Interest Only Mortgage To Clear Debts

Thrugelmir

DontWorryBeHappy wrote: »

I assume you are suggesting that I should save this £2 a week rather than increase my chances of winning my way out of debt.

I'm not looking for sympathy just advice.

Absolutely. If you eradicated every penny of non-essential expenditure and used to pay down your credit cards then anything is possible. You've lived beyond your income. Borrowed more and more money to subsidise your lifestyle. Yet now wish as an easy option to change your mortgage to interest only. As you are unable to face up directly to your problems. As and when interest rates rise. Your cashflow is going to become more and more acute.

Unlike many. You do have the opportunity to turn the situation around. Suggest you visit the Debt Free Wannabe board for support and advice. You may be suprised just how little people get by on.

property.advert

getmore4less wrote: »

I have two other personal loans, £383.01 and £396.29,


So your unsecured debt is a lot more than the £20k.

why not include them in the debt free plan.

Looking at just one debt is not the correct thing to do.
read up about snowballing.

£6500 income
So we have
£1600 mortgage
£ 500 CC
£ 800 loans
£ 600 uni

£3000pm left to live on!

Yeah, the numbers still don't add up but maybe he meant £2000 a week on the lottery ?

RecoveringAlcoholic

Suggest you visit the Debt Free Wannabe board for support and advice. You may be suprised just how little people get by on.

And reading the bankruptcy board will reveal even more!


.

DontWorryBeHappy

INCOME (after Pension AVCs, BUPA, etc)
£6300

EXPENDITURE
Fares £430 (2 x £220 - 2 x £50 per week)
Lunch £230 (2 x £115 - 2 x £5.30 per day)
Credit Card 1 £225
Credit Card 2 £140
Credit Card 3 £90
Personal Loan 1 £395
Personal Loan 2 £385
Personal Loan 3 £55
Bank O/D Charge £55
Mortgage £1645
Council Tax £185
Home/Contents Insurance £40
Car Insurance £30
Car Tax £20 (£205 per year)
Car Maintenance £40 (£500 per year)
Petrol £120 (£30 per week)
AA Breakdown Cover £30
Life Insurance £100
Gas £85
Electricity £140
Telephone/ISP £55
Water Rates £40
TV Licence £15
Washing Machine Insurance £5
PC Insurance £10
PC Insurance £10
Lottery Ticket £10
Mobile Phone 1 £45
Mobile Phone 2 £30
Mobile Phone 3 £30
Mobile Phone 4 £30
Pets £100 (Food, Bedding, Insurance)
University Rent £630 (£350 + £280)
Weekly Shopping £650 (£150 per week)
Socialising £100 (2 nights out per month)
Misc £100 (Dry Cleaning, Birthdays, etc)

Hopefully that adds up.

Anybody want to buy 3 rabbits, a dog, a lizard and two teenagers?

DontWorryBeHappy

Is the £20k debt left before or after using the money from the car sold?
After. The sold car paid off the rest of the finance on the car and cleared one other credit card.

ViolaLass

So now it's 3 CCs, 3 loans AND an overdraft (and £10 a week on the lottery, not £2). I'm not criticising, just pointing out that that wasn't what you said earlier. And it all rather conveniently adds up to your income, which makes me think you might not know the details of what you're spending.

How open are you to cutting things? e.g. £150 a week for 4 adults is a lot (especially when it doesn't even include weekday lunches). Do any of you cook? The mobile phones are also all high. I could say more - it depends how much you're prepared to cut.

hcb42

i think these are monthly, not weekly...

DontWorryBeHappy

Also very confused as to why they would be preferable on interest only unless you never want to pay them off ?
The idea was to just pay Interest on my mortgage for 2 years which would free up approximately £1000 per month which I would use to repay the credit cards much more quickly.
In 2 years time, all things being equal, I will have all credit cards paid off, all personal loans paid off and 1 of my 2 kids will have finished at Uni, freeing up an additional £1700 per month.
I can then go back to paying my mortgage. If I only put £700 of the free'd up £1700 towards my mortgage, leaving £1000 a month for savings and additional lottery tickets, I could still afford a £2345 per month mortgage.
How long would it take to repay my £192,000 mortgage?

hcb42

I agree with other posters though, I would hang on to that mortgage rate at all costs (and I speak as one who is trying to remortgage at moment with a 40% LTV. It is a nightmare out there.

tackling energy, water (if metered) and telecoms costs here, avoiding bank charges, and possibly non essential insurances offer up the best opportunities for saving short term

(and can't these teenagers pay their own rents LOL!!!!)

ViolaLass

Hang on, so you have two children and they're both at uni (and living away from home?). I agree with Helen, can't they at least contribute to their own rent? And their mobile phone bills? (I assume you adults don't have two phones each so two must belong to the kids) Also, £150 a week for two adults really is masses. There's so much you could cut.