I’m taking control of my life, now.

boxofpaws · 27 August 2017 at 2:02PM

Suffolk_lass wrote: »

Hello Paws, I'm just back from our holiday and have just caught up on your diary. My two penny-worth is similar to EssexHebridean but slightly different.

In your shoes, I would reduce the repayments on your 0% credit cards to a round figure, just above the minimum payment - so maybe £100 per month where the minimum payment is £77.60 (for example). If you contact them, they will change your payment to a fixed amount, if you ask, as long as it exceeds the minimum.

Then save all the extra to make that final car payment in December. I would also round that £161 up to £200 per month, so that residual capital payment is also coming down as you go.

Then I would look at the dates your 0% deals expire and where you are with that car loan, with a view to a bit of consolidation at a suitable point. That might mean amalgamating two or more credit card balances or it might mean taking the residue of the car loan into a cash advance 0% deal.

Only when those two interest-paying accounts are 0-ised, would I start paying the credit cards down. I would not put everything into them all, spreading across all four. I would systematically hit them one at a time, based on the dates the deals expire, obviously attacking the shortest duration first.

I would not use all my available money on this, as I think you need some incentives. So in addition:

I would also look to "Tilly-tidy" your bank balance to a round figure every couple of days, putting that money in a savings account to build that emergency fund (I do mine to the nearest £50 at the moment, but I don't have the holiday credit card until next month)

And I would round up that mortgage payment to the next hundred with a standing instruction to the provider to overpay the capital repayment, not advance pay the interest (some are sneaky).

There you go, more like a pound's worth! - BTW I thought I was going to have to chip in over the secured vs unsecured loan issue from Italy (!). That is a complete no-no. Martin is very clear in his guidance that you do not do this.

Also, when you do look to remortgage, you want an account that lets you overpay without penalty, if possible, or overpay up to 10% of your balance per annum without penalty. By then you will be almost ready to start hammering it!

Sorry to alarm you in Italy! Bad Paws.

I can never quite believe it when people on a forum go to these lengths to understand and advise on other people's issues. To take time out of your busy lives to stop and help.

Apart from reducing cc payments to save for the PCP (which I know would be bad news for us), you have pretty much summed up some of the conclusions I was coming to. Consolidate onto 3 or 4 credit cards on 0% in around May, remortgage in August 2018, attack the CCs from there.

I can scarcely let myself think about overpaying a mortgage yet but the thought that we could be in a position to overpay the mortgage from January 2020 seems like an actual possibility :j

EssexHebridean · 30 August 2017 at 4:14PM

Pfft - of course you can be in that position Paws - it's a bit like a friend of mine put it recently about losing weight - you have to reach the point where your desire to change things is greater than you desire to stuff in crisps. She's right, and it works on the money side of things too!

if you REALLY want to get excited and maybe motivate yourself, get yourself a mortgage spreadsheet to play about with and start inputting some "what if we did this" figures...hours of fun! :rotfl:

So come on then- what's the masterplan for sorting out the final PCP payment?

Suffolk_lass · 30 August 2017 at 10:31PM

boxofpaws wrote: »

Sorry to alarm you in Italy! Bad Paws.

:rotfl::rotfl:

Narola1976 · 31 August 2017 at 7:49AM

Just popping my head in to say hi! and that you are doing very well overall. I love the support that people give on this site, taking the time to give thoughtful suggestions to help. I am not quite experienced enough yet, only on the start of my debt busting journey, so not a lot of wisdom to offer but plenty good at cheering you on!

System · 3 September 2017 at 9:04AM

Chuffed Mr Paws is getting OT and that you miss him ! In all seriousness at least things have settled down for you now , and you can keep up the debt busting so it goes down and not up.

It feels autumnal this morning in the North West, may need a coat on , sigh .

Suffolk_lass · 3 September 2017 at 9:35AM

EssexHebridean wrote: »

Pfft - of course you can be in that position Paws - it's a bit like a friend of mine put it recently about losing weight - you have to reach the point where your desire to change things is greater than you desire to stuff in crisps. She's right, and it works on the money side of things too! if you REALLY want to get excited and maybe motivate yourself, get yourself a mortgage spreadsheet to play about with and start inputting some "what if we did this" figures...hours of fun! :rotfl:

So come on then- what's the masterplan for sorting out the final PCP payment?

