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  • FIRST POST
    • therealdsg
    • By therealdsg 10th Oct 16, 10:45 AM
    • 1Posts
    • 0Thanks
    therealdsg
    Madness
    • #1
    • 10th Oct 16, 10:45 AM
    Madness 10th Oct 16 at 10:45 AM
    After a rough couple of years I'm finally back on my feet but over this time have wracked up around £23,500 worth of debt covering 3 credit cards (2 at 0%) and a Tesco Loan at 3.4%. Between these 4 items it's costing me around £900 a month.

    I own my own home with a balance of £188,000 owed. Our earnings are £46,000 which gives us a maximum lend of £230,000. According to Zoopla our home is worth £310,000.

    To make things easier as we're planning on starting a family I approached my mortgage provider Santander asking to add the £23,000 onto my mortgage, I'd been over the calculations online and it would only cost me £80 extra a month. No brainer really.

    But they rejected me on balance of affordability due to the debts. Even though I explained the situations, costs, reasoning for the draw down and offered to provide them accounts numbers with consent to make direct payments. Madness.

    So I seem to be left with the option of a secured loan which I'm not mad on. Can anyone advise on this? I'm 30, my wife's 34 and our worry is that if this stops us having kids now it may be our last chance ...
Page 1
    • EssexHebridean
    • By EssexHebridean 10th Oct 16, 10:49 AM
    • 6,378 Posts
    • 35,181 Thanks
    EssexHebridean
    • #2
    • 10th Oct 16, 10:49 AM
    • #2
    • 10th Oct 16, 10:49 AM
    Well done for getting back on your feet - that sounds like the first battle won, in any event.

    On sorting out the debt situation your first stop is to do an SOA. (Statement of affairs - link is in the "sticky" post at the top of this board) Until you do that, you have no idea if you "need" to take out a secured loan. Consolidation without knowing what the score is regarding income/expenditure truly IS madness. Frankly, quite often even if you DO know where your money goes, it's still madness.

    Do your SOA - work out where your money is going. If it shows a surplus, then do you have a surplus? If not, you need to log every penny you spend for the next month and see where the money is going.
    MORTGAGE FREE 30/09/2016
    • LMJ10
    • By LMJ10 10th Oct 16, 10:50 AM
    • 109 Posts
    • 86 Thanks
    LMJ10
    • #3
    • 10th Oct 16, 10:50 AM
    • #3
    • 10th Oct 16, 10:50 AM
    Please don't put off having babies because if debt you will regret it forever!!

    I have been in debt for what seems all my life!

    I went into a DMP when my first child was 2 yrs old I now have a 7 month old too, you just make it work with kids.

    Have you thought about a DMP?
    • sourcrates
    • By sourcrates 10th Oct 16, 11:47 AM
    • 8,392 Posts
    • 8,220 Thanks
    sourcrates
    • #4
    • 10th Oct 16, 11:47 AM
    • #4
    • 10th Oct 16, 11:47 AM
    Hi,

    I would view the fact your lender turned you down as a blessing in disguise, questions on consolidation abound on this forum.

    In fact its the biggest single reason a lot of people get into unmanageable debt in the first place.

    If say, your lender had agreed to the draw-down, and you had gone ahead and consolidated, whos to say that a year, maybe two, down the line, you wont be back in the same situation again, having run up more lines of credit.

    This is what invariably happens when you consolidate, because people do not address the basic reason they are in debt to begin with, which is usually because they dont budget correctly, and they overspend.

    You have a £46,000 income, you should be able to balance your budget on that amount of money, without having any debt, except your mortgage obviously.

    I would suggest you do an SOA of your income and expenditure, be brutally honest with yourself, post it up, then people can see where you could make budget adjustments without the need to for further borrowing.
    Last edited by sourcrates; 10-10-2016 at 12:00 PM.

    For free debt advice please call National Debtline on
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    • enthusiasticsaver
    • By enthusiasticsaver 10th Oct 16, 11:49 AM
    • 2,568 Posts
    • 4,377 Thanks
    enthusiasticsaver
    • #5
    • 10th Oct 16, 11:49 AM
    • #5
    • 10th Oct 16, 11:49 AM
    Hmm difficult one. Usually the very worst thing to do is turn unsecured lending into secured. Also if you are struggling now having kids puts massive strain on finances due to maternity leaves usually so the ideal is to be debt free with a savings nest egg prior to maternity leave. However you do need to balance that against the fact you both in 30s which may or may not be a problem with having kids.

