Should I Remortgage My House To Pay Of My Credit Card Debt? My Adviser Says I Should..?
My house is worth approximately £200,000 pounds and I have a small mortgage for £30,000 I recently became self employed and needed to borrow to finance a car and some business premises, plus I have to pay the bills. Hence the credit cards have started to creep up. i.e. I owe £30,000 to c.card companies and bank loans. What should I do my income hasn’t really taken off and my advicer says that’s ok I can do a projection and he can sort a mortgage out for me. Can you help?
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When you owe money, creditors get good at collecting. It my take a while, but they will come after it. Having said that, if mortgaging your house means you will have lower monthly payments to allow you the breathing room you currently need for your new business – it MAY make sense.
Understand, lower monthly payments, just means lower payments, not lower overall cost. With a mortgage, the total dollar figure can be quite large – especially when you factor in fees.
If you can get an alternative loan, at a reasonable rate, consider that – it is a good idea to keep your business affairs separate from you personal.
Good Luck!
I think your first option should be to see if you can get a credit card with an introductory interest rate for balance transfers that lasts at least a year. Then you should transfer your credit card debt to that card.
I would not use my house as colateral until I was in a position that I had the income to be sure I could pay off the loan.
I THINK U SHOULD AS RATE OF INTEREST ON MORTGAGING HOUSE WILL BE LOWER THAN WHAT U PAY FOR CREDIT CARD DEBT
Whoa! I would never give someone a chance to take my home for a 30,000 pound loan! Does this advisor make commission if you take out a loan thru him? Please, get another opinion, if not two or three. Here in the US we have not-for profit consumer debt agencies that help clients lower credit card interest rates and charges. Check to see if you area offers something similiar. This deal seems like a winner-just not for you…
Here in the US we have a consumer advocate named Clark Howard who advises against this and his reasons vary with each person and they make sense as well. Check out his web site before making your decision, you can even ask him.
Since your income really hasn’t taken off yet – I would advise you to speak to this adviser and let him do this projection – and look at every angle – esp. the fact that what happens if your salary does not take off for a very long time – can you and will you run into trouble?
Once you pay off your credit card debt – are you going to make certain that you only use the credit cards in extreme emergencies? or will you go back to using them for just about every purchase you make?
If you default on the loan – you can lose your house – so give that lots of consideration and make certain that you can keep on top of this loan – should you decide to take it.
Good Luck!
well im no professional but the best way 2 start paying of ur credit card debt ( assuming you have more than one) is by first and foremost making a chart which tells you how much you owe each credit card and the percentage of interest on each card.then choose the card which has the lowest amount and pay that first.as it is a smaller amount it wil get paid sooner.that way even though it wil take some time u can close all ur cards.dont make the mistake of remortgaging ur house 2 pay for ur cards.it will never end.
do not morgage the house