tried but turned down at first hurdle! help!

Donury236

We own our house through the Scottish shared ownership scheme. We own 80% on a relatively low 94.5k mortgage.
I have just come back off maternity leave and be have debts. We thought oh job would be higher paid (offshore work) but he has not made above base.
We are paying out about £350 a month in minimum payments on just cards and interest on overdrafts...along with one loan.
We have been in and spoke to bank re additional borrowing on the mortgage, but thblegal fees involved make it counterproductive, so a loan was advised. Which we applied for and were turned down. The amount we asked for covered repaying all banking credit and also a small amount to fund and urgent repair to the roof(the pointing is gone and part is unstable). It would have been £248 a month...

The issue we have is that right now, we have just enough to feed the kids and clothe them each month. Getting this loan (17k) would have meant increase in house value and our debt being cleared. But as it is now we are going to end up just keeping debts to same, paying the minimum and having q house that is crumbling. The company we went to is also our mortgage provider.

I've also been given news I am now at risk of redundancy. And whilst I would get enough to see me side of the bills for 2 months...as it is if I don't find a job we can't make bills. If we refinanced them we could. But of course cannot tell the bank this.

I am feeling so much stress. I'm crying myself to sleep and I can't concentrate at work...which is not helpful considering I am about to be scored on performance.... I am already beening pulled up on absence (off with the kids when they are sick and been off with issues due to my back from labour) and I know they legally cannot use the time off for dependants in my scoring , but I am still stressed.
I hagevtried to get finances in order but the bank want to keep uwbin strangling debt. The guy we went in to see even said I had a good plan and we had healthynrqtings and now this:-(. We are going to go back and see them and explain we are going to possibly be in difficulty if we cannot refinance....but they say we can't even apply again for 6 months.


I don't know what to do!?!

runforlife

To be honest not getting the consolidation loan could be a blessing in disguise. Firstly it will help to fill in a Statement of Affairs. Then people will be able to offer constructive advice.

http://www.stoozing.com/msoc/soacalc.php

Once its done come back and post it on this thread.

Good luck

woodformoretrees

I agree with poster above - I know it feels like the end of the road but the re-financing being turned down may well be an absolute blessing and keeps the debt away from the home.
I've been there.
Hugs to you and well done for putting it all down in words x
Folk here can offer you some brilliant advice (although at times delivered in a very straightforward manner).

BillJones

Donury236 wrote: »

I hagevtried to get finances in order but the bank want to keep uwbin strangling debt. The guy we went in to see even said I had a good plan and we had healthynrqtings and now this:-(. We are going to go back and see them and explain we are going to possibly be in difficulty if we cannot refinance....but they say we can't even apply again for 6 months.


I don't know what to do!?!

The first step, as others have said, is to post a statement of affairs, so that people can see where changes can be made, to start you down your road to being debt free.

You do seem, though, to want to blame the bank for a situation that they have not caused. Part of getting yourself straight needs to be the understanding that it was your spending that got you to where you are now, and changes there are needed if you are going to be successful. Trying to put any blame onto the bank, for not lending you yet more money (when your debts are already crippling you) makes no sense.

They know that in a great many cases people will take out a consolidation loan, us some of it as a "treat", and then start borrowing on the cards and overdrafts again, ending up far worse off than they previously were.

Donury236

Sorry, been a bit busy at work. Here is it roughly. Just to add, that as its shared ownership that 20% of the value od the house belongs to the scottish exec - so 28k.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1662.89
Benefits................................ 364
Other income............................ 0
Total monthly income.................... 2026.89

Monthly Expense Details
Mortgage................................ 563
Secured/HP loan repayments.............. 250
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 155
Electricity............................. 160
Gas..................................... 0
Oil..................................... 120
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 100
TV Licence.............................. 13
Satellite/Cable TV...................... 25
Internet Services....................... 15
Groceries etc. ......................... 180
Clothing................................ 20
Petrol/diesel........................... 200
Road tax................................ 8.75
Car Insurance........................... 36
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 30
Contents insurance...................... 0
Life assurance ......................... 46
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2071.75


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 5988
Other assets............................ 0
Total Assets............................ 145988


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94847....(563)......4.99
Secured Debt.................. 6500.....(105)......7
Hire Purchase (HP) debt ...... 5988.....(145)......11
Total secured & HP debts...... 107335....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
bank 1 od......................2000......30........18
bank 2 od......................250.......6.........18
bank 3 od......................500.......6.........18
cat4...........................97........12........18
cat3...........................187.......15........29
cat2...........................280.......15........29
cat1...........................1330......50........39
cc3............................1722......50........18
cc2............................968.......45........18
cc1............................1052......25........18
Total unsecured debts..........8386......254.......-


