please help!!! interest only ??

pinkvodkas

Hi

Basically im in alot of debt and i am struggling to make payment each month on mortgage loans credit cards etc, as of yet i have not missed any payment but we have recently done a budget planner and worked out are outgoing which suprise suprise is more than are incomings.

Anyway we have woke up in a mightmare and want to get out of it but dont no really were to start have spoke to our mortgage company who said we could go on a interest free mortgage but we need to contact and IFA and get a letter from them stating we understand this and get a vehicle repayment plan in action,......... WHAT????

We have another loan which is secured against the house and is with First plus which we totally regret taken out but whats do is done.

Any advise is welcome

Mortgage 167,000
First Plus loan - 58,000
Other Loan - 26,000
Credit cards - 11,000

WE DONT WANT TO LOOSE ARE HOUSE BUT WANT SOME ADVISE ON WHAT WE CAN DO TO HELP US GET OUT OF THIS AWFUL WORRYING MESS...... WE UNDERSTAND IT WILL TAKE A LONG TIME

:eek:

di3004

pinkvodkas wrote: »

Hi

Basically im in alot of debt and i am struggling to make payment each month on mortgage loans credit cards etc, as of yet i have not missed any payment but we have recently done a budget planner and worked out are outgoing which suprise suprise is more than are incomings.

Anyway we have woke up in a mightmare and want to get out of it but dont no really were to start have spoke to our mortgage company who said we could go on a interest free mortgage but we need to contact and IFA and get a letter from them stating we understand this and get a vehicle repayment plan in action,......... WHAT????

We have another loan which is secured against the house and is with First plus which we totally regret taken out but whats do is done.

Any advise is welcome

Mortgage 167,000
First Plus loan - 58,000
Other Loan - 26,000
Credit cards - 11,000

WE DONT WANT TO LOOSE ARE HOUSE BUT WANT SOME ADVISE ON WHAT WE CAN DO TO HELP US GET OUT OF THIS AWFUL WORRYING MESS...... WE UNDERSTAND IT WILL TAKE A LONG TIME

:eek:

Hi there

I have heard that CCCS are fantastic and will help you through this, you can check them out on here:
http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Or their own site here:
http://www.cccs.co.uk/

Also free as well, do not be tempted to go with companies that charge you for this where this can be sorted out through organisations such as CCCS all for nothing, good luck, I'm sure you will be surprised, also post on the first thread I posted, you should receive more help and advice.;)

mrcow

Simply switching to an interest only mortgage isn't going to solve the problem. It' sonly going to delay the inevitable whist you get yourselves more and more into debt.

Posting up your SOA on here would be a good start.

And a call to the CCCS should be a priority tomorrow morning. It's a free phone call and could change everything.

di3004

I agree, and the CCCS will also arrange for one of their counsellors to call you, such as a mortgage counsellor, I think this is will be a good start to all your problems going direct to CCCS, they are most helpful.;)

firesidemaid

how much, realistically, is your property worth?

pinkvodkas

we have a valuation due in may last year and it was 200,000

opinions4u

pinkvodkas wrote: »

Basically im in alot of debt and i am struggling to make payment each month on mortgage loans credit cards etc, as of yet i have not missed any payment but we have recently done a budget planner and worked out are outgoing which suprise suprise is more than are incomings.

Ok, the good news is that you are facing in to the situation and you've worked out that it's serious.

Has your income reduced, or have you simply increased your outgoings?

Here's a list of suggestions to consider - they may or may not be appropriate to you:
- walk instead of driving, consider getting rid of the car altogether
- review your supermarket bill ... most people can knock 20%+ off their weekly shop by getting rid of luxuries (e.g. cake, biscuits etc) and switching to cheaper/store brands (we saved £50+ a month on orange juice alone)
- wear a jumper if it goes chilly in the evening, don't turn the heat on unless you really have to
- review water use if you're on a meter, don't leave it running when brushing teeth and if you rinse dishes before washing up try to use the same water from dish to dish!
- instead of going out, make your own entertainment indoors ... family board games can actually be pretty theraputic
- stop leaving telly's on standby and reduce the number of tvs in use in the house.
- don't buy lunches at work, take a sandwich from home (it saves my family around £120 a month)
- how essential is that mobile phone contract when 10 years ago you didn't even have a mobile?
- cancel newspapers, magazines
- give up drink and cigarettes
- drink water from the tap only
- register with survey sites like Valued Opinions to top up your income
- cancel the window cleaner

These are some of the things you can do before you consider underpaying for essentials such as mortgages, council tax and (less essential) loans.

Others on these boards have often recommended the "debt free wannabe" section to people with financial difficulties. I would also recommend contacting CAB (or other free debt advice service) for help too.

Anyway we have woke up in a mightmare and want to get out of it but dont no really were to start have spoke to our mortgage company who said we could go on a interest free mortgage but we need to contact and IFA and get a letter from them stating we understand this and get a vehicle repayment plan in action,......... WHAT????

