Where To Start !!!

ajay_3

here goes I have recently completed and IVA and am now looking for some advice from you luvverly people.We (my wife) have a current account mortgage with the rbs and think it is pretty good we are currently running at about 58000 and the property is worth about 160000 the problem is that we have credit card and store card debts totaling 18000 these have now been dumped and it was painfull as I had to surgically remove some of the store cards from my better half !!.I am not on the mortgage and rbs wont let me on this type and say we will have to take out one of there other mortgages if I am to be on a joint mortgage.Our joint incomes are in the region of 44000 p/a.What we want to know is whats the best way to repay all of our debt and just have one monthly repayment.W ould like to go for a re-mortgage but as I have said we really like the one with rbs.Also my credit rating is slightly dubious and as I was self employed went into an iva and am now a director in a 2 man ltd company that has been trading for a year I could really do with some practical advice...looking forward to replies ...AJAY:eek: :eek: and thanks for taking the time to read this

Mrs_Optimist

My thoughts are that on the earnings you have you should be able to pay off the credit cards/store cards by transferring them to o% rate. Do not be tempted to add to the mortgage - you may have one monthly payment but, with respct, you do not sound as if you are going yet in a position to be able discipline yourself (or your wife) not to run them up again. Also the extra interest you will be paying on the mortgage alone will rocket. As I said, just my inital thoughts, but someone else may come along with a different viewpoint.

bargainbetty

Hi Ajay,

Welcome - hope this is of some help.....

If you have a mortgage of 58k on a property worth 160k, then remortgaging would probably be a sensible long term option, as you can get some really good deals at the moment. If RBS don't want to help, go elsewhere! Why should you give loyalty to a bank that isn't helping you? If your OH's credit history is ok it will count for something, but have as much of your own paperwork available for checks as you can.

For what it's worth, I got a great fixed rate from Alliance and Leicester. I can make a one-off overpayment each January (honest I will next year maybe) so I know exactly where I am month to month. Makes a huge difference to me!

If you are willing to play the credit card tart in the meantime, it's worth doing for the couple of months it might take to get the mortgage sorted out, just to save on the interest. It would mount up a lot on that amount!

I wish you good luck mate, but remember - don't do what I did and go a bit nuts the first couple of months after remortgaging. Paid for it about six months later....

All the best,

in*the*red_6

I would agree with mrs optimist, you have a decent income and must have quite a low monthly payment on your mortgage so your disposable income should be good enough to snowball with. See if you can get 0% or low rate life of balance deals on credit cards in your wife's name and balance transfer them. Work out how much you can afford to chuck at your debts each month and hammer them down that way. You'll pay less interest than adding to your mortgage over a longer term plus you'll be debt-free (aside mortgage) much sooner. It should also help the discipline to keep to a budget which remortgaging wouldn't address.
HTH
P.S. Here's information on snowballing and the snowball calculator http://www.whatsthecost.com/snowball.aspx

lynzpower

What do you mean you have just completed an IVA? NOt familiar with that?

ajay_3

thx everyone for the great advice.
I have considered moving to 0% but is there one that will take all the debts on balance transfer or do we need to use a couple..
As for iva it stands for individual voluntary arrangement.. a little like bankruptcy but not.If you want more in depth info let me know...thx again guys. ANDY

nelly_2

First of all, Why one payment is it lazyness? (which I am myself) ease of use?

Putting it on 0% is by far the best route.

Lumping it on the mortgage is not.

you say your house is 58 grand
well get the monthy figure times it by 12 then by twenty five + the deposit.

I bet its over 100 grand people think a mortgage is at 5% but the real amount you are paying out shows it too be closer to 200%.

Which is why every other advert on TV is borrow off us and add it too your mortgage, it the most expensive money you can borrow.

Fair enough it can lower your monthly out goings, but, it massively increases what you pay back long term.

Go with a few 0%'s put a bit of effort in and pay a decent amount each month NOT the minimum payment.

Read this

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> http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1095079865,8297,

to see why minimum payments are very bad for you.

ajay_3

thx again for the advice still not sure about which way to go.
The mortgage is 58grand over 15yrs looking to add on about another 30grand pay off all the debt and do some much needed renovation.Currently the house is worth about 160grand the improvements should put about another 20grand on.We are currently paying in the region of 600 a month on card repayments and the same on the mortgage repayment.We still think its best to add on to the mortgage at 15 yrs and that is probably the way we will go unless someone can prove to us that carrying on with paying credit cards even at 0% is the best way forward.
Look forward to more very helpful advice....A

lynzpower

What Im not understanding is with the IVA, you have just started one? Or have you just completed one & ran up this debt again? sorry this is the bit i dont get

Dont add it to your mortgage, for all the reasons nelly says.

sarah0404

I'd say the 0% cards were the best way forward. I bet if you worked really hard at it you could have them cleared off in as little as 2 years. Of course you'd need to switch cards a few times to keep the 0% balance transfer rates, as most only last 6 to 12 months.

We've got £32,000 of debt on credit cards and loans. We plan to have it paid off by December 2009, using 0% cards as much as we can. We have an income of just under £15,000.

Do look at the Snowball debt calculator. It will work out the best way to pay back your debts so you pay the least interest. It will also tell you how much interest you'd pay if you added your debts to your mortgage. It would cost me £22,000 in extra interest alone to add my debt in to a mortgage!!!

We have been down the consolidation route before. It seemed so handy to have one low monthly payment for the next million years and just forget about it all. But we didn't address our overspending problem at all. So within 6 months we had another loan and £500 on the credit card. I got to the point where I couldn't increase my overdraft any more and my card was refused at Asda when I tried to buy some milk and bread. We had to live off porridge and beans for 4 days till my partner got paid. Not very nice at all!!! Then I knew we REALLY had to do something about the way we handled our money. Not saying this will happen to you, but just be aware that it might not solve your problems.

Good luck!

ajay_3

thx again for the advice it all helps
as for the iva I have just come out of one.I was a self employed sole trader in construction and owed mostly to the bank and the taxman these were all debts to do with me and my business the debt we have on the cards have nothing to do with that as the cards are in the oh name only..