Oh My God, Amex Just Killed Me

Robflh

Hi wisbech_lad
You are absolutely correct, the problem is that I have lost the £3,000 I needed to finish the house and the whole point of Starting this tread is to.

A) Find away passed the obstacle that has been put in my way.
For anyone that as had Amex do the same thing to them, to be able to slag off Amex am much as they wish to.

To say o dear there is an obstacle in my way and I will have to give up and sell the house now. Is not my way of doing things, I am not a quitter and to be that way, is to have a defeatist attitude.

I will do everything in my power to go over, under, round or even through that obstacle. Before, I will submit to defeat and sell the house without finishing it off first.

Getting the interest frozen on the current debt is also a very good idea. That is one I have already thought of but you are the first one to suggest it and that is why I gave you an extra thank you. That can be done electronically but I am not sure how. Help with this would be appreciated.

If it was just the interest that was frozen and not the cards, I would still have to make the minimum payments each month (£550) but I would not loose any of it in interest. I would then be able to spend up to £550 a month to finish of the house. True it would take longer to finish off the house but not much longer.

My reason for not doing that is that my credit rating would take a nosedive. For my debt free plan to work, once I have cleared the current debt off the CC’s I will need to put a debt back on them. This will be the debt obtained by renovating the next property, which will be approximately £15,000.

If the profit from the second house was £35,000, it could be more it could be less. I would have £20,000 left in the bank after I pay off the CC’s. I would then be debt free and could renovate the third house without touching a single CC.

If my rating takes a nosedive, then when the CC’s have been cleared, their limits maybe dramatically reduced and I would then not have the money to renovate the second house. This would result in my ultimate goal being dead in the water.

Unlike other people, I am not just focusing on getting rid of the current debt. I am looking to get rid of the current one. To in the short term, be able to manage any future debt and in the long term to have built up a nest egg for when I am a pensioner.

Therefore, when someone says, because I will not sell the house now, I am not looking at the bigger picture. It is actually themselves that are not looking at the bigger picture.

As for the last point you have raised, I have already apologised for that. I have no problem with people disagreeing with my point of view. After all, I am continually disagreeing with other people’s points of view.

However, do not belittle the situation I am in. It is a serious situation and for some one else, not me it will never be me, it could be a life threatening situation.

Hi katepnlo
I think my last post answered most of the points you have raised. The valuation for when the house is finished, will continue to fluctuate but this is because all house prices are fluctuating.

As for me not having my big LBM, I had that when I was changing from an endowment mortgage (EM) to a repayment mortgage (RM). When the endowment part of the original mortgage is cashed in and added to the compensation money you have received, you have a lump sum (LS). The LS is paid off the original mortgage and the remaining amount is paid off with a new repayment mortgage over the remaining number of years on the original mortgage. God that is long winded.

EM = £27,000 over 25 years, finish date = 2018.
With 15 years left, it is changed to an RM. The cashed in endowment = £5,000 and the comp for being miss sold and EM is £1,500.

LS = £6,500 therefore, £27,000 minus £6,500 =£21,500.

New RM = £21,500 over 15 years, finish date 2018

That is how it is supposed to be done but my LBM was to have the new RM for £27,000 over 25 years, finish date 2025 and to keep the LS so I could renovate home and start working towards my ultimate goal. The one you have just read.

It was a bit of a last minute rush to do it but I manage to get it to start on 08/07/2005. As that was my birthday, the mortgage would finish on my 65th birthday. The day I retire.

Hi GettingThingsDone
As the current valuation is based on a finished house, and the valuation of it before anything had been done to was £155,000. In its current state their valuation, if I am lucky would be around £165,000 and anyone that comes round to view the house, would try to get a least another £5,000 of the asking price.

No sell it now is not being harsh and yes that is what I could do but after you have read this post, I hope you will understand why I would rather not do that.

Hi amani
Thank you for the extra info. It is greatly appreciated.

Hi kathy206
I think my last post and this one should address all the points you have raised. If not please post again.

Hi noyk
Thank you for your very kind words. As I have said before, I am dyslexic and because of that, it takes me hours to do a post, that will be read in a few minutes. Most of that time is spent trying to find all the mistakes that I have made.

Today I was looking at my last post and I found an error in the first three lines.

I am sorry if my posts are on the long side but I am trying to address points that have been raised in a why that.

I have put why instead of way and I think I missed a comma after raised. As it will grammar and spell check it for me I always type it out in Word first. However, typing it took four gays to do the job instead of four days to do the job. Is neither incorrect grammar nor incorrect spelling.

You are correct my credit is drying up and that is exactly what was supposed to happen as the renovation work progressed. What was not factored in to the equation was a reduction in the credit limit for my Amex card.

Some people would say it should have been. However, as my cards have never gone down but they have always gone up, my Mint card went up a couple of months ago, there was no reason to suspect that one would go down.

I do have lot of equity in the house. That is why I maybe able to get a loan, secured against the house. It may have a high APR but for the short time I will have it that will not be a problem. It is also, why I have not been worried if the outstanding debt is £20k or £30k. If it came to it and I had to declare bankruptcy, I have enough equity to pay of the mortgage, the debt and still have shed loads of money in the bank.

Job wise, this may seem strange, considering what I have been doing for the last eighteen months but my mental health is not strong enough to be able to take the stresses and strains a job would put on me.