Monthly Budget Summary
Total monthly income.................... 2,026.89
Expenses (including HP & secured debts). 2,071.75
Available for debt repayments........... -44.86
Monthly UNsecured debt repayments....... 254
Amount short for making debt repayments. -298.86

Personal Balance Sheet Summary
Total assets (things you own)........... 145,988
Total HP & Secured debt................. -107,335
Total Unsecured debt.................... -8,386
Net Assets.............................. 30,267

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

thecassman86

Hi OP :wave:

Donury236 wrote: »

Sorry, been a bit busy at work. Here is it roughly. Just to add, that as its shared ownership that 20% of the value od the house belongs to the scottish exec - so 28k.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1109
Partners monthly income after tax....... 1485
Benefits................................ 901
Other income............................ 0
Total monthly income.................... 3495

Monthly Expense Details
Mortgage................................ 563
Secured/HP loan repayments.............. 250
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 155
Electricity............................. 124 Look on comparison sites!! This is very high considering it's elec only.
Gas..................................... 0
Oil..................................... 120
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 100 Wow!! For 2? How long is left on each contract? Nowadays you can get contracts way cheaper (Or PAYG, if possible)
TV Licence.............................. 13
Satellite/Cable TV...................... 25 Personally, i'd get rid for the time being. These smaller payments add up.
Internet Services....................... 15
Groceries etc. ......................... 180
Clothing................................ 20
Petrol/diesel........................... 250
Road tax................................ 8.75
Car Insurance........................... 36 Check comparison sites.
Car maintenance (including MOT)......... 20 This is £240 per year? Seems high for one car...
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 1126
Other child related expenses............ 25
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 30 Presumably this includes contents? Again, check comparisons.
Contents insurance...................... 0
Life assurance ......................... 46This is very high. Are there any factors pushing this up? If you don't think there should be then shop around.
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 0 You need something in here, anything goes wrong and you have nothing to help you out.
Total monthly expenses.................. 3186.75

My annotations for your expenses are in red ... Now, for your debts...

Donury236 wrote: »

Unsecured Debts
Description....................Debt......Monthly...APR
bank 1 od......................2000......30........18
bank 2 od......................250.......6.........18
bank 3 od......................500.......6.........18
CAT 4..........................97........12........18
CAT 3..........................187.......15........29
CAT 2..........................280.......15........29
cat 1..........................3500......140.......39
Credit Card 3..................1722......50........18
Credit Card 2..................968.......45........17
Credit Card 1..................1052......24........18
Total unsecured debts..........10556.....343.......-

So often we see catalogs as being the main culprit for debt... The interest rates are always huge!

First of all, your 3 credit cards, what are the limits on these please? If you have room then put CAT2, CAT3 and CAT4 onto one of them (prefereably Credit Card 2) and get those 3 closed down... This will give you an extra £42/month to spend on your debt... Next step is to plough everything into CAT1... You're paying massive interest on that and it needs to go. Looking at your payments, they seem to be around what i'd expect the minimum to be so if you claw back from elsewhere you need to put it all into CAT1.


Good luck, it's not as bad as you think... It won't take too much of a change to finish above 0 balance each month.

You've had your lightbulb moment i think, it's now time to crack on!

Good luck!

jumperjohn

Donury236 wrote: »

Monthly income after tax................ 1109



Childcare/nursery....................... 1126

Hello!
Just a very quick observation. If you are made redundant it seems that you would be slightly better off, and I'm also assuming that your fuel cost will come down due to not commuting and doing the nursery run.

Donury236

thecassman86 :

For electric we cannot shop around as unfortunately for the first 6 months in the property the DD wasnt coming out and so we have a debit of 1k with the provider that we are paying off, so we are stuck . i have looked around but we have an old house with wiring from the 1970s (consumer unit is older than me!!!) and for the same appliances on the same rate as in our flat we are still paying more - the meter is 20 years old in auguat but they wont replace t as we are not dual fuel and no good wifi for a smart meter. Totally miffed at this.

Mobiles - My contract runs out in June and we are moving network as ours dont actually work where we live!

I have put it to OH on numerous occasions to get rid of the sky...He is considering it. Just need to prod him!!

Building insurance, yes, contains contents. I did shop around at renewal time but we are covered for up to 80k contents, and cant get it cheaper elsewhere.

Life insurance....thats me pushing the premiums up as im over weight and have issues from 2 pregnancies and EMCS.

