Re-Mortgage?? Help

A question about : Re-Mortgage?? Help

Hi all, my 1st post on here so go gentle, due to reduncy and change in credit card rates and 0% transfer availability my debt spiralled from 9k in 2006 to 65k in sept 2010 having a good job and my head in the sand i waited to 2010 to seek advice and ended up on a DMP, 4 years later and having paid off 20k of debt i am pleased with my progress but things have been extremely tight and want to sort this out

We have a morgage of 92k with 20 years remaining the house is valued at 150k+ So have equity in the property my question is....

Can i release value from the house to offer payments to my defaulted cc as full and final settlements???

Best answers:

• Hi
  You may well find you will struggle to extend your mortgage due to your DMP, both the fact that you are in a DMP but even more so due to your credit file from being in the DMP.
  If you were able to extend your mortgage you may well be looking at subprime rates, which could work out very expensive.
  How long is your DMP due to last? Have your creditors currently frozen interest?
• Well done for paying off what you have so far, and welcome to the community here
  Can you do it and should you do it are different questions.
  A few questions from me
  How long would it take to be debt free if you carry on as you are?
  Have you been offered a mortgage which covers the debt?
  Have you enquired about full and final payments with your creditors?
  As I see it there are pros and cons, the cons would be having a worse loan to value and so a worse mortgage rate, the unsecured debt becoming secured, and the risk of running up the debt again.
  The pros would be getting substantially reduced full and final payments and this may make the total amount payable less, even taking in to consideration the interest payable on the higher mortgage, and having less outgoing a month so things are not so 'tight'.
  People cleverer than me will be along shortly to pick through the details.
• Yes the interest is frozen on the credit cards as for how Long left to run not sue original company who set it up for me went bankrupt, the company's concerned have allowed me to carry on paying so far
  My defaults will drop from my credit file in 2 years and i have 4 years of being up to date on all payments since the dmp started
• 614 months for credit cards
  15 months for loan
  Once loan payed will be adding that payment to increase cc payments
• Is your DMP still with a commercial company? taking a fee from your monthly payment?
  if so, and if you do nothing else, switch your DMP to either one of the free charities or consider self-managing your DMP. That monthly fee can go towards your debts.
  edit - that 618 doesn't look right if you have paid off Ј20k in 4years. How much is your monthly DMP payment?
• I am self managing since they went bust, i had payed for 1 year upfront, they wanted me to go bankrupt but rightly or wrongly i font belive in it.
  My mortgage and loan have never had a missed or late payment
  I have focused payments on loan Halifax refused to freeze interest and a car hp agrement as needed the car for work, hp agreement finished now and the loan which had front loaded interest is down to 3.9k with the over payments i am making will be finished in 12-15 months
  The credit cards i pay the minimum that was agreed i have increased the payments by a Ј1 each per year to keep them off my back whilst i focused on the loan and hp
  As for getting in the same situation again wont happen i have no intention of getting credit cards again although others are telling me i should to help build my credit rating
• I have not been offered the mortgage our 5 year fixed has now elapsed and i have not tried for any credit in the last 4 years with the exception of renewing my phone contract, my experian rating went from 980 to 214 after all the defaults hit thought it was best to avoid attempted credit
  The reason i ask about the mortgage option is if i could release the equity i have the lump sums to offer for full and final settlements i want this monkey of my back so i can focus on a debt free future
  Over the last 4 years we have not been able to replace anything in the house that is coming to the end of its life or save any cash as a safety net, we are now at the stage where things do need replacing and without some disposable income we are in a precarious position
  I want to pay back what i owe but if i can settle by not paying some of the intrest and fees that make up over 1/2 the debt then i will
• You could make tentative enquiries about how much they will take as a full and final, and at least you would have this information, even if you can't get the mortgage, you could perhaps carry on as you are then once the loan is paid off maybe save for a full and final with what you are paying on the loan at the moment.
  I paid mine off with full and finals and they took between 30 and 90 percent, my defaults were only 10 months old, so you might get low settlement figures.
  Your current mortgage provider might be able to help as they 'know' you as a customer.
• No No NO.!
  I'm sorry, but what you are suggesting is to turn an unsecured debt into a secured one and THEN voluntarily pay compounding interest for the next 20 years on that debt which I guarantee will work out at WAY MORE than your debt now.
  Dont to it.
  If you won the lottery, got a substantial payrise, I would say go for it. But never, ever turn unsecured debts into secured no matter how tempting. At the moment, if you lose your job, you just stop paying them. Secured debt is something else and 4% compounding annual interest on your debt is silly. You would pay Ј18000+ in interest on a debt of Ј40K over 20 years at 4% average. So basically, you would pay another one THIRD in interest on top of your initial debt by going down this route.
• I have resisted asking for full and finals yet due to not having the cash available however i have had a few offers sent already from them around the 70% mark
  I think if i could get my loan to value to 80% i would be able to clear all debt with the exception of the mortgage, as the defaults have 2 years left not sure weather it is best to wait before trying to free the funds
  I dont want to damage my credit score anymore than it already is by a attempt that is destined to fail so hoping to find out if others have had success with this method
  Capital one my smallest debt of 2.5k have offered 1600 for full and final on a general equerry so believe they will go lower
• The plan was to release capital from mortgage to pay full and finals on the credit cards should reduce my debt by around 10k through the full and finals and allow me to overpay the mortgage as i will only have one debt
  In today's world would it be bad to have no debt but a mortgage with a ltv of 80% on a repayment mortgage????
  I know i am not paying intrest at present on the cc but i dont want them hanging over me for the next 20 years either would like to move house at some point.
• Give it another 2 years and the defaulted debt will no longer appear on your credit report and then you can remortgage at a low rate of interest and you can offer a full and final settlement at around the 50% mark.