Consolidating my debt...

T

TwoWheels

Registered User
Messages
133
Current Debt;
€7,500 in C.Cards (One month left @ 0%)
€9,000 balance on Personal loan (7.5%, 2 years left)

I'm thinking of adding to my mortgage over a three year term
Mortgage is 10 months old, most of the debt has come from the cost of moving in, (Fees, appliances, decoration Etc)

I think this is probably a good plan, What is involved though, Will I need the house to be valued? Are there charges?


Thanks.
 
Re: Consolodating my debt...

TwoWheels said:
I'm thinking of adding to my mortgage over a three year term
Click to expand...
How much? €16,500?
Mortgage is 10 months old, most of the debt has come from the cost of moving in, (Fees, appliances, decoration Etc)
Click to expand...
How much is the house worth? How much is outstanding on the loan? What do you earn? Have you sounded the lender out on such a top-up? What have they said?
 
Re: Consolodating my debt...

How much is the house worth? Estimated 345k
How much is outstanding on the loan?Estimated 55k Equity
What do you earn? 60-65k
Have you sounded the lender out on such a top-up? No, not yet.

I am paying currently €345pm on personal loan & €300-350pm on cc debt
 
Re: Consolodating my debt...

As someone much wiser than me said, moving your debt from one location to another is like rearranging the desk chairs on the Titanic...

At the moment your CC and personal loan debt is unsecured. You want to move this to secured debt? Prob not a good idea.

Also, as you may know, when people consolidate their debt, it is quite normal to start using those credit cards again...

If I were you I would not move your debt to your mortgage.
 
Re: Consolodating my debt...

HotdogsFolks said:
As someone much wiser than me said, moving your debt from one location to another is like rearranging the desk chairs on the Titanic...
Click to expand...
Only if you don't switch to another more seaworthy vessel - e.g. address the budgeting/spending patterns that lead to the debt in the first place and learn to live within (or below) your means. This may involve getting rid of the cards and sticking strictly to a propery income/expenditure budget. Consolidating debts onto a mortgage to switch higher cost unsecured debt into lower cost secured debt especially over a few years rather than the full term of the mortgage (as outlined above) is no harm if it is part of an ideally once off measure to regain control of your finances and save money on reduced interest costs. I don't agree that mortgage consolidations should be discouraged in such a seemingly blanket manner as above but do agree that they should only be done after due consideration, number crunching and rectification of the spending/budgeting patterns that gave rise to the situation being addressed in the first place.

TwoWheels - you haven't clarified how much your mortgage was and how much is outstanding.
 
Re: Consolodating my debt...

I would try to consolidate the debt into the mortgage, in order to improve cash flow. However, I would then try to pay down this amount, by making extra payments, as quickly as I could.

Try your current lender to see if they'll arrange a top up for you. A lot don't charge legal fees etc. for this service, or else the charge is minimal. This would be your easiest route.

Moving into a new place can be a very expensive business. The only thing I would warn against is paying off the debt only to quickly accumulate another one!!
 
Re: Consolodating my debt...

liteweight said:
Moving into a new place can be a very expensive business.
Click to expand...
It is when, as so many people seem to do these days, one attempts to fit the whole house out in one go rather than doing it room by room within one's budget.
The only thing I would warn against is paying off the debt only to quickly accumulate another one!!
Click to expand...
Totally agree with this and the idea of accelerating the repayment of the topup if possible.
 
Re: Consolodating my debt...

TwoWheels said:
Current Debt;
€7,500 in C.Cards (One month left @ 0%)
€9,000 balance on Personal loan (7.5%, 2 years left)
Click to expand...

Read This Thread about Rate Tarting

http://www.askaboutmoney.com/showthread.php?t=34944

clear one card off (the smallest) and get rid of it totally by year end, no tax to pay on it then.

keep rate tarting the other card to 0% transfer offers , in essence you park it at 0% for a while.

only works if you actually get rid of the credit cards and do not use them again , at all, until 100% clear .

then tackle the personal loan only and as fast as you can because it costs 7.5% whiel the cards cost 0%
 
Re: Consolodating my debt...

This sounds like a quick solution and it would be ok, but before you re-mortgage to clear debts check what borrowings you are likely to need in the next 5v years, car loan, home improvements, holidays, educational costs if you have children and could you afford to support this expense with the additional re-payment? Be careful where your home is concerned.
 
Re: Consolodating my debt...

If you earn 60 - 65k, how are you having problems paying €16,500 in debt? How much money could you save a month by cutting out silly expenditure?

Really, I would look into curbing your spending so you can pay off large chunks of the CC each month rather than moving the debt onto your mortgage.
 
Re: Consolodating my debt...

With 345 on personal loan and 300 on cc PLUS mortgage repayments, I don't imagine there's much left after tax! A body has to eat you know.
 
A single person with the standard tax credits on €60K takes home about €3,500 net a month. The mortgage amount here is not clear but say it's about €300K at 4.2% over 25 years which would be c. €1,600. That leaves about €1,200 for other expenditure.
 
And a possible 700 per month on loan and credit cards, reduces this balance to 500, out of which the OP has to pay bills, eat, and travel to work presumably. I don't imagine this person is living the high life!!
 
No - I deducted the c. €700 for the loan/credit card:

Net income: €3,500
Mortgage: €1,600
Loan: €350
CC: €350
Remaining: €1,200
 
Re: Consolodating my debt...

clareG said:
This sounds like a quick solution and it would be ok, but before you re-mortgage to clear debts check what borrowings you are likely to need in the next 5v years, car loan, home improvements, holidays, educational costs if you have children and could you afford to support this expense with the additional re-payment? Be careful where your home is concerned.
Click to expand...

Also note that you may have to arrange MP insurance to cover the additional funds, which may or may not be easy, depending on your health, etc.
 
You must log in or register to reply here.
Back
Top