Oh My God, Amex Just Killed Me

GeorgeUK

Good luck Rob.

I've never had a mortgage or even been in "serious" debt, but thought i may as well add a little to your discussion here.

Your safety net is good to have, but is tied to house prices in your area. If a factory closes or something happens that adversely affects the local market, you may have a problem. Even if the demand remains, the area in which the demand is for may shift and leave you unprotected.

I'd have a different analogy. You're falling.
You may land on a cushion (you get your safety net)
You WILL land on the floor (sell now and you are dealing with a certainty rather than a possibility)
Or you may land in a pit (the unknown - did he jump or was he pushed)

Should you risk it or take your lumps?

The reason i am commenting is that even if you take the certainty option of selling now - you will not know how long your house will need to be on the market before you get a sale. Put that together with my other concerns and it is a scary picture. Have you investigated the house price movement in your area - are you close to public services/transport?

Not really sure how you'd look in to that - especially as i don't know where you are. Hope this confirms your projections though.
http://www.nethouseprices.com/

misspoppy

Hi

I've just caught up with your thread and I have a couple of things for you to think about.
1. do you really need to put coving up to sell your house - I don't think so, therefore you save some money how many more unecessary frills that many people concider to be out of fashion can you save money on? I'm not being rude just something to think about like taking out the airing cupboard its not necessary someone might want to use it as a cupboard.
2. You have not had a true LBM if you had you would want to be debt free and then live within your meger benefit means. No it won't be easy but if you can't work it is necessary.
3. Are you sure you are able to claim housing benefit on a new property, In 1997 they changed the rules and you couldn't claim benefit on a mortgage taken after that time. You should check this out before you make the leap into buying another property to do up if you will need some sort of mortgage on it.

I think you have come a long way in the past week or so and you are looking at ways around your problem but maybe it would be wiser to sell your house before you find your dream property what if yours doesn't sell before you need to commit to the new property?

changkra

Robflh wrote: »

myrnahaz
There are lots of little things that are not on a SOA (Sundries) and things always get missed like my house insurance. That is another £10 a month.

The extra money that the lodgers pay, covers most of the Cable TV and having it makes it that little bit easier to get lodgers.

A lower interest rate would not alter the minimum payment that is required each month and this is what is causing the short fall.

If I sell the house as it is, partly renovated, I would have to knock thousands off the asking price.

You miss the point. Buying a house for £150k and spending 15K on renovating it, means the house will be worth around £190k when I sell it. That makes a profit of £25K and I would have been debt free.

As I receive the full council tax benefit and do not have to pay council tax, it seemed silly to list it in with my income and then list it as outgoings. For the same reason I have not included the mortgage relief payments, just the £80 of the £200 mortgage payment that I have to pay each month.

Iquote]

Have you actually checked with benefits that you are entitled to claim with having £460 a month coming in from your lodgers, surely this is classed as income I'm not one of the benefit basher brigade but you need to be careful here and check you are up and above board or this would end up being another debt to pay back.

Robflh

Hi All

Firstly, my meeting has been rescheduled for Saturday. :wall:

Hi GeorgeUK
In my area, there are many new developments going up. A large number of which are for flats or as they are called these days, apartments. They can cost more then a three bedroom house and because of this, old fashioned family homes are increasing in price.

As there are very few big companies that employ a large number of people, any factory closing would not put enough people out of work for it to have an effect on house prices.

The local schools are two streets away, a University is two miles away, and busses run every 20 minutes. The nearest shop is a short walk away and so is the chip shop.

I would like, if possible, to buy a property in the area I live. Then if prices drop by ten percent my £60,000 would drop by the same amount. However, if I find the right place in the right area, the profit would be a lot more then I could ever make in my current location.

Hi misspoppy
Coving is not out of fashion, Aertex ceilings are and so are coloured bathroom suits but plain coving gives a room that something extra. I have a room with it and rooms without it, so I know which one looks better. As I have said before presentation is one of my keys to succeeding.

If you have never watched, a programme called The House Doctor, presented by Ann Maurice. I would suggest that you watch it or check out the website for it
www.housedoctor.co.uk/about-ann/index.php and see post 11 for this thread http://forums.moneysavingexpert.com/...ad.html?t=5383

As for not having my LBM (Light Bulb Moment) for must people that is the first time they realised the debt is or will get out of hand and that they need to do smoothing about it. That one I have already had. See Post 42 Paragraph 15 for my next big LBM.

As far as I know, I can move my mortgage from one property to another one and I will still get the mortgage relief payments but if I increase my mortgage, I will not get mortgage relief payments on the increased portion.

