Renting a property and getting ploughed under

pinkpinkuk

I'm due to be moving into my own flat on 31/03/11 and I thought I had it all planned out finance-wise, but now I'm worried things are going pear shaped and would like you guys to look at it for me, if you'd be so kind. Here are the figures:

Incomings:
£1,022 wages, cleared in my account by 31/03/11
£300 savings

TOTAL: £1,322

Outgoings:
£500 first months' rent
£525 deposit
£300 security. This is because the rent on the place is actually £525 per month. Because I am earning £15k, rather than the £15,750 they say I need I need to pay the extra £25 x 12 months on signing the contract. This then reduces my rent to £500 per month.

TOTAL: £1,325

(Plus agency fees of £270 which I have already paid)

I have £400 deposit due back for this place, but I won't receive that until I move out. I'm planning on using that to pay for furniture, as the flat is unfurnished.

Evidently I will also need some money to live off next month. This month I expect to spend around £100 on food and living expenses (I'm being as tight as possible) so I anticipate spending around the same next month. Therefore I'm falling a little short.

The bank are unwilling to extend my overdraft, but after a nice long chat with them I agreed to take out a credit card (I don't have any other credit cards). I have been agreed in principle for a card which is interest free on purchases and transfers for 6 months with a limit of £1,500. I'm quite worried about getting into debt and will no means go crazy with the credit card. I'm intending to use it to cover the shortfall, pay it off asap (and certainly within 6 months) and then set it aside.

First question: Any problems so far? Anything I have missed? Is using the credit card to cover the shortfall for the month and then paying it back asap something I can do? (I should say I've never had a credit card before, so not very clued up).

Now here's where it goes pear-shaped. I have been doing my sums since I viewed the place and figured I could just about cope if I paid the monies after payday. I telephoned the letting agent and explained I get paid on 31/03/11 and could not afford to pay it all until that date. She told me that was fine, we would sign the contract on that date and I could move in straight away.

Only now, after I have paid my agency fees, had credit and reference checks, have they told me they actually need the money in cleared funds in their account the day before I sign the contract i.e. 30/03/11. My wages get paid at around 2.00am on 31/03/11, so evidently this is not going to be soon enough.

The other option is bringing a bankers draft when I sign the contract on 31/03/11. From the little I understand of bankers drafts, I need to transfer the funds in full to the bank before they will write me a bankers draft.

Second question: Is there any chance I could obtain a bankers draft on 31/03/11 AFTER I have been paid, but BEFORE I sign the contract? Or is that infeasible time wise?

Third question: The other option I can see is to pay entire balance of £1,325 on the credit card on 30/03/11, then pay that balance off when I get paid the following day. Is this feasible?

I'm sorry for giving you all these sums to puzzle over guys. I thought I had it all planned out until they told me I need the money a day earlier, now I'm having a crisis of faith in my numbers as well. I would really appreciate any advice anyone is able to offer, even if its "you're a fool", although I would be grateful to know why!

Thank you, guys :money:

climbgirl

pinkpinkuk wrote: »

Third question: The other option I can see is to pay entire balance of £1,325 on the credit card on 30/03/11, then pay that balance off when I get paid the following day. Is this feasible?

Seems like the only real option assuming you have enough headroom on your credit card and that the agent will accept a credit card payment.

Given that it's really only a cashflow issue for a day or two, is there someone (parents, family) you could borrow the money from until you get paid?

adg1

Tell the agent you will pay cash on signing the agreement on the 31st. Withdraw it in the bank and pay it in their office, ensuring you get a receipt.

This is cleared funds before you move in, and no different to getting it the day before.

If you pay in all on the credit card you will pay it off on the 31st no? If so, no issue. Only that your wages are short of paying the whole balance off.

pinkpinkuk

climbgirl wrote: »

Seems like the only real option assuming you have enough headroom on your credit card and that the agent will accept a credit card payment.

Given that it's really only a cashflow issue for a day or two, is there someone (parents, family) you could borrow the money from until you get paid?

Thank you for your reply

My credit card limit is £1,500. I haven't checked if the agent will accept a credit card payment, but thank you for the thought, I hadn't considered that. If they won't, is it possible to transfer the money from my credit card into a bank account and then make a transfer? Sorry for my stupidity, again I'm too paranoid about getting into debt to really understand how credit cards work

Hmm now I had considered borrowing money from my parents to cover the shortfall but it was really a last resort. They helped me out a massive amount when I moved into this place (DV causing an unexpected move) so I feel I already owe them so much already and would like to avoid asking them for more if I can possibly raise the money myself.

As far as I'm aware they don't have any significant savings etc to enable them to lend me a substantial amount like £1,400, even for a couple of days, unfortunately.

tattycath

ask your parents to LEND you the money and make sure you pay it back as soon as you can

pinkpinkuk

adg1 wrote: »

Tell the agent you will pay cash on signing the agreement on the 31st. Withdraw it in the bank and pay it in their office, ensuring you get a receipt.

