Any advice for this option please.

coworcoo

Thanks Magentasue and skintchick,

Yes you are both correct I can make savings in the areas you have suggested. I will take your advise and have a good look at the utilities section among others.

As you both say once the mind set has changed you look for savings where you can get them. I'm sure our estimates of costs for food and clothing are high so making savings here will be a benefit.

Finding Martin's site and the forums here with such helpful and friendly people has been a very positive thing for me. I'm sure I will continue to learn from you all and hopefully with a bit more experience be in a position to help out some others.

Thanks again.

Regards
coworcoo

dinkylou

Coworcoo,

Your posts have worried me.

I think that you see this option as a 'solution' to your debt.

You have already told us previously that

'We also have a couple of loans that were previous attempts at consolidating some debt.'

'I see this as a one time only option. I am determined that we won't be in this position ever again.' - BUT you already have been.

What makes you think it will solve all your problems this time when you have done this before?

Also I think you ve convinced yourself that this is the best option as its the easiest. If you look at nearly all the posts so far for you, they are all saying ' DON'T DO IT' but you are not taking their advice.

This in your post is also worrying -

'Once we have built up a fair amount we intend to make perhaps an end of year lump sum overpayment towards the mortgage. Hopefully doing this where possible will offset the action of re mortgaging now to some degree.

- you dont seem certain, you need to be determined if you are to reduce the debt.

The one exception to this would perhaps be 0% interest free offers but only if we have the cash in the bank to cover for the full amount.

- I know that emegencies happen but this is the way that you are going to fall further into debt.


I know this may come across as harsh and its not meant that way but I dont think you are feeling the 'pain' of this debt and are assuming that you can easily solve it without making sacrifices.

Bestthingsinlifearefree

HI Cowcoo,

I can see the logic in your strategy and it does give you a fairly painless solution.

Also good to see you are taking control and giving serious thoughts to the issues.

What are you palanning to do with your endowment policy (if you change to a capital & interest mortgage you won't now need it to pay the mortgage).

Think carefully before surrendering it or stopping the premiums as I understand that most of the bonus etc are added at the end of the policy. ie it might be worth you continuining it

Certainly I would investigate the implications of this thoroughly.

The other points is why not post the break down of the 40K debt on here.

ie amount of debt,term of debt,interest rate etc etc

and then at least see what other suggestions members can make rather than whack it on the mortgage.

Yes a £700 or so mortgage is affordable on your income and would get rid of all the credit card debt etc etc

.............BUT most people who cosolidate their debt just run up fresh debt.

What life style changes have you committed to so far to reduce your spending levels ??????????????????????

Sorry to nag but we have your best interests at heart) .........

("best interests"..nice unintended financial pun there!!!)

Bestthingsinlifearefree

HiCoworcoo,

I have reread your posts and you do mention you arekeeping your endowment policy going AND switching to a capital & interest mortgage.

In my experince you have made 2 good decisions there and I agree with both moves.

However in reagrd to the consolidation of the cc debt onto the jury is still out its a fifty / fifty decsion until we see the break down of the CC debt etc etc

Also I notice even WITH the CC debt you are only minus 243 pounds each month. I reckon by restructuring this debt / snow balling you may well be able to tackle it without putting it ALL on the mortgage.

You mentioned did you do the right thing buying the house. ?

YES best thing you ever did it is buying the house that has enabled you to have a escape plan. ie the increase in house prices has allowed you to use your equity to cancel your debt. But that was through good luck / timing in buying in a rising market.

skintchick

In my personal experience putting things on the mortgage only makes for pain later on.

I did it with my car, which I'm still paying off, I have done it in the past with ccs, with overdrafts, with a new kitchen...

I've learned my lesson now. NEVER again. If I can't afford it, I can't have it. End of.

It's because mortgages don't feel like debt, but legitimate owings, so you justify it to yourself.

coworcoo

Thanks for all your posts so far:

Thanks dinkylou

I don't see your post as being harsh at all. Up until a week and a half ago I thought our family was doing fine. We had a reasonable income, three bedroom semi in a good area, a good local school, a street where the kids are safe enough to go out and play. Sure we still needed to get new windows and decorate the parts of the house we have not reached yet and yes we have struggled to get to this point with having the kids. We never seem to have any money left over at the end of the month either and I know we should really try and save. I wonder where all our money goes? I know it does not go on luxuries or holidays. I should really try and sort the finances out, perhaps we can save some money off the bills. Once the "big loan" is paid up in May things will be different.

Well that was a week and a half ago, since then I have found out exactly where our money goes every month. I found out that 1100 pounds of it goes towards paying credit card bills for 40,000 pounds.

To be honest I feel sick to my stomach even writing that figure. It feels like I should always keep moving because if I stop the panic of the situation will overcome me. I'm a 39 year old male who feels a bit of a failure at the moment. My tears aren’t helping so yes I'm looking for a solution.

My options:

Walk away from the situation or stay and fight to secure the families future. Well I won't walk away, I'm here to fight.

'What makes you think it will solve all your problems this time when you have done this before?' Well I'm in charge now and If I fail then the family fails and I won't let it happen. My wife and I have three children to raise. That is three reasons right there.

