Should I pay for independant financial advice?! Dont know what to do...

jayjay33

Can anyone offer advice please? Considering paying for financial advice but dont know if its applicable in our situation. We are in debt but not to the extent we cant meet our repayments on loans/credit cards etc.

We have a 100% mortgage, house was bought for £160,000 in September 2007 and we currently owe £156,000. Our house is very likely to be in negative equity now unfort. We had to go interest only for 9 months whilst on maternity leave and still months later trying to work out whats best to do with regards to paying off debt. We have £13k car loan at 7.9%, due to be repaid back in July 2014 and another car loan of £5500 at 7.9%, due to be repaid in August 2014 as well.

We have approx £6000 on credit cards-£5000 on barclaycard 6.8% for life and £1500 on Tesco, interest free period due to end at any point now.

Issue is we can make all repayments etc, we are paying £100 a month extra onto our mortgage until we decide way forward. Our house is tiny and we would do anything to be able to move, we dont liek the area we live in and need to move for better schools and more space for the little one, we want another baby in the next few years. However we are able to wait on the baby front is necessary but have to bear in mind when we have the next one, its maternity leave and childcare costs again of £600 a month.

The main issue is we cant remortage our property if interest rates shoot up, our current rate is 2.49% and im well aware we shoudl have really been making the most of this but for numerous reasons it has not happened. So question is do we concentrate on paying the 5% loan that was attached to our mortgage to make it 100% thus making a chnace of remortgage easier or do we pay off all credit cards or do we do part and part?

Is this somethign we should discuss with a financial advisor? We have around £500/£600 at the end of the month spare to pay off debt, i have checked everything we pay out each month to see where we can make savings, our bills are actually quite cheap. We have a couple of things on interest free credit, sofa which is £37 a month and is paid in 2.5 years and a dining table for £21 a month, fully paid off in May, i know these are cheap debt but then it would free up more money to pay off other things at the end of the month too so as you can see, my head is all over the place. I dont want to make any more bad decisions (unlike buying this house). We had bought an apartment in 2006, brand new, had to part exchange it just to sell it and had to come here so its been bad thing after the next.


Anyone recommend any ways forward? Would be really grateful for any advice....thanks so much

Kate

bottleofred

Good Morning Kate,

The first thing you should probably do is post your statement of affairs to see if you can get any additional help/advice in saving more cash to go with the £500-£600 you've already got left each month. Use the link below:
http://www.makesenseofcards.com/soacalc.html
Regarding the financial adviser, there are many of them who don't charge you as they get paid by the companies themselves when selling their packages. While you'll need to keep your wits about you when dealing with them, I've dealt with similar companies twice before and have few complaints.

Good luck

jayjay33

Thanks alot Bottleoffred, hope i have put everything in correctly! Our bank alliance and leicester have said they would look at porting over our negative equity to a bigger house dependant on how much but we would need a deposit as well so another issue!

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 2100
Benefits................................ 117
Other income............................ 0
Total monthly income.................... 3817
Monthly Expense Details
Mortgage................................ 325
Secured/HP loan repayments.............. 55
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 118
Electricity............................. 23.5
Gas..................................... 18
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 15
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 55
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 20
Petrol/diesel........................... 220
Road tax................................ 25
Car Insurance........................... 132
Car maintenance (including MOT)......... 50
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 550
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 4.5
Life assurance ......................... 55
Other insurance......................... 7
Presents (birthday, christmas etc)...... 40
Haircuts................................ 15
Entertainment........................... 30
Holiday................................. 125
Emergency fund.......................... 75
Total monthly expenses.................. 2515

Assets
Cash.................................... 500
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 155500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 148000...(325)......2.49
Secured Debt.................. 7500.....(55).......5.94
Total secured & HP debts...... 155500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco loan ....................5500......137.......7.9
AA loan .......................13000.....328.......7.9
DFS sofa.......................1000......37........0
Tesco credid card .............1428......47........16.9
Barclaycard....................5100......43........6.8
Harveys funniture..............189.......21........0
Total unsecured debts..........26217.....613.......-