This is cleared funds before you move in, and no different to getting it the day before.

If you pay in all on the credit card you will pay it off on the 31st no? If so, no issue. Only that your wages are short of paying the whole balance off.

Thank you

Unfortunately the agency are very clear in their email that they do not take payment in cash. They want either cleared funds the day before or a bankers draft on the day.

I haven't argued this point with them, despite the fact I was clearly told I could pay the full balance on 31/03/11 with no such stipulations. If possible I don't want to jeopardise moving in on 31/03/11 as I have booked holiday from work and have movers, boyfriend willing to help etc already arranged for 31/03/11.

If I pay the whole balance on my credit card on 30/03/11 I will be able to pay off the vast majority of the balance the following day, save for the shortfall, which I had already envisioned and was the original purpose of the credit card. So that should be OK, assuming that would be something I would be able to do. I could then pay off the shortfall easily enough over the next couple of months.

pinkpinkuk

tattycath wrote: »

ask your parents to LEND you the money and make sure you pay it back as soon as you can

Thanks for your reply. I would do that, but I doubt they have enough free cash/savings to lend me the money even for a couple of days without borrowing themselves, and I wouldn't be keen on asking them to do that for me I do appreciate the fresh idea though, absolutely.

RAS

Next bit of advice; you do not need to buy furniture. That is how people get into debt.

Get a new mattress and sleep on that. But join your local branch of www.freegle.org.uk or freecycle if they still operate in your area.

Let folks know you need some furniture and stuff will come your way. Then try the charity shops.

It may not be perfect, but if you move out, you can get shot if needs be; just put it on freegle when you want to go.

pinkpinkuk

RAS wrote: »

Next bit of advice; you do not need to buy furniture. That is how people get into debt.

Get a new mattress and sleep on that. But join your local branch of www.freegle.org.uk or freecycle if they still operate in your area.

Let folks know you need some furniture and stuff will come your way. Then try the charity shops.

It may not be perfect, but if you move out, you can get shot if needs be; just put it on freegle when you want to go.

Thank you so much, very useful post. I am a member of freecycle already, but hadn't heard of freegle, so I am looking it over at the moment.

I should say I do have some furniture. Not exactly essentials like bed and seating, but things like coffee tables and bookshelves. Non-essentials really, but something less to obtain. My boyfriend has also procured me a TV, bless him, so at least I'm not starting from zero.

One problem I do have is that I don't drive. I live in the centre of Bristol and actually don't know anyone who drives or has a car either, because public transport is so much quicker. This might throw up a problem in getting things from freecycle/freegle as I understand they are collection only. I could probably arrange for them to be collected by someone with a van for a small charge, if necessary though

My furniture plans (yeah I did the sums with my online shopping basket, I'm that sad) were £160 towards a bed, mattress, wardrobe and mirrors from Ikea. £100 max on things such as microwave, cutlery crockery, hoover glassware etc. I figured I couldn't afford a sofa and was considering investing in beanbags until such time as I can afford to sit. This would bring me in well under the £400, which I had budgeted (being the £400 deposit I'm getting back from this place. LL has confirmed I'll get my full deposit back, but not until after I move out).

However, I do see the benefit of getting stuff for free wherever possible, thus enabling me to use that £400 to pay off any shortfall and living expenses. Thank you for the advice.

pinkpinkuk

Thanks for all the replies so far. I have had another good read of this email and it states:

"You can either bring a bankers draft with you to your settlement or you can arrange for a transfer direct to our account. Please note that if you are transferring money to us it must be cleared and showing in our account no later than the 30th so always double check with your bank on their transfer times before making a transfer."

The document itself states:

"Payment should be made by BANKER'S DRAFT OR BUILDING SOCIETY CHEQUE* and must be made payable to [Letting agent]. Personal cheques are NOT accepted. (Unfortunately, WE DO NOT ACCEPT CASH in our office).

We are able to accept payment directly into our bank account by BACS. Please contact us to discuss if this payment option is suitable. If this is your preferred method of payment we will require the cleared funds to appear in our account at least one business/banking working day prior to your move in date. We will need confirmation from you that the funds have been transferred/paid in order to check that they have been received" (Bold bit added by me)

Sounds to me like I won't be able to pay the balance on a credit card on 30/03/11. Am I right?

Are there any alternative ways to pay this? E.g. is it possible to somehow transfer funds from the credit card into a bank account so I can then transfer the money via BACS?

Alternatively, could I pay for a bankers draft on the credit card for a couple of days?

I really apologise for the n00b questions. This sudden "day early" thing has really thrown things up in the air. I thought I was all planned out but I foolishly didn't account for them wanting cleared funds earlier.

Moglet

Borrowing cash on a credit card is very expensive. If you withdraw cash from the cash you'll be charger a higher interest rate and there won't be an interest free period. If they allow a super balance transfer to your bank account they will probably charge something like a 4% balance transfer fee rather than the usual 3%.

Can you move out/in 2 or 3 days later than planned?