    My advice is cut all expenditure to bone and really throw all you can at debt. A secured loan will be more expensive than 0% credit cards and less risky should you not be able to manage loan and mortgage. You were probably rejected as a lot of lenders are now wary about people overcommitting and no guarantee you will use loan to pay off debt or even not build up the debt again anyway. Whatever you really must address the overspending before having kids.

    Post an soa. If you are paying £900 per month then presumably it will be around 2 years before cleared.

    Take no notice of maximum lend. My DD and her husband were offered ridiculous amount on their salaries but they said payments left no room in budget and they have a 1 year old.

    Can you sell anything to reduce debt or take in lodger, second job to get it cleared quicker?
    Debt and mortgage free and saving for early retirement
    • enjoyyourshoes
    • By enjoyyourshoes 10th Oct 16, 1:23 PM
    • 642 Posts
    • 808 Thanks
    enjoyyourshoes
    • #6
    • 10th Oct 16, 1:23 PM
    • #6
    • 10th Oct 16, 1:23 PM
    One of your first steps is to stop the spending that has got you into debt and live within your financial envalope with the recognition that this will get tighter with kids.

    Pay off your 3.4% loan ahead of time if there are no erc. Also calculate what monthly repayments are required to pay off the 0% before deal concludes.

    Work out psychology of spending, do you rationalise before you spend? Do you stop & consider, do I 'NEED' this or merely want it? Does it make you happy ? Is there a longer term goal that is worth condsidering that will break the spending habits?

    Consolidating debts is no good unless you analyse how you can stop spending and how you can pay off the debt in fastest possible time.

    Can you remortgage (not increase mortgage value nor increase term !!) to get lower monthly repayments that can ALL go off to reduce debt?

    If kids, buy off eBay as great cheaper deals on cots/buggies/clothes etc or beg steal and borrow, avoid getting mother and daughter together in any type of baby shop at all costs, cheaper to send them both on a prolonged world cruise !
    Debt is a symptom, solve the problem.
    • Smodlet
    • By Smodlet 10th Oct 16, 1:50 PM
    • 1,820 Posts
    • 3,017 Thanks
    Smodlet
    • #7
    • 10th Oct 16, 1:50 PM
    • #7
    • 10th Oct 16, 1:50 PM
    What sense is there in moving unsecured debt on 0% credit cards to interest-paying debt, let alone to secured debt? That, imho, is another definition of madness, after the one that goes, "repeating the same action over and over, expecting different results". Is that how you keep on building up debt?

    What sourcrates and everybody said: Find out where it is all going and plug the leaks. "Debt is a symptom; fix the problem."
    What is this life, if, sweet wordsmith, we have no time to take the pith?

    Every stew starts with the first onion.

    I took it upon myself to investigate a trifle; it had custard, jelly, soggy sponge things...
    • enjoyyourshoes
    • By enjoyyourshoes 10th Oct 16, 2:16 PM
    • 642 Posts
    • 808 Thanks
    enjoyyourshoes
    • #8
    • 10th Oct 16, 2:16 PM
    • #8
    • 10th Oct 16, 2:16 PM
    What is this life if, full of care,
    We have no time to stand and stare.
    No time to stand beneath the boughs
    And stare as long as sheep or cows.
    No time to see, when woods we pass,
    Where squirrels hide their nuts in grass.
    No time to see, in broad daylight,
    Streams full of stars, like skies at night.
    No time to turn at Beauty's glance,
    And watch her feet, how they can dance.
    No time to wait till her mouth can
    Enrich that smile her eyes began.
    A poor life this if, full of care,
    We have no time to stand and stare.
    Debt is a symptom, solve the problem.
    • sourcrates
    • By sourcrates 10th Oct 16, 3:54 PM
    • 8,392 Posts
    • 8,220 Thanks
    sourcrates
    • #9
    • 10th Oct 16, 3:54 PM
    • #9
    • 10th Oct 16, 3:54 PM
    What is this life if, full of care,
    We have no time to stand and stare.
    No time to stand beneath the boughs
    And stare as long as sheep or cows.
    No time to see, when woods we pass,
    Where squirrels hide their nuts in grass.
    No time to see, in broad daylight,
    Streams full of stars, like skies at night.
    No time to turn at Beauty's glance,
    And watch her feet, how they can dance.
    No time to wait till her mouth can
    Enrich that smile her eyes began.
    A poor life this if, full of care,
    We have no time to stand and stare.
    Originally posted by enjoyyourshoes
    William Henry Davis if I'm not mistaken !!!