'I think you ve convinced yourself that this is the best option as its the easiest' It won't be easy but might be affordable. I need to pay somebody back 40,000 plus interest. I guess it comes down to the cheapest interest rate I need to pay.

Re: mortgage overpayments 'you don't seem certain, you need to be determined if you are to reduce the debt' Yes you are correct, I am a little unsure of the way in which overpayments are done. If you can make yearly one off large payments or does it have to be done with additional monthly payments. We will be making overpayments one way or another.

Re: 0% free offers 'I know that emergencies happen but this is the way that you are going to fall further into debt' What I am thinking about here is the scenario say if you need some new item and the seller if offering it over 6 months interest free credit. If you have the money to pay for the full amount, is it a good option to take while you keep more of your own cash in your own bank account earning interest? Just a thought.

'I know this may come across as harsh' not at all dinkylou I thank you again for your help. I need to get this sorted now and forever.

Bestthingsinlifearefree

Thanks for your input.

'Think carefully before surrendering it or stopping the premiums' yes I'll get to the bottom of their value etc. I will be keeping them going in the meantime. There is very good info here in other parts of the forum so I won't make a move without a few posts. I need to set our finances/debt straight first and clear my head before I can "worry" about anything else.

'why not post the break down of the 40K debt on here.' I should do that but I would need to get the information from my wife, I'm not sure if she has it all to hand. The bottom line is though I owe somebody 40,000. I think I would rather owe the money against the mortgage at mortgage interest rates rather than credit card companies at their high interest rates.

'BUT most people who consolidate their debt just run up fresh debt' I'm in charge now. It won't/can't happen. If I don't get this sorted correctly then we lose the house, the family. Failure here is not an option.

'What life style changes have you committed to so far to reduce your spending levels' Well the costs are as you see them above with scope to make some savings on those figures. I was over estimating our costs for the purposes of working out our proposed new monthly figures. I need to make sure that we can afford the mortgage and pay the normal essential family costs/bills. Our money left over at the end of the month will be saved. I am determined that we can save at least 500 a month. With these savings I can make overpayments into the mortgage. We will never have credit cards in this family again. Anything bought out with the normal family running costs will be saved for first. Our family is complete now and I could not be any happier with our children. When our youngest is older my wife will increase her hours so that should be an income increase to look forward to.

Sorry Bestthingsinlifearefree I was replying in order so have answered your first post that you clarified for yourself regarding the endowment policies.

'However in reagrd to the consolidation of the cc debt onto the jury is still out its a fifty / fifty decsion until we see the break down of the CC debt etc etc' To be honest here I really want to cut these companies off at the knees. I want rid of their hold on us and I never want to deal with them again ever. If I take our repayment fight into the mortgage I know I am securing our house against the debt but this will be the only time I ever do this. It can't get any more serious than the risk of losing the house. Would it really be cheaper in the long run to fight the 40,000 of debt at credit card interest levels rather than at mortgage interest levels? Using the mortgage route I have 500 minimum to fight with each month rather than -243 with the credit card route. If our debt was at the 10,000 level I would be tempted to go the snowballing route but at 40,000, my god I still can't believe that figure.

Thanks Bestthingsinlifearefree It is very kind of you to post. I do appreciate every response here.

Skintchick

Thanks for your posts. We won't be having any non essential items we can't afford. Anything of this nature will be saved for and bought. I totally agree, if we can't afford it we can't have it.

Thanks again to you all

Regards
coworcoo

skintchick

Have you tried a spending diary? I discovered I was buying magazines and lots of booze!! HAve stopped that now and ma in budget every time!

Just write down EVERYTHING you spend for a month - it'll shock you!

Bestthingsinlifearefree

coworcoo wrote:

Thanks for all your posts so far:

Thanks dinkylou

I don't see your post as being harsh at all. Up until a week and a half ago I thought our family was doing fine. We had a reasonable income, three bedroom semi in a good area, a good local school, a street where the kids are safe enough to go out and play. Sure we still needed to get new windows and decorate the parts of the house we have not reached yet and yes we have struggled to get to this point with having the kids. We never seem to have any money left over at the end of the month either and I know we should really try and save. I wonder where all our money goes? I know it does not go on luxuries or holidays. I should really try and sort the finances out, perhaps we can save some money off the bills. Once the "big loan" is paid up in May things will be different.

Well that was a week and a half ago, since then I have found out exactly where our money goes every month. I found out that 1100 pounds of it goes towards paying credit card bills for 40,000 pounds.

To be honest I feel sick to my stomach even writing that figure. It feels like I should always keep moving because if I stop the panic of the situation will overcome me. I'm a 39 year old male who feels a bit of a failure at the moment. My tears aren’t helping so yes I'm looking for a solution.

My options:

Walk away from the situation or stay and fight to secure the families future. Well I won't walk away, I'm here to fight.

'What makes you think it will solve all your problems this time when you have done this before?' Well I'm in charge now and If I fail then the family fails and I won't let it happen. My wife and I have three children to raise. That is three reasons right there.

