My SOA - thoughts please...

Malkin157

It's confusing because you put 250 mortgage and 500 rent in your SOA.

Therefore to live where you are now costs you £750, but I take from your 449 figure you have unsecured debt rolled up in the NRAM mortgage.

Moving back to the house you own would save you £500 (the rent) plus council tax is probably cheaper.

Furthermore in theory if you lived back in your house (yes I understand it is too small) and you cut back in other areas of your SOA as advised you would save roughly £750 a month.

If we assume your debt is 35000, this would take you 3 years 10 months to clear.

I am unsure as to whether you are actually paying off any of your mortgage/NRAM loan through the current repayments or whether it is interest only.

With a real effort you could be debt free and living in a different house within 3 years I think.

Naf

What is comes down to, in a way, is that the house you are living in and paying rent for is a luxury; and one you can't really afford. Obviously it's not ideal, but the property with the mortgage on it would be the financially sound decision to make.
Bankruptcy (in my inexpert opinion) is not really suitable for you because with a little effort you could be rid of your current situation within 3-4 years; but the bankruptcy is going to hamper you for substantially longer; and could have an impact on your ability to even rent a property. If your situation was such that it was going to take longer than 6 years to escape from, then I might be inclined to say it was a viable option for you.

Sandgrownun

Ok thanks but is that taking into account my £798 a month pay whilst on mat leave? I'd not be able to pay anything then so would prolong it. If I went back to work early childcare would be approx £1000 a month even with vouchers and free hours.

Malkin157

There are three distinct options:

1. Hand back the keys and go BR. A stressful option I would imagine plus this will trash your credit.

2. Stop renting move back to your house and put everything (rent plus SOA savings) into paying off the secured loan.

3. Sell the house and then put the savings (mortgage repayments plus SOA savings) into repaying the loan/outstanding mortgage balance.

It's unclear how fast you are currently paying off the secured loan, but with some snowballing i would expect option two to take 3yrs and option three 5yrs.

However what you should do is take time to complete a number of potential SOAs one for each scenario for each of the next 3/5 years. This is because every year is different. i.e. first year you have maternity. but 2nd year your eldest will be at school therefore key incomings/outgoings will change from year to year.

Sandgrownun

Malkin157 wrote: »

There are three distinct options:

1. Hand back the keys and go BR. A stressful option I would imagine plus this will trash your credit.

2. Stop renting move back to your house and put everything (rent plus SOA savings) into paying off the secured loan.

3. Sell the house and then put the savings (mortgage repayments plus SOA savings) into repaying the loan/outstanding mortgage balance.

It's unclear how fast you are currently paying off the secured loan, but with some snowballing i would expect option two to take 3yrs and option three 5yrs.

However what you should do is take time to complete a number of potential SOAs one for each scenario for each of the next 3/5 years. This is because every year is different. i.e. first year you have maternity. but 2nd year your eldest will be at school therefore key incomings/outgoings will change from year to year.

Thank you this is very helpful. I will do this, if I do it'll be more maths and budgeting in one afternoon than I've done in my 30 years of living! Which gives you an idea of why I've ended up in this mess! This is all really helpful to me, whatever happens after this week of financial awakening and scrutiny I know I'll always have a better grasp on my finances x x

charlotte4940

Sandgrownun wrote: »

Inspired by the Is Bankrupcy the best option for me thread? here is my SOA...

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 1447
Partners monthly income after tax....... 1120
Benefits................................ 81
Other income............................ 0
Total monthly income.................... 2648
Monthly Expense Details
Mortgage................................ 250
Secured/HP loan repayments.............. 150
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 117
Electricity............................. 40
Gas..................................... 99 shop around
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 12
Mobile phone............................ 37 switch to payg or down grade
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 16
Groceries etc. ......................... 400 this can be halved
Clothing................................ 100 buy second hand for kids
Petrol/diesel........................... 240 really!!
Road tax................................ 34
Car Insurance........................... 64 compare
Car maintenance (including MOT)......... 50
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 158 inc free hours?
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 ??
Pet insurance/vet bills................. 0
Buildings insurance..................... 27 can this not be lower
Contents insurance...................... 35
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 stop now
Haircuts................................ 30 is this necessary
Entertainment........................... 30 stop now
Holiday................................. 100 no holiday allowed
Emergency fund.......................... 50 what for?
Total monthly expenses.................. 2634.12

Assets
Cash.................................... 50
House value (Gross)..................... 70000
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 71350

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 83000....(250)......4.79
Secured Debt.................. 22000....(150)......4.79
Total secured & HP debts...... 105000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Next...........................381.......35........0
MBNA...........................2643......88........0 priority high apr
Barclaycard....................3100......71........0
Total unsecured debts..........6124......194.......-

Monthly Budget Summary
Total monthly income.................... 2,648
Expenses (including HP & secured debts). 2,634.12
Available for debt repayments........... 13.88
Monthly UNsecured debt repayments....... 194
Amount short for making debt repayments. -180.12
Personal Balance Sheet Summary
Total assets (things you own)........... 71,350
Total HP & Secured debt................. -105,000
Total Unsecured debt.................... -6,124
Net Assets.............................. -39,774
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

So that's including the mortgage and the rent, us paying both - however as it's in massive negative equity and I'm not allowed the rent it, nor do I have the spare cash to be responsible landlord and actually fix things I am planning to give it back to NRAM as voluntary possession.

I'm currently 6 months pregnant and will be going off on mat leave for a year so my average wage will be £798 per month for the year. Go back to work early perhaps? Yes but then full time Childcare for two children will be over £1000 - that's with vouchers and the free 15 hours per week.

If I give back the house then I won't have to pay £449, then I will work out some way to pay back the shortfall, got a phone interview with Stepchange tomorrow so hopefully they will help me see a way through.

Ive had a go - thinking what i would cut back on in your situation

Sandgrownun

charlotte4940 wrote: »

Ive had a go - thinking what i would cut back on in your situation

Thank you good suggestions re petrol that's for two cars, we are both essential car users at work. I used to cycle to work and to all my appts (very call the midwife) but at 6 months pg I'm happy to continue, my midwife less so!

closed

what are the apr's and limits on the credit cards/store cards?