£100k debt in 7 years

DarkConvict

Button21 wrote: »

10past6.....no honestly....don't worry.....blunt replies welcome! I am honesly trying to be as honest and direct as possible! They don't have a computer or internet access.......again, no luxuries......

This is why if I try and get to the bottom of where their money goes, I might be able to help them.

Her husband won't talk about it.....I think he is burrying his head and just blaming her for running up the debt.

*Slap* I forgot to mention about that.

National Debtline and CCCS are free debt charities, you can talk to them in confidence and they are professional trained. They would help them if they are not willing to personally come here.
And to reiterate, they are free!

Button21

hi my name is poppy and i am the person this thread is about. thanks to everyone who has written back to button about me.

i went to see a mortgage adviser today but myself and my husband cant get a mortgage together because of my bad credit rating. it failed on the credit score. the man said we could get one in my husbands name only and take me off the title deeds to the house until my credit file is clear.

he said that it is my best option to pay off all our debts and put them all onto a lower rate mortgage??

thank you for reading.

poppy

WASHER

Button21 wrote: »

hi my name is poppy and i am the person this thread is about. thanks to everyone who has written back to button about me.

i went to see a mortgage adviser today at the halifax but myself and my husband cant get a mortgage together because of my bad credit rating. it failed on the credit score. the man said we could get one in my husbands name only and take me off the title deeds to the house short term for the next two years max until my credit file is clear.

he said that it is my best option to pay off all our debts and put them all onto a lower rate mortgage. here are our debts....

loan £15k @ 13%
credit card £8k @ 16%
mortgage £75k @ 2.7%
overdraft £2k @ £1 per day

the mortgage he could give my husband is around 3.7% for 30 years - is this not better to do this than keep paying high rates?? if we borrow £115k we will have a 65% loan to value.

thank you for reading.

poppy

Poppy, NO CONSOLIDATION isn't the answer, it rarely works and the debts will cost you more in interest in the long term. The bank are also advising you to turn unsecured debt into secured debt, this can be dangerous, you could lose the house if you cannot afford your new remortgage.


PLEASE PLEASE think about what I have said, the bank may not have your best wishes at heart, just profits!

WASHER

Poppy, I forgot to mention also, YOU NEED TO SEEK LEGAL ADVICE before removing yourself from the deeds of the house if you do get the remortgage - it could have a huge impact on you, if you and your husband spilt up. The CAB can offer you some advice.

Edit: Seek advice from a debt charity like the CCCS, before you make a decision to remortgage, they can help you with advice on how to repay the debts without remortgaging.

JA1000

DO NOT REMOVE YOURSELF FROM THE DEEDS

JUST STOP SPENDING!

If you remortgage you think you can do it again and again. It's now time to stop and listen to the advice on this forum

As previously posted you have spent £1600 per month more than you have stated on here for 7 YEARS!!!

You are not in a bad situation and much better than a lot of people on here, just compared to where you were it looks bad. You have enjoyed yourself for 7 years to 'keep up with the Jones'' Now it's time to pay for it and you have the means to do it. See it as a challenge it's more rewarding than the spending.

Oh and I can guarantee the Jones' are in the sh*t too but they are not telling you and it doesn't matter.

Good luck, you have started by coming on here so get the OH involved and set about budgeting.

smartpicture

Button21 wrote: »

he said that it is my best option to pay off all our debts and put them all onto a lower rate mortgage.

Well he would say that, wouldn't her? He's in the business of selling mortgages, that's how he makes his money. That doesn't mean that it's the right thing for you

Button21 wrote: »

the mortgage he could give my husband is around 3.7% for 30 years - is this not better to do this than keep paying high rates??

Even though the interest rates will be lower, you will actually ending up paying more interest because you are paying it off over a longer period, so no, it's not better. Plus, it increases the overall debt you have which will still have to be paid back at some point (or lose the house). And finally, getting your name taken off the deeds is a very, very bad idea for you personally.

