As promised here is my SOA

kgeoff

Hi there again guys,

This is a continuation of my original post (on 6/7/2007 at 12:06pm). As stated previously I am in the process of remortgaging (for a better fixed rate deal). I am in a dilema and want a bit of advice as what to do for the best. I have £23,305 of secured debt (loan with 1st plus with 23years left to pay!!!!) and £14,365 of unsecured debt (credit cards and a small interest free loan). I am only covering the mimmum payments on the credit cards (The virgin APR of 27.9%APR is killing me!!!!!!) and am now paying out more than I have coming in.

I have approximately £70K equity in my flat (which is worth approx 140k and my os mortgage at present is 70k) and I'm wondering whether to remortgage and include this debt as well. I know that you guys don't recommend this course of action but I'm finding it a real struggle to keep up with my repayments and have stated to fall into arrears on my ground rent and service charge payments (my only non direct debit outgoing). please take a look at the following SOA and any advice would be greatly appreciated. My monthly repayments on loans and credit cards alone is £619.79. If I was to remortgage then I'm sure I could greatly reduce this figure.

Monthly Income - £1,634.69

Monthly Outgoings

Mortgage - £602.10
Service Charge & Ground Rent - £54.94
Broadband - £18.00
TV Licence - £11.37
Gas - £72.00
Electricity - £44.00
Home Maintenance Cover - £30.43
Council Tax - £80.00
Cooker Insurance - £3.55
Water Rates - £29.70
Magazine Subscription - £2.04
Car Insurance - £29.58
Home Insurance - £8.14
Carphone Warehouse - £50
Food - £45.00
Petrol - £45.00
Sports - £60.00

Credit Cards

Virgin (27.9%APR) - £113.90 monthly. Balance £5,048.07
Egg (17.9%APR) - £83.70 monthly. Balance £4,067.90
Tesco (16.6% APR) - £72.00 monthly. Balance £2,598.00
Capital One (16.9 APR) - £5.00 monthly. Balance £27.37
John Lewis Store Card (16.9 APR) - £71.00 monthly. Balance £1,424.03

Loans

First Plus - £219.90 monthly. Balance £23,305.96 (23 years left.)
Black Horse (0%) - £50 monthly. Balance £1200 (2 years left)

Total debt - £36,471.33
Total monthly outgoings. £1,751.35

RAS

Hi

It would be one thing putting that first plus loan into the mortage, because you would not be increasing your secure debt any further and you would not be increasing the term, but anything else would be unwise.

First thought regarding is have your CCs is that you might have a little spar capacity on your somewhat lower APR cards to which you could move some of the debt? Say you have £73 capacity on Cap one, pay that amount of the Virgin card with the Cap one card and your monthly repayments go down.

Martin has a really good article on the credit card shuffle on the site.

RAS

kgeoff wrote: »

Monthly Income - £1,634.69

Monthly Outgoings

Mortgage - £602.10 - is this interest only or repayment
Service Charge & Ground Rent - £54.94
Broadband - £18.00
TV Licence - £11.37
Gas - £72.00 - this is massive - can you look at changing supplier or cutting this back
Electricity - £44.00 not massive but still high - can you change supplier
Home Maintenance Cover - £30.43 - what is this?
Council Tax - £80.00 - are you getting single persons allowance?
Cooker Insurance - £3.55 - get rid of this if you really want stick this amount in an ISA
Water Rates - £29.70
Magazine Subscription - £2.04 - get rid of this
Car Insurance - £29.58
Home Insurance - £8.14
Carphone Warehouse - £50 - cut this back to a lower deal
Food - £45.00 - this is scarily low
Petrol - £45.00
Sports - £60.00 - can you cut this for a few months - you cannot afford it?

Credit Cards

Virgin (27.9%APR) - £113.90 monthly. Balance £5,048.07
Egg (17.9%APR) - £83.70 monthly. Balance £4,067.90 - limit?
Tesco (16.6% APR) - £72.00 monthly. Balance £2,598.00 limit?
Capital One (16.9 APR) - £5.00 monthly. Balance £27.37 limit?
John Lewis Store Card (16.9 APR) - £71.00 monthly. Balance £1,424.03

Loans

First Plus - £219.90 monthly. Balance £23,305.96 (23 years left.)
Black Horse (0%) - £50 monthly. Balance £1200 (2 years left)

Total debt - £36,471.33
Total monthly outgoings. £1,751.35

Hi

First thoughts on savings.

