Pay off mortgage and start having fun!

Muser1

Crikey NG I bet your head is spinning!

Lots of good advice. Hope it's helping you.

Lots of love Muser

Goldiegirl

Muser1 wrote: »

Crikey NG I bet your head is spinning!

I feel like I lit the blue touchpaper for all this:o


But it's all good stuff to think about.


If the mortgage provider is willing to renegotiate on a repayment basis, I think a longer term would be the way to go.


It'd take a lot of the pressure off, and NG would have the time to set workable budget, build an emergency savings pot, clear any unsecured debts with high interest rates and then go back to mortgage overpaying, along with pension planning.


Also, by taking the pressure off, there's also be time for Mr NG to consider how he's going to make the business leaner, efficient and increase profits.

newgirly

I don't really know the ins and outs of them redundancies , the one member of staff we would prefer to go , has already made it clear he would go at a price. Its a matter of persuading dh to take the hit paying him off. We have already successfully made two other redundant in the last three years and another has been sacked after a long process. The training levels for the job we do are very high and although its not brain surgery it takes a lot of time to be skilled at making the items we do of a high enough quality to sell to the people we do (goverment\royal family etc.)


I tried to change the time of the mortgage appointment as I want the office e to myself as it is in work time. Lucky I rang as they have no record of the booking, they have squeezed me in tomorrow though so I have tonight to make a plan , and have pilfered and copied the business accounts in case they are needed. Will mull over and have a go on the spreadsheet this evening.

CathT

Good luck with the appointment Newgirly. Although I'm sure the posts over the last few days have been a lot to digest, I hope they may have helped with a long term plan which ensures your financial security and gets that mortgage paid off!

newgirly

Cheers cath, the amount of input has been quite a surprise

I am posting some of my financial info, I don't want to post every single detail and may delete some later on as I do feel quite exposed.

Items paid for from income :

All utilities
Council tax
Phones
Sky and tv
Car savings
Insurances
Pocket money kids and dh and £30 for me
£50 Xmas (I've reduced a bit)
£50 birthdays
£70 holidays
Oyster top up for dd

After that lot is paid for we have :

£2,558.63 left

It has to pay for:

Mortgage- current interest payment is £301.53 ( £1839 to clear in term)

0% CCS - current minimums £44.92and £35.80

Food

Petrol

Clothes

Misc.

More detail to follow.

newgirly

Liabilities:

Ducks for cover!

Mortgage £138,138

MBNA cc £3530.66

Santander cc £4442.45

Loan for part payment of factory £32,136

The credit cards ate 0% and the deals end in June and Nov 2016, I had been over paying them but recently stopped to start on the mortgage again. They are the leftovers from the loan taken to pay for the loft conversion, then obviously switched to save interest.

The large loan is one of two loans taken to help buy the factory, we are drawing the payments from the company it was 35k over five years , I did overpay £1,870 a couple of months ago as I was going to clear that first as its a higher rate. I changed my mind as I thought it best to prioritise the mortgage as the loan and cards are not secured. The second loan is 80k and a three year term taken by the company (its Ltd.) Interest only and 33 months left, with a view to being able get a mortgage in three years or possibly making enough to pay cash.

newgirly

Hi blue fire thanks for posting. It was meant to be a plan of everything I would like to cover with the cash available, some of then things are prioritised higher than the mortgage - food and petrol to get to work, oyster and school bus costs, some are a lower priority than the mortgage - holidays etc.

To be honest in the past I have prioritised the mortgage payments first and lived off whats left, sometimes its worked and other times we have gone overdrawn to buy food.

Its going to take a little while to find out what our regular food costs really are, Im keeping a spending diary at the moment to get a more accurate picture.

I was trying to give a picture of my income available without giving everything away, although I think its quite obvious who I am if anyone I know reads this :eek:

getmore4less

Cut to the chase

Your fundamental problem is you don't have a budget

A budget is a plan for where ALL the money goes over at least a year in detail and longer for bigger items with tracking you are keeping to it, something missing add it and rebalance.
Too much is in the catch all or not included at all.

Unless you start budgeting properly you are never going to get this sorted in the time available without more income or an extended mortgage term.

You should have 5 year of data on everything knowing your spends inside out and be able to plan ahead the 7 years needed to pay off this mortgage and other debts.

Your priority order is wrong.

Until you know how much you need for essentials like food the discretionary spends, holidays, presents sky should all be ZERO.

when you overdraw to buy food it is because you have already overspent elsewhere.

It is clear from you posts your current plan/budget is incomplete and too short term and not prioritized sensibly.

I have not recomputed for your CC debts but I think you need to be looking closer to £2300pm debt repayments for the next 12 months.

That's without any company debts but they should be paid by separate money.

AlexLK

First of all, good luck for tomorrow.

Regarding your figures...

You state that the following are paid from your income and my comments are in red "ink":

All utilities £ per month, have you compared costs and switched to cheapest?
Council tax Do you pay for this yearly, in 10 monthly installments or 12?
Phones £, what does it include, have you compared costs and switched to cheapest?
Sky and tv Do you need this or is there some cheaper form of entertainment?
Car savings What are 'car savings'? I presume for maintenance but could be for a new car.
Insurances £££, what for and have you shopped around?
Pocket money kids and dh and £30 for me How much do your children and husband receive?
£50 Xmas (I've reduced a bit)
£50 birthdays
£70 holidays
Oyster top up for dd £££

After that lot is paid for we have :

£2,558.63 left

It has to pay for:

Mortgage- current interest payment is £301.53 ( £1839 to clear in term)
0% CCS - current minimums £44.92and £35.80

Food

Petrol

Clothes

Misc.

OK, the real question is can you do all of this on £638.91 per month?

... well, that was reminiscent of my DFW days ... and if I managed it, I think anyone can.

newgirly

Hi , a few quick answers:

Sky £15pm and we use it a lot, rest TV licence fee
Car savings- tax ins mots etc.
Insurances, pay home yearly-£122 , car £222 and £148
Council tax - already changed to 12 monthly
Phones already switched a d got cash back
Business pays home phone and internet
Utilities - switched and checked on a regular basis
Pockt money : dd £0 ,twins £20pmeach - they get nothing extra ever!
Dh £100, me £30
Oyster -£30 a guess as dd just started 2x internships in london, however if I top up she tries to pay me back!

Alex, I have lived off less in the past before, however the kids were younger and I was a sahm, I used to do surveys, bake bread, make my own clothes washing liquid, Many little things that help stretch our money.Now I'm older , working more , the kids eat more and I am more tired! If I have to do it , I'll just have to get on and do it.

Well I don't have everything I've spent in the last five years, i can try and plan the next seven years of course, but with three kids and a business its difficult to have anything set in stone.

Regarding the debt repayments, they were prioritised over the mortgage , however once I was told in no way can we extend the mortgage , I thought it best to get that paid first and let the debts continue to be paid just making minimums plus a bit extra a few times a month when I can. We have never had a problem switching 0% deals and as they are unsecured I thought the mortgage more important.

My plan for today at least is to charm the mortgage company into letting us extend the term last years accounts show a large profit as we had not yet purchased the building , I'm hoping that may help. As for the length if term, it will be probably as you suggested 15 or maybe even 20 years, with a view to still trying to stick to a lower budget and overpaying. The reason I felt that we may have to have the term decided by the mortgage company was that has happened in the past, before I joined mse we changed mortgage provider to Chelsea (our current) and I wanted to stretch the term to 25 years , they would not allow it due to affordability and made us take a 35 year term.

I'm going to make a final decision on my choice of term once I've looked again at the mortgage spreadsheet this morning.