Haven't posted in a while but ....

uptomyeyeballs

I now have £5,000 in the bank, no credit cards, no loans apart from my mortgage (£70,000), and saving £600-£700 per month on average.

How did I do it? I transferred my expensive CC balances to 0%, then took out a short term secured loan, then remortgaged on a tracker and paid off the secured loan (no huge exit clauses, I picked wisely).

It worked brilliantly, but was a close run thing : the tracker mortgage completed 3 days before they were withdrawn last year!

misspoppy

So you consolidated all your debts and turned unsecured debt to secured debt which is never recomeneded. At least you have learnt your lesson but many don't and simply end up in even more debt as they don't address the spending problems that got them into debt in the first place.

uptomyeyeballs

misspoppy wrote: »

So you consolidated all your debts and turned unsecured debt to secured debt which is never recomeneded. At least you have learnt your lesson but many don't and simply end up in even more debt as they don't address the spending problems that got them into debt in the first place.

It was a just a short term method of shuffling money misspoppy. I had researched a plan before I did it and stuck to it. It made the difference of having no money at the end of the month (hence not being able to increase my rate of payoff) and £700/month which can now be used to pay off the extra mortgage amount.

I'd already realised that something had to be done, but it took a while to organise it overall. It took about 12 months to get things how I wanted them. It fitted my circumstances, but it wouldn't suit everyone. I cut up my cards and cured myself of the spending addiction that caused it in the first place.

misspoppy

I am pleased it worked for you but you made it sound very easy and something that you were recomending, a lot of peoples large debt started in the way you described but they don't cut up the cards or start to save which is why its discouraged.

uptomyeyeballs

Sorry, I didn't mean it to sound that way. It was actually quite hard researching all of the rates, accounts, penalty clauses, loopholes and pitfalls. It was a calculated risk. I was paying so much monthly interest that I had no room for maneouvre until I could reduce the total monthly payments. I then paid off the credit cards and used the money to clear as much of the secured loan as possible before adding it it to my mortgage using my available equity. I am now in a position to pay 10-15% of my mortgage off each year and will be mortgage free by 2016.

I think it's like alcoholism, you need to admit and try to manage the addiction that gets you into that state in the first place before you can move on and get somewhere, otherwise you are doomed to failure.

jenjade

it is just that it worked for you but could be a really really bad idea for others as they could end up losing there homes etc!!

Well done to you! are you a morgage free wanna be now??

uptomyeyeballs

Yes, I suppose I am! And I have also started to supplement my income in other ways to try to make it as quick as possible!

WASHER

I know as a general rule on here, remortgaging your home shouldn't be encouraged, however if you read Martins' advice on the subject he doesn't dismiss the idea of securing your unsecured loans. You have to be disciplined to cut up the cards and not to overspend anymore and repay your "remortgage" off early, it can work well, discipline is the key here.

It seems to me that you didn't take the step lightly, and thats where most people make the mistake "oh, I'll shove it on the mortgage and I'm debt free", it doesn't quite work that way. Overpay your mortgage and it will work, don't overpay and you'll end up paying more in interest and over a longer period of time.

Well done for becoming debt free, its a lovely feeling isn't it?

misspoppy

In think you have done really well but I'd hate for someone in trouble to think this is something DFW's suggest.

Congratulations on turning your situation around.

uptomyeyeballs

I really didn't want to give the wrong impression, apologies again, but I did want to show that it is possible, but I think like WASHER says, you have to have discipline, and I've had great support from here. I never want to go back to the state I was in again.