How many rooms do you have? Could you take a lodger? It means tax free extra income. Any other way of getting extra income even via an odd shift in a supermarket or pub?

Re the first pkus loan, what are the early redemption penalties??

Try shifting some of your virgin debt to the other cards and put the differnt amounts into the snowball on www.whatsthecost.com.

Somehow, you have got to make your income exceed your outgoings. Otherwise, you are looking at a DMP. That will not help your credit rating and is not really necessary.

RAS

Here is chevs list of links for extra income sources


I now have an updated list as a kind poster showed me that some of my links weren't correct so here it is! These are the sites I use, but there are others.

www.lightspeedpanel.com - this is a survey site, where you get points which turn into vouchers (you choose). May not help with the cash flow, but the vouchers could be saved towards birthday/xmas or given as presents.

www.ciao.co.uk - survey site that gives money. A bit fits and starts ie no surveys for a couple of weeks, then three or four the same day.

www.yougov.com - again paid surveys. However takes a while to get to the minimum payout level

www.pigsback.co.uk - this is a points site, ie they give you points for buying things via their site. BUT you also get points for signing up for news letters (some of which are even interesting!), and also for clicking on adverts with pink borders. I have spent NOTHING with them but got a £10 voucher through this week (only been registered since January). There is also a thread in the freebies section, which gives you all the daily answers to the competitions so you can have a better chance of winning on them.

www.mutualpoints.com - another points for clicks site. You can also buy things via their site and get points too. For a long time, I just clicked the links in the emails they send you, and that gets you 5 points. At 3000 points you get £20 I think. You can do searches via their site and that gets you points too.

www.quidco.com - this is a cash back site, so very good, for checking if any potential new insurers (ie if you have checked your contents insurance say and found a new provider), are offering cash back. Eg Lloyds was offering £120 cashback on new policies at one point (the offers do change). You can also get small amounts of cash again for doing searches via their site. You can earn 52p a day by doing this. Every little helps.

www.greasypalm.co.uk - another cash back site, where you can do searches and get small amounts of money. But it all adds up. I think you can get about 50p a day on there for nothing. Minimum payout is £20 I think, but you can sign up to survey sites via there, and get extra money that way for nothing.

Are you in the correct banding for your council tax? Again there is an article by Martin on the main website about how to go about checking this. If you are in the wrong band and due a rebate, it is for all the year you have been living in the house since 1991, so this can be several thousand pounds back.

Hope this helps. Of course both you and OH can sign up to most of them (ie the survey sites), though I am not sure about some of the points sites. I know pigsback you can have two accounts at the same address, but some of the others only say one per household.

Best of luck
chev

kgeoff

Hi Ras,

Thanks so much for you're input it's greatly appreciated. I'll tackle your points on my SOA first.

1. Mortgage is repayment.
2. Gas is massive because according to British Gas they had grossly underestimated my gas bill for so long that to recoup this arrears they had to increase my monthly payment to £72. I have just received a letter from them saying that from next month I will now pay £50 a month.
3. Will look at changing both Gas and Electricity as they are both with Britiish Gas.
4. Home maintenance cover is boiler, Plumbing and electrical cover by British gas should anything go wrong they'll repair it free of charge.
5. Yes I receive the 25% single persons discount already!!!!
6. Will cancel the cooker Insurance & Magazine subs today.
7. Will telephone CW for a better Mobile deal.
8. well spotted made a mistake the food is actually £45 a week!!!
9. Will try to cut out sports but it's the only leisure activity I have!!!

Credit card limits
Virgin £6,200
Egg £4,200
Tesco £3,000
Capital One £200
Barclaycard £2,050 (This is a brand new card which I was going to use to do a balance transfer of my Virgin Credit card)

I applied for a barclaycard because of their 0% deal until next year. Unfortunately they only gave me a £2,050 limit so I wasn't sure whether it would still be worthwhile transferring some of the virgin credit card debt over. Is this a good idea?

