HELP and major advice needed.

davey79

Hi, We are in need of some morgage advice and struggling to know where to go. We have our main morgage and have two secured loans also, We have had our morgage with bank of scotland since we were 19 but we got a litlle silly and thought we were richer than we were and spent to much, we have always been on relativly small wages and have always struggled to pay of certain bills on time and because of the two secured loans we took out we are paying just over £800 just on these alone now, thats one of our wages gone for the month. A few years back we stopped our endownment thinking it was life insurance cover and have only been paying bank of scotland interest ever since and our two secured loans despite not missing any payments the total we owe is still the same total we started with. We have scraped our way through now for a good few years but now we are older and wanting to move to a new house and do other things we carnt, We are desperate for some help and advice, any help would be most welcome.

gettingbetter

hi davey

first off dont panic
your in the right place
post up ur SOA and the good
folks on here will pick
it to bits and help you save
www.makesenseofcards.com/soacalc.html

the rest i cant help with
but the real experts will be
along soon

if you dont get many replies
remember its 3am

you have taken the first postive step
by posting and asking for help
the only way is up
from now on

kas xx

thefoolonthehill

Hi Davey

Are you planning on moving to a bigger house? Do you have much equity in your property at the minute?

In my opinion and if it was me (if i had equity) I would look to move to a smaller house - even renting. Sell the house repay the debts with the money made from the house. I would then start saving for a property that i could comfortably afford.

Complete the SOA as GB advises and see if you can make cut backs anywhere.

davey79

gettinbetter.

thanks for the reply, I will fill this SOA form out tomorow and post it up, I think it will take some sorting though, we really need to get finances sorted, we have let things drift along to long now. Plus the fact we cannot get credit or another re-morgage, we thought there is little to help us but battle through and hope for a good pay rise.

davey79

thefoolonthehill,

thanks for the reply.

yes thats what we are trying we have had our 1 bedroom bungalow on the market for a year and a half,

we paid £30,000 endownment

if we combine both out secured loans thats adds up to £32,000

our bungalow was up for £99,000 but is now £84,500

to pay off all 3 loans we would need at least £64,000, now the one problem we are having real trouble with is selling the property because of the credit crunch, people can buy a three bedroom house now for the price we are selling our property, I think the only way we could sell it is if we dropped right down to £70,000, that wouldnt leave us no money or very little to put on a new home or for rent, god I wish we could start all over again.

thefoolonthehill

Hi Davey

Yep unfortunately the economy as is is hurting a lot of people.

two ways you can go in my opinion. Drop the price and sell - obviously you dont want to do this and i would not want to do it either but a 5k profit is a 5 k profit. You could then walk away and start again


second option. wait for the market to recover a wee bit and try and cut back as much as possible - maybe take a second job. once you post your SOA people will tear it to shreds (in a good way). Do you have anything you can sell on ebay?

Is your mtg at the moment set up as Interest only? or are you paying a little bit of principle as well? if not go to the bank and ask them to change it to IO for a wee while.

Obviously the key is to clear the secured loans asap

WASHER

So you have paid £30,000 into your endownment? What have you done with this money, cause it should be still sitting in your endownment.

If its still there and this is my opinion only (not financial advice!) I would cash it in and repay the secured debts. This would enable one to have more disposible income and then overpay on the mortgage to reduce the term and start paying the capital off - remember this is my opinion only - take professional financial advice before doing anything.

What is the third loan for? I see you need £64,000 to repay 3, but I can only find reference to the two secured loans of £32,000.