Porting mortgage with credit card debt

[PlanB]

Re: Porting mortgage with credit card debt

Thanks plan b very useful info ! Cheers

[Richjones19772]

Re: Porting mortgage with credit card debt

Hello

Spoken to Natwest today regarding my mortgage port. At the moment with 16k credit card debt Natwest would not be able to port it, they said I must clear around 10k of it then I will pass the affordability checks.I have spoken to a couple of loan companies ( well the ones money supermarket put me onto) and they will give me a secured loan of 10k against my house but the payments are £330 a month for 5 years..sky high interest any ideas guys?

cheers

[PlanB]

Re: Porting mortgage with credit card debt

they will give me a secured loan of 10k against my house but the payments are £330 a month for 5 years..sky high interest

Good grief, at that rate you'd be paying them back £20k ! Who are these rip-off merchants?

[odetter]

Re: Porting mortgage with credit card debt

Can't you transfer your credit card debt to a low interest rate card provider?

[PlanB]

Re: Porting mortgage with credit card debt

At the moment with 16k credit card debt Natwest would not be able to port it, they said I must clear around 10k of it then I will pass the affordability checks. I have spoken to a couple of loan companies

Even if you consolidated your credit cards into one loan the overall amount of credit will remain at £16k so your bank still won't port your mortgage because they are insisting that you reduce the amount of credit by £10k. They'll still see all of it on your CRA file just under another name.

[Richjones19772]

Re: Porting mortgage with credit card debt

Hi Natwest did say if I cleared 10k they would do it, he even worked out how much a the loan would cost so he could add it into the affordability checks

[PlanB]

Re: Porting mortgage with credit card debt

It's hard to approach this sensibly without knowing the figures involved.

How big (or little ) is your current mortgage and how much equity do you have in your home?

Would you be able to buy a cheaper property nearer work (to cut down your commute) which is your motivation for moving?

Do you have an ERC (Early Redemption Penalty) if you leave your existing lender?

Is your existing mortgage on such an attractive rate (like what?) or fixed deal that you're reluctant to change to another lender which may have a less restrictive borrowing criteria?

What I'm trying to get to is whether you are in a position to buy a new home with a new lender which would provide you with a big enough mortgage to pay off your existing loan and clear your £16k credit cards all in one hit. Or even consider a remortgage of your current home to include the £16k credit card balances.

At the moment you have a squeaky clean credit rating and you have a job. That's two reasons for someone to lend you money. Some lenders are happy to do this on the condition that you use the money advanced to clear your credit cards. If you put that as a reason for borrowing on the application then they may ask your solicitor to pay those credit card providers direct when they release the funds so you can't fool them.

[PlanB]

Re: Porting mortgage with credit card debt

Natwest did say if I cleared 10k they would do it, he even worked out how much a the loan would cost so he could add it into the affordability checks

In which case why won't NatWest give you a £10k unsecured personal loan if he's happy for you to have one with someone else?

[SaltnVinegar]

Re: Porting mortgage with credit card debt

Thanks plan b.The house move is basically to stop a long commute. Six months ago my credit card debt was around 8k now it's doubled this is the reason I was worried about them not porting it over.

I am starting to worry about the card payments though at the moment I'm paying over £400 a month and it's starting to get very tight.

So your debt doubled in 6 months from £8k to £16k? Even with repayments of £400/month this suggests at least a monthly shortfall of £900/month. Thats either a hell of a commute or perhaps this is actually what you should start looking at. This would signal alarm bells with most lenders and would also suggest why your bank won't provide you a consolidation loan.

Think on it - on the information you've provided to date even if you consolidated all of your loans into that £300/month payment you would still owe £8k and you would still have a shortfall of £800/month. However, you're asking the bank now to take on the risk as opposed to it being with the other lenders. Make sense?

Hello

Spoken to Natwest today regarding my mortgage port. At the moment with 16k credit card debt Natwest would not be able to port it, they said I must clear around 10k of it then I will pass the affordability checks.I have spoken to a couple of loan companies ( well the ones money supermarket put me onto) and they will give me a secured loan of 10k against my house but the payments are £330 a month for 5 years..sky high interest any ideas guys?

Yes - instead of extending your borrowing you need to look at your income/expenditure. Is there any way you can reduce that debt through reducing your expenditure.

Please, please, please DON'T take a secured loan on your house. The information you've provided to date would suggest you're severely overstretched and consequently the potential risk is huge. I am also confused as to the current mortgage situation as you said you only had the mortgage 6 months. Have you owned your home for longer?

Reason for asking is that most secured lenders base affordability on the basis of the equity in your property and if you've only had a mortgage for 6 months it leaves me wondering how you have managed to obtain £10k equity in that time...........

