Interest Only Mortgage To Clear Debts

DontWorryBeHappy

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.
No argument on the issue of having lived beyond our means. I make no apology for not wanting to take the most painful route to clear these debts. I think that the sacrifices we are making are painful enough and to take more severe measures would increase the pressures on relationships and our mental wellbeing and would increase the chances of failing to clear our debts within the next 2 years.

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.
If, and when, the interest rates rise I will have no choice but to make further, more painful cuts or to accept that it will take me longer than 2 years to get out of debt. I might decide that renting instead of owning a home is a better option, sell my house and use the £200k to pay off my £40k of debts and stick the remaining £160k in my pension or buy a retirement home in France.

DontWorryBeHappy

And reading the bankruptcy board will reveal even more!
In what way would this help?

hcb42

but unlike many you could turn this around really easily, by making some short term adjustments so you are fortunate in that sense, although I can also see that paying for the needs and wants of four adults does rack up significantly

getmore4less

DontWorryBeHappy wrote: »

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

EXPENDITURE
Fares £430 (2 x £220 - 2 x £50 per week) any alternatives
Lunch £230 (2 x £115 - 2 x £5.30 per day) easy fix make something.
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 another easy fix stop using the OD
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 looks high(tumble dryer ?)review utilities
Telephone/ISP £55 easy to reduce aim for £25
Water Rates £40
TV Licence £15
Washing Machine Insurance £5 expensive buys a new one every 3 years
PC Insurance £10 waste of money new PC is £200-£300
PC Insurance £10 waste of money can this be added to house cover
Lottery Ticket £10
Mobile Phone 1 £45 --
Mobile Phone 2 £30 --
Mobile Phone 3 £30 --
Mobile Phone 4 £30 -- alll these can be reduced with cash back contracts with loads of minutes or PAYG £10 each
Pets £100 (Food, Bedding, Insurance)
University Rent £630 (£350 + £280)
Weekly Shopping £650 (£150 per week) looks high how many at home?
Socialising £100 (2 nights out per month)
Misc £100 (Dry Cleaning, Birthdays, etc) masive debt no more presents for at least a year

Hopefully that adds up.

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

There are plenty of places you could reduce the spends

£400 would be easy

Are your AVCs matched by free money from the employer?
If not think about delaying those and catchup when the debt is gone.

no clothes?

DontWorryBeHappy

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.
Yeah I originally said 4 credit cards but one is Next Directory which doesn't involve a card so on the detailed list I called it a Personal Loan. It's the £55 per month payment. The lottery is £2 per week which equate to £10 (£10.40) per month.
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.
On the contrary. It adds up because this is the first time in a very long time that we know exactly what we are 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.
what is an average shop for 3 adults? A third child(adult) lives at home with us. She is a trainee hairdresser and earns less than the minimum wage and does not therefore contribute to household bills.
I will analyse our bill and see where we are spending the money.

getmore4less

what is an average shop for 3 adults? A third child(adult) lives at home with us. She is a trainee hairdresser and earns less than the minimum wage and does not therefore contribute to household bills.
I will analyse our bill and see where we are spending the money.


Target £100pm per adult including work lunches
(usualy includes housholds like cleaners etc)

Seperate out booze that can add up and is descretionary

Meat can also add a lot.

DontWorryBeHappy

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.
We have 3 children in total. Two are at Uni and one is doing an apprenticeship. I do not want them saddled with debt before they have even started to work and I don't want them to have to work while studying. The mobiles belong to my wife and the kids have one each. Mine is paid for by my employer. the weekly shopping bill will be looked at.

ViolaLass

DontWorryBeHappy wrote: »

what is an average shop for 3 adults?

OH and I eat comfortably on c£150 a month (for both, not each) including work lunches and all household stuff like cleaning things etc. Does that food money include a contribution towards the two children at uni or is it just you, wife and youngest child?

I think the idea of £100 per person per month is not bad. That would halve your bill and get you an extra £300 a month (if it's three of you).

This is just me, but if I were in your shoes, I would rather cut back on the food, the gas/elec, which looks a bit high to me, the mobile phone bills, possibly a bit of the kids' rent, the various insurances etc than cancel holidays altogether. It's each to their own though, maybe you'd rather have more money each week for your phone, food, kids etc but it's surely worth looking at and considering.

ViolaLass

DontWorryBeHappy wrote: »

I do not want them saddled with debt before they have even started to work and I don't want them to have to work while studying.

Not even in the holidays? It's a personal choice thing and I can understand why you feel the way you do but summer jobs won't do their studies any harm at all and could help their CVs.

getmore4less

What are the interest rates on each of these debts, how big is each and min payments.

Snowballing and 0% spends card would reduce the costs.

Where are you going in the vehicle, do you need something that is so expensive to run.

Could you drop this(SORN) for a year or even 6 months
use taxis/hire cars £240pm and your season tickets.