Hi changkra
You need to read the last part of post 33. You also have to remember that having them costs money, a bigger gas and electric bill for starters. Some of that money is paying for their part of the cable TV and some of mine.

Each time I need to get a replacement lodger I have to put an advert in the local papers and that is not cheap. Then there are all the times that they leave owing me rent money.

After they have left, you go to put on your headphones only to find they are missing. When the last one left, so did my digital camera.

How much of that money do I claim as sufferance pay for all the stress that they cause me?

saffronflowers

A remortgage is regarded as a new mortgage in the eyes of benefits, be very very careful.

Also you have not answered the question regarding the lodgers income as that is income, and I suspect as you are getting full HB benefit you have not actually informed your council

SF

misspoppy

Hi

I disagree a LBM is when you realise that a life of debt is not one that is sustainable and you plan to get debt free, you have not reached this point.

The point about coving is that it doesn't add thousands to the value but it could save you some money in the renovations. I don't need to watch the programe you use as your bible I am trying to help you save some money as you don't have any. Presentation is important but so is keeping up with your repayments I know which I would choose if it were me.

Storm

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.

Firstly - have you had a look at Martin's budget planner? It's great for looking at your true outgoings each month as it takes into consideration all the yearly stuff too.

The point with £25K or £28K debts doesn't actually come into it at the moment as you've not got access to the additional £3K you say you need to finish the renovations.

Where I also worry though, is that you're SoA is running at a monthly deficit already - what will happen if interest rates continue to rise this year? What will happen if a buyer pulls out and you've already given your lodgers notice? Your safety net to be honest doesn't seem all that big to me considering all the variables that you personally have no control over, including this:

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.

As friends of mine have found out first hand, selling a property is rarely quick and easy - they've been let down by buyers, had chains fall apart on them, even in one case had a household disaster (fire) which meant cancelling the sale until they could get the insurance work carried out. I worry about the fact that you're relying solely on the house sale to sort out your finances, and then you're hoping to do it again!

On another note with benefits - council tax - I think what people are getting at is that if your tenants are working adults then the amount of council tax owed would be based on all of you living there - and as the landlord (and presumably the only name on the current bill) you would be liable for back dated council tax, plus a possible investigation for fraud.

I don't know a thing about mortgage relief, but if there's the chance you could lose this by moving to a new property I strongly suggest getting advise asap!

Good luck!

[Deleted User]

One of my mates works by the same spurious logic he thinks and has acted upon the fact that his house has (maybe) gone up in value that he has an obligation to himself to borrow that further increase and blow it on cr*p.

Back to the original simily, your safety net is on fire at either end and the fire is spreading rapidly :P

angela6834

I too have read this thread with interest and thought twice about posting a reply. If you ask your creditors to freeze interest you will default and this will be noted on your credit file for 6 years. You will no longer be able to use the credit for which you have requested a freeze.

Once again, no one knows your personal circumstances but are you sure, if you can project manage a renovation...and subsequent sale and purchace of a property ( which we all know, can be the most stressful times ) that you are unable to return to work at all....even part time?

As your first post stated, you were not working as you needed rest and relaxation, in order to aid your recovery. Surely if you are renovating a property, you can not be getting this?

climbgirl

Storm wrote: »

Where I also worry though, is that you're SoA is running at a monthly deficit already - what will happen if interest rates continue to rise this year? What will happen if a buyer pulls out and you've already given your lodgers notice? Your safety net to be honest doesn't seem all that big to me considering all the variables that you personally have no control over.

As friends of mine have found out first hand, selling a property is rarely quick and easy - they've been let down by buyers, had chains fall apart on them, even in one case had a household disaster (fire) which meant cancelling the sale until they could get the insurance work carried out. I worry about the fact that you're relying solely on the house sale to sort out your finances, and then you're hoping to do it again!

I too have been debating about whether or not to post on this thread but I feel moved to. I don't think you can see the woods for the trees here, you're focusing on the property sale and new purchase as a quick fix to the debt problem and as Storm (and others) have so rightly pointed out, this is a flawed approach and is almost certainly not going to be the smooth ride you think it is. There are so many factors here you have no control over, making it a very risky strategy when there's so much debt at stake.

You seem so focused on the house sale approach that you're not dealing with the more immediate fact that you're spending more than you've got coming in each month. I think you need to take a few steps back and start looking at all the options. Call people like CCCS and Payplan and see if you can get some help from them.

You're writing off the advice that's given on this board so quickly, (most!) people here really know what they're talking about. I hope things work out for you, I really do.