    For free debt advice please call National Debtline on
    0808 808 4000
    Monday to Friday
    9am to 9pm
    Saturday 9.30am to 1pm
    • Smodlet
    • By Smodlet 10th Oct 16, 4:09 PM
    • 1,820 Posts
    • 3,017 Thanks
    Smodlet
    So I nicked and adapted it, so deal!

    Apparently, there is no Emily Dickinson poem which cannot be sung to the tune of "The Yellow Rose of Texas" so I would suggest I am in good company.

    "Stealing from one source is plagiarism; stealing from many is research." Herman Brood.

    Enjoyyourshoes, I was (mis)quoting your signature, for which I apologise but surely, the fact I have assimilated your wisdom and shared it is, at worst, flattery? I certainly meant no offence. Had I remembered whose sig it was, I would have given you credit for it.
    Last edited by Smodlet; 10-10-2016 at 4:17 PM.
    What is this life, if, sweet wordsmith, we have no time to take the pith?

    Every stew starts with the first onion.

    I took it upon myself to investigate a trifle; it had custard, jelly, soggy sponge things...
    • MrsTinks
    • By MrsTinks 10th Oct 16, 10:39 PM
    • 14,585 Posts
    • 22,065 Thanks
    MrsTinks
    People say not to wait to have kids... I dont know, and I doubt anyone can truly give you the right answer for you...

    34 is not ancient, friends of mine started their families later than that, others way earlier. I would say right now a year is not the longest wait... how much can you get your deb down in a year? How will your budget look with maternity pay? Child care? Extra cost of said child/children?

    Do a full SOA and people will be able to tell you where you can cut back and how soon you may be able to possibly be debt free...
    DFW Nerd #025
    SPC member #561
    Sept 2016 - £10811 Oct £10166 to clear Cleared Since Sept 16:£645 6% repaid Declutter 25 items in November target: 0/25 Make £10 extra a day in November: £57/£150
    • sourcrates
    • By sourcrates 10th Oct 16, 11:03 PM
    • 8,392 Posts
    • 8,220 Thanks
    sourcrates
    People say not to wait to have kids... I dont know, and I doubt anyone can truly give you the right answer for you...

    34 is not ancient, friends of mine started their families later than that, others way earlier. I would say right now a year is not the longest wait... how much can you get your deb down in a year? How will your budget look with maternity pay? Child care? Extra cost of said child/children?

    Do a full SOA and people will be able to tell you where you can cut back and how soon you may be able to possibly be debt free...
    Originally posted by MrsTinks
    Does anybody ever start a family at the right time ?

    And how do you gauge just when "the right time is" ?

    I'd just crack on and let nature take its course, life is too short to stick to endless deadlines worrying if you can afford it or not, my first child was born at possibly the worst time in our debt crisis, but we managed, and you will too.

    I always think the best decisions are those taken on Impulse.

    For free debt advice please call National Debtline on
    0808 808 4000
    Monday to Friday
    9am to 9pm
    Saturday 9.30am to 1pm
    • enjoyyourshoes
    • By enjoyyourshoes 14th Oct 16, 1:11 PM
    • 642 Posts
    • 808 Thanks
    enjoyyourshoes
    Smodlet,

    I merely recognised the start of your sig & I have always liked the poem, so I thought I would share that with the community. It was meant to 'recognise' what good taste you had, rather than a slur.
    Debt is a symptom, solve the problem.
    • Smodlet
    • By Smodlet 15th Oct 16, 11:17 AM
    • 1,820 Posts
    • 3,017 Thanks
    Smodlet
    Thank you so much, enjoyyourshoes, for the clarification. I thought I was being accused of defiling a work of art, literary vandalism or worse.

    I am truly sorry I misquoted your signature. I shall remember in future and give credit where it is due.

    S x
    What is this life, if, sweet wordsmith, we have no time to take the pith?

    Every stew starts with the first onion.

    I took it upon myself to investigate a trifle; it had custard, jelly, soggy sponge things...
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