I'm with Essex Heb on the hours of fun modelling mortgages front but I use the mortgage calculator on the Skipton BS site - it has three settings you can toggle and play with - slidey things on two axis' - honestly, who needs Netflix! :rotfl:

enthusiasticsaver · 3 September 2017 at 11:07AM

boxofpaws wrote: »

I need to put some of my money thoughts down to try and make sense of them. I am hoping that someone out there can give me some good advice.

I started this diary in January when it dawned on me that we were further in debt than we had ever been and remortgaging in 2018 was goin to be difficult with so much credit card debt. Clearly we are making some progress since then, the Big Number is going down but there is no real purpose to what I am doing.

I am 40 in November. Husband is 46. So really, ideally, we want to have paid off the mortgage in 14 years. Current mortgage term is 18 years.

Current debts are
Car loan - £6478 - payments of £323 per month until March 2019.
Car PCP loan. Payments of £161 from now until Nov 2017. December 2017 payment is £2016
Credit cards (4) total £22500. We pay £800 - £900 to those every month (it was £900 but we will be reducing this to £800 from next month)

Current mortgage payment is £1165. Outstanding when we come to mortgage will be £167,000. House value somewhere between £245 (nationwide calculator) - 266k (zoopla estimate) right now

Summary
£1165 mortgage pm £167k outstanding
£1284 debt payments - £32k outstanding

Questions
How do we pay off PCP bubble?
Option 1 - pay minimum off CCs for the next 3 months and save it up
Option 2 - use the MBNA card that I have just cleared to do a cash transfer

Next is about remortgaging. At the time of remortgaging, we will have around £20k of debt still on loans and credit cards

Should we also clear the big car loan before we come to remortgage? Probably via the same method above, super balance transfer to pay off the remaining £3.5k that we will ave in May. This means having all our debts on credit cards. In terms of affordability, it would mean our commitment would be £600 per month on debts (£20k @ 3%). As opposed to £323 per month for the loan and PLUS £500 on credit cards

We have £2300 to pay towards mortgage and debts each month Should we try to consolidate the remainder of the debt into the mortgage but go for a shorter term - ie pay £2k for 9 years per month? OR should we borrow on a mortgage the least we can get away with and keep the maximum on credit cards we can get away with and just overpay on the mortgage once the debts are cleared? That probably makes the most sense, i think consolidation might be dangerous.
Consolidating the debt on to your mortgage would not be a good move but it does appear from reading later posts you have decided against that anyway. Consolidating debt just delays tackling it and making a plan to repay. Having paid off £10k since you started the diary in January it would seem an incredible waste to now up it by £30k to convert unsecured debt into secured. It may also entice you thinking you are debt free, which of course you aren't and allow you to go back to spending regardless without ever making a proper plan to overpay the mortgage. Of course there is also the hopefully unlikely now scenario of your husband losing his job and having a £1500- £2000 mortgage payment to make which would be huge.

I'm normally not that keen on looking towards complete debt-freeness purely because we have so far to go and I prefer to just concentrate on the short term goals, but I think to get the right mortgage deal so that we arent paying off the mortgage into our 60's, we need to start planning this right now.

Sorry for the long post, but I needed to do this as I think perhaps the answers are more obvious than I thought when I started!

Two things other than advising against debt consolidation is that for the car pcp the best option is usually the cheapest. I think it was Suffolk lass who advised paying minimums on the credit cards and saving for the balloon payment in December. Also I would highly argue against these pcp deals for anyone who works on a tight budget. So many people seem to have fallen foul of these if they get into financial difficulties and they do not even seem to have the option of handing the car back. My recommendation would be always to buy a car outright, preferably in cash saved or 0% credit card or last resort low rate personal loan.

Overpaying the mortgage should come when the unsecured debt is gone.

Suffolk_lass · 12 October 2017 at 7:10PM

I was wondering if you have sorted out that car loan I think you had to sort this month or next and if you are doing OK?

boxofpaws · 9 December 2017 at 4:07PM

Forgive me, MSEers for I have sinned. It’s been 3 months and 11 days since my last confession.

Bad.

Since then I have

Been to London for the weekend
Had an 11 day holiday in Turkey
Had a long weekend in Reykjavik for my 40th
Had a takeaway every week
Bought countless coffees and lunches at work

Bad.

Effectively, I have paid off £1500 since I last posted out of a possible £5000.

Bad.

System · 9 December 2017 at 4:27PM

Naughty Paws , lovely to hear from you . Sounds like you have had a great 3 months .

Hope all well in Paws household .

I’m taking control of my life, now.

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