£500,000 of debt - repay or go deeper?

Dingo12

I think on balance that, although I am relaxed about the amount of debt I have currently, I would be happier reducing the monthly liability before going further. So with that in mind I'll look to clear the CC debt first then build up more cash. If things continue to go well I'll save for a further BTL deposit.


Seems less risky this way, more cash available and £410 per month less that I am on the hook for. Thanks for the opinions/feedback.

Iwillsucceed_2

Hi "Deleted User"....
I am looking 'beyond debts' I guess....
Yes, I am impressed because it appears to me that this guy has taken a lot of risks in an income of £3000 a month!
£500000 it's a lot of money, and if he gets in trouble he can afford to pay off his debts by selling the properties as they have a large LTV...However, I do hope he has all sort of insurances
in place.

I have noticed that in this forum. there are a number of people who challenge themselves to pay their debts and when they do so, they change their focus on paying their mortgage off or investing.... here we might not be financial advisors but I do believe that we can learn from others.

Regards

Deleted User wrote: »

Iwillsucceed, you're impressed with someone who has half a million pounds of debt ?

Iwillsucceed_2

Hi Dingo...

I personally have a few BTls.... I have noticed that your investments have increased in value at least by 50% whereas my properties have kept their value

My are in repayments and I have recently made a capital repayment of £10000 in one property so I decrease the loan LTV and this has allowed me to remortgage from 6% to a better deal 3%.

I have a credit card with 10000 at 0% , so I do want to pay off that first before re-mortgaging my current property to a BTl and buy a new private home.

Regards

Dingo12 wrote: »

I think on balance that, although I am relaxed about the amount of debt I have currently, I would be happier reducing the monthly liability before going further. So with that in mind I'll look to clear the CC debt first then build up more cash. If things continue to go well I'll save for a further BTL deposit.


Seems less risky this way, more cash available and £410 per month less that I am on the hook for. Thanks for the opinions/feedback.

Nargleblast

Dingo - when reviewing your financial situation, think about what you would do if you suddenly lost your job. It can happen to anyone, companies go bust or start laying off staff to cut costs. Or, heaven forbid, you get an illness or injury which means you cannot work ever again. Make sure you have savings to cover you for a few months, and try to get credit card and loan balances down. We live in uncertain times and you cannot assume that if you put your investment properties up for sale you would get what you wanted for them. Maybe a chat with an accountant or independent financial adviser would help.

northerner999

I found this a useful thread, not least because about four years ago after returning to the UK after living abroad I found myself pondering whether to use money I'd saved up in that time to try and buy a second property, to reduce the mortgage on my home, invest/save or wipe out some money I owed to my parents which had been leant to me for the deposit.

In the end I went for the latter (my parents, who are now retired, wanted to buy a static caravan at a seaside resort so it was a no brainer, and morally what I felt I had to do anyway) along with taking a few grand off my current mortgage (needed to get a better deal) and some investments in a new car/laptop needed for work.

Four years later I find myself content with that call. Through 0% c-card deals I now have close £5K in unsecured debt, which is why I read this forum so often, and after a redundancy scare had the LBM that just maintaining it by shifting to 0% deals still leaves you vulnerable should your job suddenly be taken away. I've got good equity and comfortable with repayments and overpayments, but after a few years of not being too bothered have realised it's something I'd like out the way for peace of mind and best options in the future.

So I think the original poster is right to get to the view of paying off the c-card. The surplus means you could save up that amount within a couple of months (though I'd wait til April before paying it, stick it in your best paying easy access savings account). I imagine having that debt paid off would increase your chances of getting a good deal when remortgaging any of your current properties, or looking to add to your portfolio.

dancingfairy

It depends on your appetite to risk. Clearly the more risks you take the more reward there is likely to be, but also a bigger downside. Only you know how much debt you are prepared to carry and what the risks to your lifestyle etc would be.
You don't need to answer on here but what risks do you face and how could you mitigate them? What are your prepared to risk/not risk?
For example how would you cope if you lost your job, or you couldn't find a tenant or your tenant trashed the place? How could you mitigate these risks?
Maybe the house buying , selling and renting board would be better to discuss this or the investment board as generally this board is for people struggling with debt and wanting to become debt free and I can understand for some people who are unable to afford the basics, a post like yours could upset them (albeit unintentionally).
Regards
df

[Deleted User]

willsucceed, yes, we can learn how to get in debt..as if we need anyone to teach us. Anybody can get fancy financial wheeler dealings and build huge debt..personally im impressed with someone who can hold it together on a limted income and not boast about the debt they have. You admire people who rack up eye watering debt, each to his own I guess.

Iwillsucceed_2

Hi, there is good debt and bad debt

You have said something key here: 'each to his own I guess'.

Have a lovely evening.

Deleted User wrote: »

willsucceed, yes, we can learn how to get in debt..as if we need anyone to teach us. Anybody can get fancy financial wheeler dealings and build huge debt..personally im impressed with someone who can hold it together on a limted income and not boast about the debt they have. You admire people who rack up eye watering debt, each to his own I guess.

Killick

What was it someone once said?


If you owe the banks a few grand and cant pay, you have a problem. If you owe the banks a few million and cant pay, they have a problem.


Not sure if that's true but it sounds good :-)

Dingo12

So guys I was planning to pay back my balance transfer debt (have saved up most of it into my savings account minus about 4k) but instead about 2 weeks ago I rolled this up into a fee free 12 month balance transfer.


What should I do with the money, keep it in my savings account earning 0.2% or what, at the moment I am itching to take it out and invest it in something but not sure I want to take on risk, also not sure that if I don't take any risk and put it in a savings account where I get a pittance that it is even worth it, maybe I should just pay it back.


I am completely unmaterialistic and unimpulsive so absolutely zero chance of me spending this willy nilly, would either invest it, save it or pay it back. Roughly £7k.