mortgage mistake

miltonwells

Hi,

i'm young and possibly stupid. I'm a hard working lift engineer, I bought a house about 3.5 years ago with a 100% mortgage because I have an appalling credit rating. It meant borrowing on a fixed 6% rate for two years, i got it changed for another 2 year fixed rate when the time came with cheltenham and gloucester. I owe about 20 grand to northern rock as a loan which went towards the price of the house. I have about 4 credit cards with roughly 4 grand owing, another 10 grand to my bank, plus 6 grand for other things. I earn about 55 grand a year but never have any money left at the end of each month to support my family. I have a good, safe job but am getting further into debt just to get by! it's embaressing having to put a fivers worth of diesel in the car when i want to go anywhere. please tell me what i can possibly do? the worst thing is the amount of interest / charges that appear on my statements. The good thing is that the house is worth only the same as it was when i bought (not less!) anyone with the winning advice, i shall buy a drink!:beer:

chambta

If you had a 100% mortgage how did a £20k plus loan go to the 'price of the house'?

hillcats

First thing I would ask is - Have you worked out all of your expenses for a normal month?
What are your outgoings figures like when compared to your in coming figures?
Are they all Essential? / What non essential item(s) could be cut back then?

Mortgage / Council Tax always first & most important things to be paid, then start by getting rid of the highest rate of interest account first and so on...

beecher2

I'd advise going onto the Debt Free Wannabe forum where you'll get loads of help in working out where your money goes, and on how to cut back. If you post a Statement of Affairs (look at http://www.makesenseofcards.com/soacalc.html to find one) there, they'll help you climb out of debt. Good luck

covmutley

You have a good income, you can sort this. First, stop things getting worse. Perhaps move your credit cards using 0% balance transfers. I just got 16 months with natwest. Perhaps use a separate bank account to live on, so that you always set aside enough to pay bills and challenge yourself to luive cheaply for 3 months.

I have 2 small kids 1 in nursery and we find we never have money left but have stopped worrying about a bit of (well managed) cc debt as it is just an expensive time. Once he goes to school in a couple of years things should be ok for us.

Snippa

Where are you based? If you're in Scotland I'd say you need a debt arrangement scheme, which would stop all the interest and charges and allow you to fix a repayment schedule.

Alternatively, how attached are you to the house, and how much of the problem is the mortgage? If the mortgage is massive, you could consider selling up and downsizing while you shift the debt?

If that's not the issue, I second what was said before - split your debts into priority - mortgage, coucil tax - and the rest.

Radiantsoul

Figure out what you are spending money on.
Decide what you need to spend, and see if you can reduce those expenditures.
Decide what you spend on things you want and stop it.
Use the money saved to repay highest interest debts. Try and move credit card debts to zero interest ones.

miltonwells

hi, just want to say big thanks to all who replied, to clear one issue, the house was 169k, i got a mortgage for 150k and a 20k loan, both from northern rock at the same time to make the total.
I am not too attached to the house, i have worked hard on the garden and decorating, but would quite happily 'downsize' and move if i thought this would make me better off.
I would like to know which way to go? I am worried that most banks would barely let me through the door. Ideally, I would like a new mortgage to cover all loans, debts etc, combined into one and move to a smaller / cheaper property to try and get back on track.
Should I talk to my bank (nat west) or go to a Mortgage Broker, do they offer such things? are mortgage brokers trustworthy? how do you find a good one? (in the yellow pages?)
Once again, many many thanks, this website is excellent

maninthestreet

miltonwells wrote: »

hi, just want to say big thanks to all who replied, to clear one issue, the house was 169k, i got a mortgage for 150k and a 20k loan, both from northern rock at the same time to make the total.
I am not too attached to the house, i have worked hard on the garden and decorating, but would quite happily 'downsize' and move if i thought this would make me better off.
I would like to know which way to go? I am worried that most banks would barely let me through the door. Ideally, I would like a new mortgage to cover all loans, debts etc, combined into one and move to a smaller / cheaper property to try and get back on track.
Should I talk to my bank (nat west) or go to a Mortgage Broker, do they offer such things? are mortgage brokers trustworthy? how do you find a good one? (in the yellow pages?)
Once again, many many thanks, this website is excellent

You need to go on to the Debt-Free Wananbe board and post your Statement of Affairs - no one can give any meaningful advice until you have done so.

lyndasharp

Could you let out a room to increase your income? I'd definitely agree with the other posters - visit the debt free wannabee forum, you will get lots of good suggestions on there!

loopy-juice

miltonwells wrote: »

hi, just want to say big thanks to all who replied, to clear one issue, the house was 169k, i got a mortgage for 150k and a 20k loan, both from northern rock at the same time to make the total.
I am not too attached to the house, i have worked hard on the garden and decorating, but would quite happily 'downsize' and move if i thought this would make me better off.
I would like to know which way to go? I am worried that most banks would barely let me through the door. Ideally, I would like a new mortgage to cover all loans, debts etc, combined into one and move to a smaller / cheaper property to try and get back on track.
Should I talk to my bank (nat west) or go to a Mortgage Broker, do they offer such things? are mortgage brokers trustworthy? how do you find a good one? (in the yellow pages?)
Once again, many many thanks, this website is excellent

First rule mate is to stop thinking you can borrow to get out of debt!

Prioritise your debts, speak to the people you owe money to and arrange a repayment strategy with them. They will listen. Downsizing is an option but in this climate it may cost you a few quid. Take a mortgage holiday for 12 months and concentrate on paying your debts. You have a very good income to be able to do this.