Unfortunately I am unable to take on a lodger as I live in a one bedroom flat.

The first Plus Loan is a strange one. There is no early redemption fee. The original loan was for £18500 + payment protection of 3687.05 (Total £22,187.05.) The total settlement figure (as at 8/6/2007) is £23,305.96 (still more than the original bloody loan and I have been paying this off since Dec 2003!!!!!!)

I will look at transferring the 1st plus loan onto my mortgage. I totally understand what you are saying about the credit cards. I will look at seeing whether I can shuffle any of the cards around. I've got the Barclaycard with 0% till next July so I will look at transferring as much as the Barclaycard limit will allow.

Thank you so much for all your extra income tips I will sign up to as many as I can.

Thanks Ras I will have a serious look at all suggestions and hopefully slowly turn things around. I appreciate the time you spent replying - Thanks again

Geoff

savvykaz

Hi Geoff and welcome to MSE :hello:

I know that consolidation isn't usually recommended but looking at your 1st plus loan, this might be the most practical solution. If you carry on paying them £200 a month for the next 23 years, you will repay £60,100 :eek: As this loan is secured on your property anyway, what's the difference between this and a re-mortgage to include the loan? I bet you'll pay loads less? We too have a loan with 1st plus, but thankfully it's only got 7 :eek: years left to run. I SOOOO wish we hadn't taken it out, but at the time it seemed the only option

RAS

You are welcome.

Looking at your credit cards

This is one option

NOW

Virgin (27.9%APR) - £113.90 Balance £5,048.07
Egg (17.9%APR) - £83.70 monthly. Balance £4,067.90 - £4,200
Tesco (16.6% APR) - £72.00 monthly. Balance £2,598.00 £3,000
Capital One (16.9 APR) - £5.00 monthly. Balance £27.37 £200

Plus Barclaycard £2,050 (0%) until July 08

Suggest you stick this into the snowball on whatsthe cost and your monthly outgoings could wel be within your income bracket.

Barclaycard balance 0 limit £2,000 (0%) until July 08
Virgin (27.9%APR) - Balance £2,478.07
Egg (17.9%APR) - Balance £4,167.90 - £4,200
Tesco (16.6% APR) - Balance £2,998.00 £3,000
Capital One (16.9 APR) Balance £197.37 £200

John Lewis Store Card (16.9 APR) - £71.00 monthly. Balance £1,424.03

obviously your minimums on the cheaper cards go up, but your total minimum will come down.

Then you need a few extras to throw at the Virgin card, which is the savings from your spends, even short term. I would suggest that you reduce the limit on Virgin to £2,500 as soon as possible and in a couple of months see if you can get another 0% or low life balance card so you can rid of the Virgin card altogether.

Alternatively, you could be cheeky and ring Virgin and tel them that you are going to halve your balance with them as you have cheaper credit and see what sort of deal they can offer.

raq

5 of us in family and spend £65.00 a week and eat well.

I gather it is just yourself. Do you do homemade meals, especially for the goodness ??? Also this is much cheaper

See yours is £45.00 a month. How do you survive on £11.00 a week. Any family that you can go to for dinner once in a while

Kaz2904

Rather than phoning carphone warehouse, look online at their clearance deals, get the cheapest available tarrif and sell the phone. Just don't forget to claim your chequeback! If you go through quidco they are offering £60 cashback at the moment.
Unfortunately, having read through your soa and working it out with your £45 a week for food (so £180 a month), it is not pretty.
I worked on £50 for gas, and figured you'd have got rid of home maintenance, cooker insurance, magazines and mobile. After all this, you are still £133.64 down.

You need to massively cut your food. I would get the secured loan on your mortgage.

Out of interest, is there any flexibility to your mortgage? If you are able to overpay it then it could be a useful tool to snowball with just using it as a flexible loan. If you were to borrow all of it against the mortgage then you would pay a lower rate of interest.
What I would then recommend is to treat your former debts as a separate entity to the mortgage and each month pay off as much as you can.
Just a quick run through showed £106,471.33 mortgage over 15 years = £898.47 a month. You would still be paying your 0% loan back for the duration at £50 a month but would give you breathing space.
You would also be debt and mortgage free in 15 years!