'I think you ve convinced yourself that this is the best option as its the easiest' It won't be easy but might be affordable. I need to pay somebody back 40,000 plus interest. I guess it comes down to the cheapest interest rate I need to pay.

Re: mortgage overpayments 'you don't seem certain, you need to be determined if you are to reduce the debt' Yes you are correct, I am a little unsure of the way in which overpayments are done. If you can make yearly one off large payments or does it have to be done with additional monthly payments. We will be making overpayments one way or another.

Re: 0% free offers 'I know that emergencies happen but this is the way that you are going to fall further into debt' What I am thinking about here is the scenario say if you need some new item and the seller if offering it over 6 months interest free credit. If you have the money to pay for the full amount, is it a good option to take while you keep more of your own cash in your own bank account earning interest? Just a thought.

'I know this may come across as harsh' not at all dinkylou I thank you again for your help. I need to get this sorted now and forever.

Bestthingsinlifearefree

Thanks for your input.

'Think carefully before surrendering it or stopping the premiums' yes I'll get to the bottom of their value etc. I will be keeping them going in the meantime. There is very good info here in other parts of the forum so I won't make a move without a few posts. I need to set our finances/debt straight first and clear my head before I can "worry" about anything else.

'why not post the break down of the 40K debt on here.' I should do that but I would need to get the information from my wife, I'm not sure if she has it all to hand. The bottom line is though I owe somebody 40,000. I think I would rather owe the money against the mortgage at mortgage interest rates rather than credit card companies at their high interest rates.

'BUT most people who consolidate their debt just run up fresh debt' I'm in charge now. It won't/can't happen. If I don't get this sorted correctly then we lose the house, the family. Failure here is not an option.

'What life style changes have you committed to so far to reduce your spending levels' Well the costs are as you see them above with scope to make some savings on those figures. I was over estimating our costs for the purposes of working out our proposed new monthly figures. I need to make sure that we can afford the mortgage and pay the normal essential family costs/bills. Our money left over at the end of the month will be saved. I am determined that we can save at least 500 a month. With these savings I can make overpayments into the mortgage. We will never have credit cards in this family again. Anything bought out with the normal family running costs will be saved for first. Our family is complete now and I could not be any happier with our children. When our youngest is older my wife will increase her hours so that should be an income increase to look forward to.

Sorry Bestthingsinlifearefree I was replying in order so have answered your first post that you clarified for yourself regarding the endowment policies.

'However in reagrd to the consolidation of the cc debt onto the jury is still out its a fifty / fifty decsion until we see the break down of the CC debt etc etc' To be honest here I really want to cut these companies off at the knees. I want rid of their hold on us and I never want to deal with them again ever. If I take our repayment fight into the mortgage I know I am securing our house against the debt but this will be the only time I ever do this. It can't get any more serious than the risk of losing the house. Would it really be cheaper in the long run to fight the 40,000 of debt at credit card interest levels rather than at mortgage interest levels? Using the mortgage route I have 500 minimum to fight with each month rather than -243 with the credit card route. If our debt was at the 10,000 level I would be tempted to go the snowballing route but at 40,000, my god I still can't believe that figure.

Thanks Bestthingsinlifearefree It is very kind of you to post. I do appreciate every response here.

Skintchick

Thanks for your posts. We won't be having any non essential items we can't afford. Anything of this nature will be saved for and bought. I totally agree, if we can't afford it we can't have it.

Thanks again to you all

Regards
coworcoo

Hi Coworcoo,

That is a great reply and I am sure your fighting spirit will inspire others.

I agree you have the most powerful motivation of all not to run up fresh debt after the consolidation of the CC debt on to the mortgage ie your wife,children and house.

If you and your wife take this on as one team ie keep the spending diaries,keep the discipline etc you will be fine as a £700 mortgage of your income is perfectly manageable and you can still have a good standard of living.

After reading all your posts, reading your logic and seeing how you have listened to other opionions / analysed the situation etc etc.

My gut feeling is you seem very switched on and are going to be just fine , if you and your wife keep up this motivation and focus. I think you have learned your lesson.

I think putting the CC debt on the mortgage seems to to be the best route, learn the lesson and never,nveer take out a CC or loan again.

With your income and even with the £700 mortgage etc you can save a few hundred every month for holidays,car upgrade and house repairs and pay cash.

Keep up the good work and you are going to fine.

Let us know how you get on.


Good luck ! I wish you well.

roversbabe

skintchick wrote:

Have you tried a spending diary? I discovered I was buying magazines and lots of booze!! HAve stopped that now and ma in budget every time!

Just write down EVERYTHING you spend for a month - it'll shock you!

Very true Skintchick - I did that and was shocked to find out how much I was spending on magazines, lunches and on going to the pub.

That's the best way to find out where you can cut back.

OP - you sound really determined and positive. Good luck to you and I'm sure that you can do this.

rb x

coworcoo

Thanks for your words of encouragement, skintchick, Bestthingsinlifearefree and roversbabe.

Please continue to offer your advise and help in these forums to everyone where you can.

I don't know if you realise the help you have provided to me in taking an interest in my problems and taking the time to post but let me just say again how grateful I am to everyone that has posted here.

Thank you.

Regards
coworcoo