I you had your leg in a plaster. You would be able to get around with the help of a pair of crutches but you would not be able to run a marathon. Effectively, that is what you have asked me to do.

hypno06

I may be wrong but my understanding of the situation once you have interest frozen on your debts is that you are not able to use that "available" credit any more? This means that you can pay your debt off quicker, and your minimum payments may be less, but you will not be able to use that element which you have just cleared, to fund your lifestyle or house refurb.

Robflh

Hi hypno06
As I was writing it, I was thinking the same thing. At the moment, every month £290 comes of the outstanding balance and becomes available credit. I can use that to buy food and other things. If the card is frozen as well as the interest and I still have to make the minimum payments, I will loose that £290.

If anyone reading this has or knows someone that has gone to their creditors and had the interest frozen. Can you post what happens to the minimum payment/s. Do they stay the same and is the card frozen as well interest.

[Deleted User]

Id also say sell up now your walking a tite rope thats hanging by a thread.

saffronflowers

One of the problems Rob is you are hell bent on doing the house up and refusing to listen to some very very solid advice. You can finish it off very quickly, if you so wanted, look for paint on freecycle and get a good quality company to clean the carpets. Sell up, rent a property and live on the equity stress free which sould enable to get a job and your life back on track.

Owning property is not the be all and end all, and god forbid that you do get into a spiral again, as charging orders are becoming more and more popular.

SFx

Storm

Hi Rob :hello:

OK, come up with an alternative for you, which I know you won't like on first seeing it, but read it a couple of times and have a good think about...

You reckon if you sell the house as it is you could get about £160K for it, and the mortgage is currently £26K, correct?

I don't know where you are in the country, but I'm on the south coast, and 1 bedroom flats are around the £100K mark, add in the costs of moving and you should have about £30K pure profit.

This would be enough for you to wipe out your credit cards, plus have a few grand to put into investments.

Your income would drop to £355 a month without any lodgers, but you would have no mortgage payment, no council tax, utility bills would reduce in a smaller place with no lodgers and you wouldn't have to have the huge cable & phone bill either.

You would be debt free completely - the cards could be cut up & cancelled - from your SoA you could live completely within the money coming in each month without the worry and stress of would the interest rates increase or the limits be lowered. Plus, you said yourself that getting good lodgers was always difficult, so you would also remove the worry about whether they'd do a moonlight flit, run up big phone bills etc etc.

With the current interest rates looking set to rise and a lot of doubt over exactly what will happen to house prices in the next few years, looking to buy another property to renovate to make a profit seems very risky to me, especially when you're looking to do that using credit. You may well get different answers on the house buying & selling board - please remember the focus of the DFW board is to get rid of our debts, hence people being resistant to you adding to them for a potential future profit.

On a slightly different note - I think that a high proportion of people on the DFW have done or currently do suffer from depression - for some brought on by the debt and for others it's a cause of the debt. However, bar a few people, we are not experts in the field of mental health or personal finance, and our advice comes from personal experience and our own research.

I hope everything works out for you

Storm

Robflh

Hi Storm

That is exactly the kind of suggestion that I am looking for. Although, I think you may have your figures wrong.

My SOA had a couple of item missing, TV License and House Insurance. I have added both of these and an amount for Sundries to cover all the things that turn up unexpectedly. In other words, all the stuff that you cannot budget for.

However, let’s use your figures. If I sell the house tomorrow I would be able to pay off my mortgage £24,500 (latest statement) and have £35,500 left to pay off my debts.

Therefore, I would have enough left to cover my debts whether they are £25,000 or £28,000 (when the house is finished) and I would still have money in the bank.

This is my safety net.

Using Yant1’s analogy, I am walking on a tight rope that is hanging by a thread but as long as I have a safety net that I can fall in to, it does not matter whether I jump now or fall later, the safety net will catch me.

If I stay on the tight rope, there is always the chance that I can make it all the way across before it breaks. If I did not have a safety net that would be stupid but I do have one.

Looking on the house buying & selling board, now that is what I call a good idea.

As for saffronflowers, just because someone chooses not to do something someone else has suggested, it does not mean they have not listened.

Three carpets are so bad that they would fall to bits if they were cleaned and another room does not even have a carpet. I can buy and lay a carpet myself and would not have to pay anyone to fit them. As I have said before, presentation is extremely important.

Once I have found the right property to buy, I need to sell my home as quick as possible. If it takes me too long to sell mine, I will loose the property I wish to buy.

See post 11 http://forums.moneysavingexpert.com/showthread.html?t=5383

Russ66

Robflh wrote: »

The mortgage is £26,000, the house will be worth around £180,000 when I have finished renovating it and the house I buy will cost around £150,000.

However, I will need around 10 to 15k to renovate the next house.

Unfortunately, I need around £3,000 to finish renovating this house.

As I do not have a job, I cannot re mortgage the house and for the same reason I do not think I can get a loan secured against the house.

Are you sure you can't borrow against the equity in the house? Have you tried talking to your current mortgage provider?:huh:

I would have thought you could borrow enough money to renovate and pay off your credit cards (Thus stopping the interest) with that kind of equity, regardless of income.

Robflh

:EasterBun
Hi Russ66

I was thinking of putting something in my last post but I did not wish to jinks it. However, as you have asked the question I will answer it now.

I have an appointment tomorrow to see if I can or cannot get any money secured against the house. There may even be something that they can do with my current mortgage. I will find out all about it tomorrow.

As soon as I get back, I will let everyone know what the outcome is. With all the equity I have in the house, I cannot see why not but I am not going to hold my breath.

I must confess I am more nervous now, then I have been over the last few weeks.

Russ66

:T "Break a leg":rotfl: