Credit card balance to mortgage?

Neil_Sedaka

In the current climate, what's the chances of consolidating (if that's the correct term) our rather large credit card debt, into our mortgage.

The APR on the cards is obviously much higher than that of the mortgage and as we're currently only paying slightly more than the minimum payment each month, it would seem to be a wise move (it's killing us)

Has anyone else approached their lender and requested same?

House is not in neg equity (I hope to God)
We're on a tracker mortgage, if that makes any difference.

And yes, credit cards would then be banished to the great abyss of satan's backside.

Any thoughts or advice gratefully received.

Thanks.

Long Onion

It is unlikely at present that your mortgage lender would be willing to do this. Most banks are unwilling to assume unsecured debt, rolling the same into your mortgage would prove difficult in terms of Mortgage tax relief also. Recently the revenue have begun a project to determine which portions of peoples mortgages were used for the house (thereby eligible for TRSI) and which portions were used for consolidation of personal debt (which are not).

The other caveat is that if you were to get a lender to agree to this, you are basically using your family home as security for a debt which is currently unsecured. As it is, should your situation worsen and force you to miss poayments, the credit card will end up affecting your credit history but will have no other comeback , if you roll it into the mortgage and the same happens, now you are at risk of losing your home.

I would call the credit card company and arrange a payment plan, cut up the cards and arrange to pay the agreed amount by direct debit on the day your salary hits the account, you would be surprised how you cease to miss some money once it becomes a force of habit to pay it.

Neil_Sedaka

Thanks for the advice, much appreciated.
Perhaps going to chance my arm anyway, in the not too distant future.
The worst they can say is no.

Thanks again.

broker2008

You could possibly arrange a top up mortgage that will be a separate loan to the one on the tracker rate for minor home improvements. Be aware thought that this debt would cost a lot more if spread out over the term of the mortgage.I'm not necessarily recommending it but it is an option to consider. Ideally you would try to take out a short term loan that has a lower interest rate than the credit card and pay off as soon as you can. Good luck.

jaysond

Consider getting a bank loan out to pay off the credit card and when you clear the balance, cut up the card. You didn't state what balance you have on the card or who the provider is and what rate of interest they are charging on the card?

If you lump your credit card debt onto your mortgage, you are effectively moving short-term debt onto long-term and also going from unsecured borrowings to secured borrowings and you will most likely pay more for it in the end....Also, if you remortgage, there will most likely be extra expenses involved e.g. solicitors etc. and the 'cheaper' interest rate could work out more expensive.

Go back over your budget and see if any further savings can be made as what your suggesting sounds like a real last resort solution...Consider getting a bank loan to clear the balance or see if you can switch providers to avail of a lower introductory rate (which I'd imagine would be quite difficult in this climate) but try anyway.

funnyname

What about transfering the existing CC debt onto a new card with a lower rate of interest (some even offer 0% for balance transfers for 12 months), there is usually a fee of 2 to 3% for this but it could work out cheaper than that what you are currently repaying.

Neil_Sedaka

A lot to mull over!!
Thanks so much to all that replied