Is There No Hope? Consolidation Re-mortgage

UpTheCreekWithoutAPaddle

Evening Sir,

Thank you for the comments.

As you have mentioned, I have been through the problem and I know where I went wrong. The overspend has been removed i.e. flash holidays etc. and also I had a big tax bill which I am having to pay back over 3 years.

I am sick of living on the edge so this is why I want to sort it once and for all. If I get through this, if there is something we want, it's save, save, save.

My wife is in a bad place with depression etc, she is trying to get work but has no confidence and to be quite honest has a large bucket of sand in which she has placed her head. BUT I love her dearly and I am very determined to sort this.

Thanks again for your comments,

Kind regards

Paul.

getmore4less wrote: »

UNless you understand and tackle the problem(overspending) consolidation won't help much.
You need to identify (for yourself)
How long has the debt been building?
How much was the overpsend in each year.
What was the overspend on identify and cut out.

Another way to look at it is, if these spends were priority and worth gettng into debt you have been borrowing to pay the mortgage.

What about increasing income get the wife out to work.

happycamel_2

Do you have stuff you could sell to clear a chunk off the debt and snowball from there? Good luck

Thrugelmir

UpTheCreekWithoutAPaddle wrote: »

I am sick of living on the edge so this is why I want to sort it once and for all. If I get through this, if there is something we want, it's save, save, save.

There's a good bunch of people on the Debt Free Wannabe board. Very supportive and inspirational. Some survive by literally counting the pennies. While paying off debt. So suggest you get yourself over there. Sounds as if need a shoulder to prop against.

This board is a little more judgemental as people have their business hats on when giving opinion. Though all have empathy with your situation.

GMS

UpTheCreekWithoutAPaddle wrote: »

I even had a dear friend and colleague (Director) at work (he's well off) offer to clear the CC debt and for me to repay him "later" when I could remortgage to the 200k but an advisor said unwise as there are no guarantees I would still get a mortgage, which of course is true.

l

What repayment terms were discussed? With 55k debt what are you paying each month? £1,000 as a minimum?

Is it possible you could pay what you are, or as much as you can in order to reduce the balance to your friend and refinance as and when possible?

Have you considered a second charge loan? Interest rates will be higher than a mortgage but could be less than a credit card rate.

If you get a plan to repay then you will know where you are. If you are paying minimal payments each month it will take for ever to clear.

getmore4less

UpTheCreekWithoutAPaddle wrote: »

I am sick of living on the edge so this is why I want to sort it once and for all. If I get through this, if there is something we want, it's save, save, save.

Are you sure consolidating fixes this main problem living on the edge.

it needs a SOA and debtfreewanabee analysis to do the real numbers and see what the options are.

Back of an envelope at 52 say 13 years max to 65.

Current mortgage = £140,000
Credit card debt (which I want to consolidate) = £55,000
Total re-mortgage needed = £195,000
My salary = £52,000 per annum employed.
Wife salary = £1200 per annum part time employed

£55k @ 20% is 916pm
£55k @ 10% is 458pm

What is it currently costing to stay level?

£55k over 13 years repayment @ 4% £452pm on top of the mortgage payment.
How much do you think you can afford pm on the new mortgage.

£55k @ 0% paying £452 is still over 10 years.

So consolidating is in effect a 13year DMP.

If a new mortgage does not free up enough income then an alternative stratagy needs to be found.

Crunch the real numbers in detail.

The two main options are increase income or reduce the debt.

edit:
missed this.
I had a big tax bill which I am having to pay back over 3 years.

how much will this free up in 3 years, will that help.

Any chance of pay rise?

On the friend loan, could this give a breathing space if you got enough to cover the highest rate CC on effectively 0% over three years till the tax bill money frees up.

It needs a detailed analysis but long term £195k is still going to be a significant amount to pay back over the time you have.

Work through the sell option even though you don't want to you have to have the numbers for that as an alternative.

UpTheCreekWithoutAPaddle

Hi happycamel,

thanks for your kind comment.

Yes I am selling off whatever I can find, but infortunaltey I'm using the cash for day to day living i.e. food shop etc.

Regards

Paul

happycamel wrote: »

Do you have stuff you could sell to clear a chunk off the debt and snowball from there? Good luck

UpTheCreekWithoutAPaddle

Morning! and thanks for the comments, wish I had come here a year ago!!

I have done a spreadsheet with a proposed monthly mortgage payment after consolidation of £1300 a month.

This would leave me with a tad under £1000 a month to live on after I have deducted council tax, insurances, TV, water, electric etc etc.

In a sense looking at it as a 13 year DMP is about right and I wouldn't have a destroyed credit rating.

I am assuming, and I know it's a big assumption, that I will be working until i'm at least 70, but of course who knows. In July I am taking up Directorship at the company and also will become a minor shareholder, so I believe I have a future that will sustain me.

Regards

Paul

getmore4less wrote: »

Are you sure consolidating fixes this main problem living on the edge.

it needs a SOA and debtfreewanabee analysis to do the real numbers and see what the options are.

Back of an envelope at 52 say 13 years max to 65.

Current mortgage = £140,000
Credit card debt (which I want to consolidate) = £55,000
Total re-mortgage needed = £195,000
My salary = £52,000 per annum employed.
Wife salary = £1200 per annum part time employed

£55k @ 20% is 916pm
£55k @ 10% is 458pm

What is it currently costing to stay level?

£55k over 13 years repayment @ 4% £452pm on top of the mortgage payment.
How much do you think you can afford pm on the new mortgage.

£55k @ 0% paying £452 is still over 10 years.

So consolidating is in effect a 13year DMP.

If a new mortgage does not free up enough income then an alternative stratagy needs to be found.

Crunch the real numbers in detail.

The two main options are increase income or reduce the debt.

edit:
missed this.
I had a big tax bill which I am having to pay back over 3 years.

how much will this free up in 3 years, will that help.

Any chance of pay rise?

On the friend loan, could this give a breathing space if you got enough to cover the highest rate CC on effectively 0% over three years till the tax bill money frees up.

It needs a detailed analysis but long term £195k is still going to be a significant amount to pay back over the time you have.

Work through the sell option even though you don't want to you have to have the numbers for that as an alternative.

TakingControl

No advise on the mortgage BUT do go onto the DFW board and post a honest Statement of Affairs for others to help.

You have £55K worth of debt and a DMP was suggested at 11 years. I had £45K worth of debt (on my salary alone) and the 6 year DMP became a 3 year one as once you truly have had your LBM you will become obsessed with budgeting and clearing the debts asap.

Good luck, what ever you decide

getmore4less

If you think it is viable and income will improve(to make it easier) then I think the next step is a SOA and get the debtfreewanabees to have a good look at the budget.

The thing to remember is it is up to you as a family how you prioritise the spending of your income, once you get the essentials down to minimum sorted you can then decide where to put the surplus, better food, TV, going out, holiday... just can't do it all, all the time.

It all down to the detail and a realistic budget.

UpTheCreekWithoutAPaddle

thanks for the tip, I think it is an excellent idea, no matter the outcome of the consolidation attempt. I will get myself over there today and do the SOA.

Many thanks

Paul

getmore4less wrote: »

If you think it is viable and income will improve(to make it easier) then I think the next step is a SOA and get the debtfreewanabees to have a good look at the budget.

The thing to remember is it is up to you as a family how you prioritise the spending of your income, once you get the essentials down to minimum sorted you can then decide where to put the surplus, better food, TV, going out, holiday... just can't do it all, all the time.

It all down to the detail and a realistic budget.