I assume you mean interest only rather than interest free. Did your lender understand that you are in financial difficulties? It doesn't sound like it. Please name the lender.

One problem they have is that house prices are falling and you already owe more than your house is worth. Every concession they allow you via reduced payments puts their company in to a position where they could lose more money.

Another problem is have you calculated exactly how much this will save you? Even if they agree to interest only for a short term, it may only reduce your outgoing by a relatively small amount.

If your situation isn't likely to change, what's in it for them? If house prices take 3 years to recover is it really fair to expect the lender to wait this long? You really need to find better ways to improve the household budget.

We have another loan which is secured against the house and is with First plus which we totally regret taken out but whats do is done.

This may well have snookered you as it has well and truly placed you in negative equity.

Mortgage 167,000
First Plus loan - 58,000
Other Loan - 26,000
Credit cards - 11,000

WE DONT WANT TO LOOSE ARE HOUSE BUT WANT SOME ADVISE ON WHAT WE CAN DO TO HELP US GET OUT OF THIS AWFUL WORRYING MESS...... WE UNDERSTAND IT WILL TAKE A LONG TIME

Look, I may be tinkering around the edges here, and I would make contact with CAB first before following some of these suggestions, because they will get a better feel for your circumstances than anybody on a messageboard. Some of the ideas below should only really be followed if they will resolve the problem, rather than defer it for a few months.

Basically you need to do two things. Increase your income and reduce your outgoings.

Income:
- can you get any extra hours at work (get a friend to do the school run?)
- can you move to a better paying job?
- can one of the kids get a paper round?
- google UK survey sites and complete market research surveys online
- can any relatives help you by repaying all or part of any loans?
- register with Gap Busters and earn a bit of money doing real customer research
- check if there are any benefits / tax credits that you are entitled to
- make sure you maximise any loyalty schemes (e.g. Tesco, Boots etc) but don't shop in places because they have loyalty schemes, shop there because they are cheaper!

Outgoings:
- cut back on car use, even sell a car and rely on legs or public transport or car sharing with work colleagues if needed
- review your supermarket bill and cut down to essentials only; always shop AFTER eating a meal, never just before (if you're not hungry, you'll buy less); don't buy things like disposable wipes (use cloth and water); perhaps shop with a friend and come to an agreement to split the benefits of BOGOF deals; move to Aldi / Lidl and give up Waitrose / Sainsbury. Buy from the pound shop or cheapo chemist in the local shopping precinct.
- take a packed luch to work
- review all utility bills, gas, electricity, water, phone, mobile, cable/satellite tv, internet. What can be got rid of? Where can you use less? Is it worth switching providers to save money?
- credit cards: what rate are you paying? are you in a position where you can move to a 0% deal for a year or switch to a personal loan with a lower rate?

See if you can get CAB (or another free/charitable debt service) to:
- ring your loan / credit card companies and ask them how they can help
- ring your mortgage lender and stress that you are in financial difficulties and ask them how they can help

If you cannot manage your income up and/or your outgoings down by enough, then you may be left with two very difficult options (be talking with CAB before taking these option)

1) Give up on your unsecured credit and run the risk of a bad credit rating for 6 years and possibly bankruptcy

2) Give up on your house, accept the financial consequences of repossession (and possible bankruptcy) and find somewhere to rent.

I am assuming you have cut up the credit cards and will never get one again (except to arrange manageable 0% deals without increasing borrowing).

It's tough situation.

You really need to address your own spending habits first and make some dramatic cut backs. If a lender can see that your income is less than your outgoings then they will only be able to accept reduced payments for a short period of time.

Don't just do it bit by bit - get radical with your spending habits NOW.

Walking more - £25 a month
Sky - £47 a month
Orange juice - £50 a month (that was my family, I bet yours has something they could stop eating/drinking though)
Packed lunch at work - £40 a month per person
No crisps/cake/biscuits/treats from the supermaket - £30 a month
Lose a mobile phone contract - £30 a month
Drink water instead of anything else - £10 a month

There's over £200 a month in that lot ... and you still have a car and a lot of other things to go at.

Good luck - time to start making your own luck - you've been able to recognise the problem or potential problem for 3 years, judging by your other posts. Why have you not addressed it? What's going to be the trigger this time to do something radical? If you don't you'll end up on the street.

Jonbvn

OP, I would suggest you repost on the DFW board.

firesidemaid

i agree this should be on the DFW board.

you need to post a SOA using the sticky at the top of that board - makes it easier.

the above poster was right though, which is why i asked the value of your house.

you need to stop every tiny bit of non-essential spending, up your income as much as you can and find ways to save money everywhere.

posting the SOA will let the good folks on this forum help you find ways to save money. if you can start to meet all your essential outgoings then you may be ok - you know you will have to change your spending habits drastically, how did the debts accrue in the first place?

again, you do need to speak to CAB or one of the debt charities too for their expert assistance. CCCS or payplan for example - they have an online debt remedy tool so you can see how you stand.

good luck x