanks for all your help, just packing for a (free) 2 nights away in a caravan after our we moved our original just due to p&o, then DH got Covid. Ferry refund covered the £120 cost of 3 nights away, food minimal just arcade spending money. Birthday Sunday, no presents (asked for) but will spend time don't a realistic war chest budget and looking at cheaper house config options. And listing clothing on Vinted. And cutting up credit cards and removing from Apple pay.

Thanks for your service, and straight talking. I needed it.

One final question. As we pay off cards is it better to keep them open but clear giving us a better credit utilisation ratio of close so we hold less debt?

Hi, I can recommend a great mortgage adviser who specialises in adverse credit/those with a large amount of debt (I work in the industry). I won't post details here as I guess that would be against the rules but feel free to message me if you need any advice/guidance 😊

Recommend L&C mortgages as broker whole of market no fee.

Yes don’t close the credit cards unless you will be too tempted to use them, I have around £7000 in credit card debt on 0% because my overall credit utilisation is low (less than 25%) it’s never been an issue with getting a mortgage or 0% balance transfers and credit score is 1000 out of 1000.

Thanks for all your help, just packing for a (free) 2 nights away in a caravan after our we moved our original just due to p&o, then DH got Covid. Ferry refund covered the £120 cost of 3 nights away, food minimal just arcade spending money.

You are still spending money that should be going towards your massive debts and overcrowded housing situation. Continue with this attitude to money and things are only going to get worse.

Keep one card, you do not need fifty grands worth of credit op. And honestly if you have them the likely hood is you will both do the same thing again.

i really don’t think you’ve worked this out, you cannot borrow 180 grand for 500 a month.

So you HAVE spoken to a broker? And what did they say?

@Matchingcollarandcuffs London and Country (LandC) are recommended by MoneySavingExpert, they are completely free and are whole of the market. We have used them repeatedly however we have never had any debt but they will be able to advise you on the best way forward.

They seem to think it's fine and Nat West will lend no bother. And wants our statements etc. It's when I look at these I realised we have just been at max, and realise it paints a different picture.

Broker thinks as long as we pay off debts with re mortgage is not an issue. But this was 2 months ago . .

So what did you tell them when you applied?
Im really confused as initially you said you applied for 50+30 so 80K but now its 180K?
Whats your salary?
In all honesty Op if I had 50K debt I wouldnt be spending more.
Cany you claim the kitchen damage on insurance?

Can you trust him to stop too?

So does this mean you will be using the mortgage funds released to pay off your credit card debt. And this money must pay for extension and kitchen replacement too. Then interest rates on mortgages might increase significantly. I think you need to carefully consider the financial implications.

OP we are in a similar position so I can sympathise, large amount of debt built up over past 9 years due to difficult circumstances. I'm about to start a new job which will help but the debt repayments are crippling us financially, meaning we don't have enough left to get through each month without borrowing more. Our 2 year fixed deal is about to end so we need to remortgage anyway, value of our house has increased a fair bit since we bought it. Ideally we want to remortgage to consolidate the debt and finish renovations/extension on our house - we have a 3 bed house (1 bedroom is tiny), with 3 rapidly growing teens plus 1 younger DC with a disability. But to be honest, I would settle for just borrowing enough to consolidate our unsecured debt and therefore reducing our monthly outgoings to a reasonable amount, allowing space for us to save and stop worrying whether we'll get through each month without going over our overdraft limit. I'm not sure where else we could 'tighten our belts' TBH as already living very frugally.

Sorry I didn't mean to confuse.

Current mortgage £117k
Debts £50K
Hoping to borrow extra £180k ish
House value £440k (conservative, next door just sold for £465)
Salary £102k

So we'd still be at only 3x salary

We can pay off 3 cards and make more than min payments in next 6 months, so if broker can't help (or only a v high cost offer) we'll be in better shape then.

And if worst comes to worst move. I realise we are lucky to have a roof and equity, and jobs that pay

V @pinkpip100 it's frightening how quickly it happens isn't it? And that awful feeling of too much month left for the money

The numbers don’t make any sense though, no broker could have advised this.

80k mortgage would be about 500 or so a month depending on term.
180 would be closer to 900 or 1k a month.

you’d still be better off as it would be 1900 v 2700 but the fact you’ve so very much credit card debt I think will count you out.

Anyway, enjoy your hols.

I know, the exact figure he have was £1472 a month for £180k

They're is a big but though. I asked DH to liaise with broker to try and foster financial spirit, I haven't seen what figures he havee, these are what we discussed.

I think something has got lost in translation. Hence you all telling me quite rightly I'm way off.

Think might just ask broker to start from scratch

For £180k extra. Think DH probably asked for £180k total, which on our current term would be about £1400 a month . . .

Feck

Going back to the broker (and stopping the catastrophising in the meantime…) is probably a good idea.

OP you need a plan for rest of 2022. Put up room divider so teens get some privacy. Go through bank statement and highlight all outgoings. Go through each one and think if it can be cancelled, reduced or must be paid. Use 3 different colours. For me that would be Virgin TV/Media package, Netflix, Disney+, add on BT Sport, Sky Sport. If I needed to I could say cancel Sky Sport, BT Sport and Disney+, reduce Media package to cheaper one and keep just Netflix. I could cancel cleaner. There will be things you like as a family to have but don't need. These are things to go immediately. Then get kids on board. If your plan is to succeed they won't get large Xmas gifts. Make them understand to get new mortgage in New Year you MUST reduce outgoings or bank won't give you new mortgage. Try to make sure each person in family is giving something up. Don't book a holiday this year. I have not had one for 3 years and I can afford one. Look at food budget, what are your cheaper meal options? Have them more often. Cut out takeaways. Can you cut teens pocket money/allowance but let them earn some of it back by doing chores. This will help when you have surgery. My sister was in significant debt and at serious risk of losing her home. She came to me to help her make a budget. She stopped buying many magazines and coffees. Her DH stopped buying lunch/coffee at lunch time at office. No more Friday takeaway. Started shopping using a meal plan at Aldi. No more snacking from fridge as all food was part of a meal. Homemade soup made from fresh vegetables for Saturday lunch. Kids had clothes allowance cut, had to look at second hand clothing. Bike used instead of car whenever possible to save fuel. Thermostat only on 1 hour morning and 1 hour evening. She managed to save in region of £1200 pcm. She paid this straight off of debt. She got 0 percent credit card and moved debt on to that to save interest. She sold a few things on eBay. Her teen dd did babysitting to earn money and son dog walking for neighbours. DH took packed lunch. She cut up credit card so no new spending. No holidays. Cheap Xmas, she came to me. You can significantly reduce your debt by Xmas but you have to all agree to stock to rules. If you want to pm me with your outgoings I can suggest cutbacks for you. She did get out of debt completely but it took her 4 years and 4 months. Hard going but she said once she saw debt going down she stopped getting headaches, her blood pressure went down, DH stopped snapping all the time. Kids because good with budgeting. You will feel so much better. Good luck OP.