SOA - Help Please!

enthusiasticsaver

I would have to agree with Andy in that this is a situation which needs urgently resolving as you are heavily overextended. What did you take the loans out for? My strong suspicion is that they were taken out to repay existing debts (ie consolidation loans) which effectively have got you to the point you are where you are no longer able to make minimum payments on your borrowing. You have no emergency savings - there are things missing off the SOA and it looks like you have already trimmed it significantly. I would suggest you sell your home and repay the mortgage, secured loan and unsecured loan and as much of the credit cards as possible. The only other option is moving back into it as the rent is crippling you? The small amount of monthly profit you are making on the btl is insufficient to cover your other outgoings and if interest rates rise then you will have even less.

Sparkles87

Thank you for all your replies, I'm working through to answer all the questions.

We have contents in our rented property, we don't need buildings on our flat as it's included in the management fee.

I have life insurance and mortgage insurance, my husband does not have life as he was refused on health grounds. It's £31.14 a month

No TV licence, no TV aerial in the property.

No tax on the car, maintenance - we've paid out quite a bit recently so hoping it won't need anymore in the short term. Insurance, I am owed money from my parents which will cover this year's renewal in October.

Clothing will be replaced through birthdays and Christmas until next year, so I will add that back in around April when my wage should increase.

The loans are the original amounts, I think the big loan is 6 years left and the smaller one is 2.5 years.

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We were aiming to sell the property as my husband has been relocated 200 miles for work. The rent we receive just covers costs at present, but it's still a repayment mortgage.

I can't increase my income until next year, it's maternity allowance and I'm not allowed to work alongside it.

Car is definitely one to look at. It's two years into a four year lease but I believe we could surrender it, I'd have to look into what that would cost. Although, we have no money available to replace it at present.

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I thought the water rates were exceptionally high, that was our first month's bill in the rented property, but we did have a badly leaking tap so I'm hoping it will reduce this month.

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The unsecured debts are all currently 0% through some careful tarting, first lot end April 2016 and the rest are 2017/18 so thankfully we have a lot of breathing space there. No defaults.

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I actually have no idea of the tax implications of us renting our property, we were given permission to let it for one year and have had a tenant in it for four months. It is on the market for potential sale but we're currently unsure if this is the best way to go.

[Deleted User]

Sparkles87 wrote: »

No TV licence, no TV aerial in the property.

Just to be sure, you are aware that ANY live viewing requires a licence, irrespective of how the live viewing is received?

Satellite, cable, online, or whatever, if it's a live broadcast, it requires a licence.

Likewise, whatever channel.

but we did have a badly leaking tap so I'm hoping it will reduce this month.

So you are on a water meter?

Sparkles87

To the debating posts between Andy and Happy, this is exactly the conflict I have in my head between "it's an utter disaster" to "this is temporary and there must be a solution"!

Mobile will be reducing to £40 shortly but OH has to have a contract as a condition of his job and mine is usually taken off business expenses but I'm not self-employed during at present so have to pay it.

Unfortunately, there isn't 33k equity... we owe 15% of the value to the building company in 5.5 years time. We were naive first time buyers who got persuaded into a poor arrangement prior to HomeBuy being available. We also have a 4k buyout on our fixed rate mortgage, so selling would net us maybe 6k tops

The service charge is for our owned property.

The rented house is very cheap for the area and still 25 miles from husband's work. Rent for 2-beds nearer his workplace are £900+ a month.

He's moved for a promotion and increased his income by quite a margin in the past year but has continued to spend unnecessarily and with me now being limited to maternity allowance due to redundancy, we've come unstuck.

The loans...
The big one was half for our property deposit, we originally were gifted some money from my parents which we needed to repay to them due to their circumstances changing. The remainder was debt consolidation.

The smaller loan was for my previous car, I am owed 2k back towards this from my parents as it was used as trade in towards my mother's car.

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There is an option that myself and our children could move back into the owned property until next year when I return to work, and my husband could find a house share near work until then.
The house share would be around £600 a month and we could get rid of the car and I would remain sharing the car with my mother (so wouldn't be given the 2k but then I wouldn't need it for insurance).
The other costs then would drop slightly; as water was £70 a quarter, council tax £120 a month and gas/elec £55 per month.

Sparkles87

Bedsit_Bob wrote: »

Just to be sure, you are aware that ANY live viewing requires a licence, irrespective of how the live viewing is received?

Satellite, cable, online, or whatever, if it's a live broadcast, it requires a licence.

Likewise, whatever channel.

So you are on a water meter?