Monthly Budget Summary
Total monthly income.................... 3,817
Expenses (including HP & secured debts). 2,515
Available for debt repayments........... 1,302
Monthly UNsecured debt repayments....... 613
Amount left after debt repayments....... 689
Personal Balance Sheet Summary
Total assets (things you own)........... 155,500
Total HP & Secured debt................. -155,500
Total Unsecured debt.................... -26,217
Net Assets.............................. -26,217

Nottoobadyet

jayjay33 wrote: »

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 2100
Benefits................................ 117
Other income............................ 0
Total monthly income.................... 3817
Monthly Expense Details
Mortgage................................ 325 Does this include the extra £100 you are paying in?
Secured/HP loan repayments.............. 55
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 118
Electricity............................. 23.5
Gas..................................... 18
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 15
Mobile phone............................ 60 You could save some money here
TV Licence.............................. 12
Satellite/Cable TV...................... 55 and here
Internet Services....................... 0
Groceries etc. ......................... 400 and definetly here!
Clothing................................ 20
Petrol/diesel........................... 220
Road tax................................ 25
Car Insurance........................... 132 Per month?
Car maintenance (including MOT)......... 50
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 550
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 4.5
Life assurance ......................... 55 this seems quite steep - is it all needed?
Other insurance......................... 7
Presents (birthday, christmas etc)...... 40
Haircuts................................ 15
Entertainment........................... 30
Holiday................................. 125 again, money to be saved here!
Emergency fund.......................... 75
Total monthly expenses.................. 2515

Assets
Cash.................................... 500
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 155500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 148000...(325)......2.49
Secured Debt.................. 7500.....(55).......5.94
Total secured & HP debts...... 155500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco loan ....................5500......137.......7.9
AA loan .......................13000.....328.......7.9
DFS sofa.......................1000......37........0
Tesco credid card .............1428......47........16.9
Barclaycard....................5100......43........6.8
Harveys funniture..............189.......21........0
Total unsecured debts..........26217.....613.......-

Monthly Budget Summary
Total monthly income.................... 3,817
Expenses (including HP & secured debts). 2,515
Available for debt repayments........... 1,302
Monthly UNsecured debt repayments....... 613
Amount left after debt repayments....... 689 OK this is important - do you actually have this at the end of the month? if you do, you could pay off your tesco card in just over 2 months then start making headway into your Barclays card.
Personal Balance Sheet Summary
Total assets (things you own)........... 155,500
Total HP & Secured debt................. -155,500
Total Unsecured debt.................... -26,217
Net Assets.............................. -26,217

If really have over £600 at the end of each month I'd think that you'd have no problem paying off the cards in the next few months - especially since there is lots of space in your SOA for savings. Once you have those paid off you'll be in a more secure position to scale up, etc.

If you dont have that at the end of the month, start keeping a spending diary to see where its going!

jayjay33

Oops sorry forgot mortgage is £425 with extra £100 paying off. Mbile phone contract i could see if they will let me lower my tariff but it was a 24 month contract so not sure if im allowed to do this?!

Yeah groceries seem to be going up every week, we shop online in tesco to ensure no impulse spending but with extra milk and bread etc for toddler mid week it always seems to add bits on here and there.

Life insurance, we got income protection for hubby which is £27 a month and rest is life insurance to have £300k paid out if either of us die as it would have to try and support our little girl till she is 18 as much as possible. Maybe thats too much? Maybe need to reduce this a little. We booked a holiday to Turkey as we havnt had one in nearly 4 years and with the jobs we are in, we dont seem to geta break if we stay in this country, did shop around for the best deal as well though. Worst happens can cancel it if situation has not changed. Our sky contract seems a lot but we dont go out hardly ever now since having the baby so it was the only way of having stuff to do at home so weighed it up as cheaper than going out every week to cinema/pubs/restaurants. We go out once every 2 months if we are lucky now. Maybe it wasnt the best idea though! Some months we have that amount left over others we dont as we have started trying to pay upfront for things like house insurance when we can, car insurance is high as my hubby had a bump last year, first in 10 years and his insurance went up to £77. was only a small bump as well. Mine is £50 i think as i only passed 4 years ago but had no accidents so not sure if that is still high to be paying, did shop around.

Thanks alot for ur advice, i will take any suggestions i can to try and make headway with finances!

chesky369

It would be more sensible to put the £100 you're paying extra on the mortgage into paying off the credit card debts - a much higher rate of interest.