You can see there are lots of questions, and PlanB has asked many questions that also have gone unanswered. Its really important that everyone has a clearer picture of the circumstances as no-one can offer advice (at least the sound or credible sort), without it.

Best
SnV

[Richjones19772]

Re: Porting mortgage with credit card debt

Hi sorry I'm not making this easy for you am I?, I apologise,figures were never my strong point, probably explains why I have ended up in this mess!! I'll break it down into bullet points.

current mortgage 77k only been in it 6 months house worth 88k
new property will be around the same cost, not much available for less.
3% ERC to leave current deal early, I did get a good deal 4.7% fixed for 3 years, scared of ending the deal and not getting as good a deal with another lender or even no deal at all!.
if a lender will lend me extra cash to pay off my cards that would be perfect.

If you need anymore details please ask, I am just looking for an option,staying put is out of the question so I need to find a way out guys.

cheersg

[PlanB]

Re: Porting mortgage with credit card debt

I am just looking for an option, staying put is out of the question so I need to find a way out guys.

Let me throw you a curve ball

If you rented out your current home would there be enough in your budget (including your salary) to cover the mortgage and rent yourself somewhere nearer to your job?

I don't know how secure your job is or whether you even like the neighbourhood where you work enough to up sticks and move there permanently, but looking at all options is the way forward. Imagine how you'd feel if you moved house and then didn't need to be in that location. I also don't know where your friends and family are based but all these things should be factored into your current thinking. Never let money worries dictate your lifestyle.

If you've got a mortgage on a property with positive equity then think twice before you give that up.

[odetter]

Re: Porting mortgage with credit card debt

Sadly at the age of nearly 60 I've had to relearn the lesson of Micawberism.
If you earn 20k a year and spend 19k you'll end your life a wealthy person.
The converse is misery as I've discovered.
Thus my conclusion to your enquiry is based on that premise.
As has been very eloquently alluded to by previous posters are you spending more than you're earning?
Borrowing more money to pay off debt is not the answer.
Mr Micawber was right.
You're right I am an old fart.

[odetter]

Re: Porting mortgage with credit card debt

P.s one day I want you to return to this Forum as
Rich Rich Jones.

[SaltnVinegar]

Re: Porting mortgage with credit card debt

So your debt doubled in 6 months from £8k to £16k? Even with repayments of £400/month this suggests at least a monthly shortfall of £900/month. Thats either a hell of a commute or perhaps this is actually what you should start looking at. This would signal alarm bells with most lenders and would also suggest why your bank won't provide you a consolidation loan.

Think on it - on the information you've provided to date even if you consolidated all of your loans into that £300/month payment you would still owe £8k and you would still have a shortfall of £800/month. However, you're asking the bank now to take on the risk as opposed to it being with the other lenders. Make sense?

Hi sorry I'm not making this easy for you am I?

You're not making it easy because you're either ignoring or sidestepping the questions you're being asked (see my post above which you have failed to answer any single point). No-one here will be judgmental but we need answers to these questions otherwise its impossible to help. Theres no need to feel embarrassed or worried about posting financial information here, as long as you anonymize it its not going to be able to be traced back to you.

Example - Its difficult to understand how you can have a house with a 'value' of £88k and a mortgage of £77k in the space of 6 months unless:

1) You're working on a perceived increase in value for whatever reason (I don't think house prices have increased 10% in 6 months)
2) You put down a substantial deposit
3) You're overpaying significantly on your mortgage repayments

This, to me, may explain why you have managed to double your debt from £8k to £16k in 6 months because:

1) You've increased the value of your home by making improvements which you have racked up on credit?
2) You used credit as the deposit to get your mortgage??
3) You've used credit to overpay on your mortgage???

But I'm only summizing.......at the moment from the information you've given, I see you having a monthly short fall of approx £1000/month (at the least). If that is the case then I'll be blunt - porting your mortgage is the LEAST of your worries.

Taking out a consolidation loan isn't going to decrease your borrowing (though it may reduce monthly payments in the short term) and will do very little to improve your chances of remortgaging as your total debt will effectively be the same.

How I'd start is put together an income/expenditure sheet, and also document all your debts, who they are with, and their interest rates, and then your assets (house, car etc). This is finances 101 and will help the members of the forum get an idea of where you're at.

SnV

[Richjones19772]

Re: Porting mortgage with credit card debt

Hi sorry I was taking into account the 10k deposit we put down, 88k for the house minus 10k dep.
The totally monthly invome on average is around about £1700 (take home) the two major out goings are my mortgage at £440 and credit card debt at £400.