Also, no offence, but as you've remortgaged twice before to solve all your problems, why do you think a remortgage will work this time when it hasn't before? People on here are trying to help you, without judging you, to see that the only thing that will work is addressing what you are spending the excess money on and cutting back so you are living within your budget. The solution is a change of mindset rather than a temporary influx of money which just means more debt which will all have to be repaid at some point, and this site can help guide you towards that mindset if you're willing to let it.

I know it's stressful, but it's a lot less stressful if you feel that there are people out there helping you, and people who been through similar things and come out the other side debt-free. Good luck.

Button21

thank you very much to everyone who has wrote back. it is very nice of you all to take the time. can anyone tell me why it is cheaper and show me how to work it out. i just don't understand why it is more expensive when the mortgage rate is much lower? i am not too good with money as you can see.

thanks again

poppy

JasX

Button21 wrote: »

can anyone tell me why it is cheaper and show me how to work it out. i just don't understand why it is more expensive when the mortgage rate is much lower?

Tightening your belt and putting the £400 per month surplus to paying off the £8,000 card at 16% APR

http://www.makesenseofcards.com/calcpay.html

Result:-> Your monthly payment of £400 will take 24 months to clear the debt and you will pay a total of £1256.85 in interest charges. Total repaid £9,256.85

Putting on your mortgage for 30 years at 3.7% (and interest % very likely to go up in future)

http://www.thisismoney.co.uk/true-cost-mortgage-calculator

Result:-> Monthly Payment £36.82 at 3.7% (IF it stays that low for 30 years) Total Interest over 30 years £5,256.15. Total repayment £13,256.15 (plus any arrangement/legal fees you need to pay up front)

That is why the mortgage is more expensive.

Albert_Einstein wrote:

""Compound Interest is the most powerful force in the universe*""

Plus you've yet to work out where the missing £1,600 per month is disappearing to that has resulted in you not saving £400 every month for the last 7 years but slipping deeper and deeper into £100k debt over that time

I struggle to think where that much money could disappear to, not be noticed and have no assets to show for it????

Supporting a loss making business?
taking £19,000 holidays every year?
Gambling or Drug problem?
School Fees for Eton?

there are few things that can swallow that much money and not leave anything material to show for it.

If you cannot work out where that money is going there is no reason to suspect the unsustainable remortgage, credit card, remortgage, credit card.... etc cycle willl not keep repeating itself till you've 'spent the house' as it were and it gets repossessed.


*yes I know this is very often attributed to him but dubious evidence as to where/when he actually said it. http://www.snopes.com/quotes/einstein/interest.asp

immoral_angeluk

Hang on, I'm confused, so have they got 2 houses then? Or did they take out a mortgage on the home they were given and then keep remortgaging? If so what the hell did they spend all the money on??

planning_ahead_2

immoral_angeluk wrote: »

Hang on, I'm confused, so have they got 2 houses then? Or did they take out a mortgage on the home they were given and then keep remortgaging? If so what the hell did they spend all the money on??

I think they only have one house - but kept remortgaging.

As for asking what they spent the money on....does it matter now - they just did spend it:huh::huh: Break it down and £107k over 7 years works out at about £42 a day over spending. That isn't hard when you are living the lie, and believe it, that you can afford the lifestyle you have.

In fact you could be asking me that very question. I started with about £60k mortgage on my home in 2000 and have consolidated a number of times and increased the mortgage to £126k (so there is £66k of 'what did I spend it on' - because none of that was for extensions or major home improvements....just consolidations):( I am also sitting here with £44k of unsecured debt......so in ten years I have spent £110k somewhere, on something and have nothing but debts to show for it.

I think there are probably more people than we realise in similar situations. However, it doesn't matter now what it was spent on, as long as the LBM has clicked into place and the people in debt do something - with the fab support from this forum - to sort it out and move forward to a debt free life.