Emergency fund - acutally have no cash for this

Credit cards are at their limits.

This is why the Mortgage guy advised after we spoke to him, about the loan, as it would reduce out goings and fix 2 serious faults in the house - 1 is a window water is !!!!ing in the other is the pointing above which as we live directly on the street is not good as already some bits have fallen onto the pavement below .

I have looked at the snowballing thingy before. So will look at that again.

What worrys me is that given the figures I have given above the mortgage guy said we are in good financial shape compared to some of the folk he sees.........thats worrying .

Donury236

thecassman86 wrote: »

Hi OP :wave:



My annotations for your expenses are in red ... Now, for your debts...



So often we see catalogs as being the main culprit for debt... The interest rates are always huge!

First of all, your 3 credit cards, what are the limits on these please? If you have room then put CAT2, CAT3 and CAT4 onto one of them (prefereably Credit Card 2) and get those 3 closed down... This will give you an extra £42/month to spend on your debt... Next step is to plough everything into CAT1... You're paying massive interest on that and it needs to go. Looking at your payments, they seem to be around what i'd expect the minimum to be so if you claw back from elsewhere you need to put it all into CAT1.


Good luck, it's not as bad as you think... It won't take too much of a change to finish above 0 balance each month.

You've had your lightbulb moment i think, it's now time to crack on!

Good luck!

jumperjohn wrote: »

Hello!
Just a very quick observation. If you are made redundant it seems that you would be slightly better off, and I'm also assuming that your fuel cost will come down due to not commuting and doing the nursery run.

You would think wouldnt you, but sadly not. We would lose the childcare element of tax credits and as I am the only driver my OH would have to make his own way to work, which involves bus, train bus, then bus , bus home again and costs about £15 a day..

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1485
Benefits................................ 364
Other income............................ 0
Total monthly income.................... 1849

Monthly Expense Details
Mortgage................................ 563
Secured/HP loan repayments.............. 250
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 155
Electricity............................. 124
Gas..................................... 0
Oil..................................... 120
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 100
TV Licence.............................. 13
Satellite/Cable TV...................... 25
Internet Services....................... 15
Groceries etc. ......................... 180
Clothing................................ 20
Petrol/diesel........................... 150
Road tax................................ 8.75
Car Insurance........................... 36
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 200
Childcare/nursery....................... 0
Other child related expenses............ 25
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 30
Contents insurance...................... 0
Life assurance ......................... 46
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2130.75


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 5988
Other assets............................ 0
Total Assets............................ 145988


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94847....(563)......4.99
Secured Debt.................. 6500.....(105)......7
Hire Purchase (HP) debt ...... 5988.....(145)......11
Total secured & HP debts...... 107335....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
bank 1 od......................2000......30........18
bank 2 od......................250.......6.........18
bank 3 od......................500.......6.........18
Total unsecured debts..........2750......42........-


Monthly Budget Summary
Total monthly income.................... 1,849
Expenses (including HP & secured debts). 2,130.75
Available for debt repayments........... -281.75
Monthly UNsecured debt repayments....... 42
Amount short for making debt repayments. -323.75

Personal Balance Sheet Summary
Total assets (things you own)........... 145,988
Total HP & Secured debt................. -107,335
Total Unsecured debt.................... -2,750
Net Assets.............................. 35,903

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

Its deleted the card debt for some reason! argh

thecassman86

Donury236 wrote: »

What worrys me is that given the figures I have given above the mortgage guy said we are in good financial shape compared to some of the folk he sees.........thats worrying .

Oh, we have seen far worse on this board. Debts of over £60k and their expenditure is £2k per month higher than their income... And yet, despite that, the forum is littered with people who have beaten it. As Martin says, all debt is solvable! :money:

One question i missed before - council tax - is that 10 monthly or 12 monthly?

Just extending jumperjohn's suggestion - if you stopped work it'd immediately save you the childcare costs - you could still drive your husband to work, he wouldn't need to get buses etc. So your petrol cost as of now will remain unchanged (maybe go down even)... I understand your benefits will go down but you being at home more often will also allow you to claw back on groceries too - it's always cheaper with someone at home all day to meal plan etc.

Does OH have overtime possibilities or anything? I know it'll mean more work for him but if he can find that extra £200-£300 per month to cover the benefits lost then that'd be a great boost.

thecassman86

Perhaps, going down the "stop your job" route... Is there a job you could get in the evenings or weekends? That way, you'll be available all day so won't need childcare cover, yet, you'll work when your OH is home... Thus, bringing in that extra few hundred pounds... Does you current job allow for different shifts perhaps?