Remortgaging to pay off debts

S

SarahCK

Guest
My husband and I have a lot of debts, a car loan, credit card bills, a top up loan we took out last year to do work on the house. Our wages are not lasting the month, maybe 3 weeks at best. I was thinking of remortgaging the house to clear it all. Is this a good idea. Our mortgage is currently with Bank of Ireland. We bought our house 3 years ago. We have 3 children so we also have to pay a childminder and come September montessori. I work part-time and my husband works full-time plus extra work at the weekends. We would totally be able to manage if we didn't have all the debts. Is it wise to remortgage and if so with who. Also I would love to move in the next couple of years. Is is a bad idea to remortgage if we plan to sell (we would need all the money we could get). We bought our house for 265,000 three years ago and now it is worth 410,000.

Any advice greatly appreciated.
 
Remortgaging to clear unsecured loans and CC debts etc. should generally be viewed as a once off measure to rectify debt problems and regain control of your finances. Ideally the top-up should be scheduled over a similar term to the original loans rather than the full term of the mortgage - e.g. a few years rather than a few decades. The latter would mean that you are paying for your car or CC purchases over a few decades, the montly repayments may be less but the total interest bill may be significantly more in the long run. If you do decide to do this then you should also address the spending issues that lead to this situation - e.g. get rid of the credit cards, keep a spending diary and budget and eliminate expensive unnecessary purchases that you cannot afford etc. There are lots of existing threads on budgeting and dealing with debt - e.g. the key topics pinned at the top of this forum.
 
you might look at buying a property (now) in a cheaper area. (you don't say where your area is but €400 is a lot for some places, and i notice in my area there certainly is a slowdown.
Also, its not a major saving but there is no "need" to go the monessori route - lots of well adjusted school children don't.
 
Hi Nelly,

I'm living in South Dublin so we wouldn't get anything for €410,000 and we would need something bigger than we have now.
The only reason we are going with Montessori is because it fits with my working hours and is local so I don't have to pay somebody to collect for me.
 
SarahCK said:
Thanks for that. I'll ring BOI and ask about a top-up
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You should also consider getting independent, professional advice on what's most suitable for your specific situation. Certainly don't expect such independent advice from your lender or any other tied agent.
 
ClubMan said:
You should also consider getting independent, professional advice on what's most suitable for your specific situation. Certainly don't expect such independent advice from your lender or any other tied agent.
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Where would I get independent professional advice
 
If you have serious debts then MABS might be able to help. Otherwise engage a good multi-agency intermediary or an authorised advisor preferably on the basis of a fixed fee for advice and a financial review. [broken link removed] has a list of MAI/AAs and it's also linked from a thread somewhere on AAM.
 
Mabs is the best idea. Start doing weekly cash budgets while you wait.

Put everything in it, every single cent that comes in and out of your house.

Its here



Also chop up the credit cards and store cards . Now! . All of them!
 
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