We only have an amazon firestick which uses prime and netflix so I believe we don't need one?


Yes it's metered, it was for 13 cubic metres and sewerage costs last month.

[Deleted User]

Sparkles87 wrote: »

Mobile will be reducing to £40 shortly but OH has to have a contract as a condition of his job

By sheer coincidence, I received a Virgin Media flyer through the door this morning, offering a £10pm, 30 day rolling contract sim, giving:-

1GB data
2500 minutes
Unlimited texts
Unlimited minutes to 08 numbers

Would this be enough to satisfy you OH's company?

BTW. I'm curious. If a contract mobile is required for his job, why isn't his company providing it?

Sparkles87

Bedsit_Bob wrote: »

By sheer coincidence, I received a Virgin Media flyer through the door this morning, offering a £10pm, 30 day rolling contract sim, giving:-

1GB data
2500 minutes
Unlimited texts
Unlimited minutes to 08 numbers

Would this be enough to satisfy you OH's company?

BTW. I'm curious. If a contract mobile is required for his job, why isn't his company providing it?

I have queried this, especially given the nature of his job! I think cancelling his contract which is up for renewal would help. I'm happy to use a rolling contract if I can keep my number.

[Deleted User]

Sparkles87 wrote: »

I'm happy to use a rolling contract if I can keep my number.

"Porting" mobile numbers is pretty straightforward these days.

If you can go PAYG, there are some pretty good deals.

If you ring a lot of landline numbers (01, 02, 03), Virgin Big Talk is a good one, as it gives unlimited landline calls, 120 minutes of mobile to mobile calls, for £10pm, and you keep the £10 topup forever.

andyfromotley

HappyMJ wrote: »

I use a 0% on purchases credit card and put the groceries and a few other things on the card adding up to around my cash flow shortfall. Then the cash that I've got from income I use to pay the minimum payments required.

After 2 years and 3 months at an overspend of £408 a month they'll owe and extra £11,016 more on credit cards but....they are paying out the following...

Mortgage................................ 380
Secured/HP loan repayments.............. 274
Big loan.......................15000.....282.......0 53 months to go
Small loan.....................5000......196.......0 25 months to go
Cards..........................6000......200...... .0 30 months to go

They are paying out £1,332 per month and after 2 years and 3 month they'll owe £35.964 less than they do now.

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I can't tell you how much i hate this idea!! Oh and you won't owe £35k less, The mortgage and secured loan are not interest free. You will have paid off £15549 of your credit cards HOWEVER you will have added the £11k on credit cards to cover your monthly shortfall. You will have paid of significantly less of your secured loan and mortgage dependant upon where you are in the repayment period. Given your circumstances i am fairly confident that nearly all of your payments will be going on interest. You will be nowhere near being debt free!!!

Even if the maths worked, which i don't think it does, i hate it for other reasons too. It is so high risk and depends on nothing going wrong. No reduction in income, no emergencies, banking on your tenant paying, banking on your tenant staying. It relies on your ability to keep getting credit and to keep it on 0% deals. As you become increasingly indebted this will become harder and harder. Its an old saying, but when you are in hole the first thing to do is stop digging!

I'm not convinced at all that you know your figures on the house. Most mortgage companies charge higher interest after a set period (nationwide charge 1% extra after you have rented it for 6 months) You can't claim tax on the capital part of your mortgage etc etc I suspect that when you look at it you at best break even or possibly have a small deficit.

It sounds like you are in a terrible deal with your house and selling will not solve all of your problems. I would still look at selling it though.

I stand by my position that you are drowning in debt and in the middle of a FINANCIAL EMERGENCY. Its not about not understanding a geared SOA which is just a fancy way of saying i'm living on debt, i'm insolvent and i hope its going to come good! The solution is not to take on more debt to support this crazy position.

I would urge you to speak to Stepchange or Christians Against Poverty. They are charities which specialise in debt relief. I suspect that this may be the only realistic option for you now.

As always what you choose to do is up to you, i hope this helps, andy.

Sparkles87

Bedsit_Bob wrote: »

"Porting" mobile numbers is pretty straightforward these days.

If you can go PAYG, there are some pretty good deals.

If you ring a lot of landline numbers (01, 02, 03), Virgin Big Talk is a good one, as it gives unlimited landline calls, 120 minutes of mobile to mobile calls, for £10pm, and you keep the £10 topup forever.

I use my mobile for everything, we don't have a phone plugged into our landline at the moment. So would need to cover 0845 type numbers too, as there isn't always a landline option.