Don't seem to be getting anywhere

asparagus1968

...and if you always do what you've always done, you'll always get what you've always got...


for your situation to change-you have to make some changes!


It sounds like you are so very down about the situation, good luck.

Brightspark87

Hi sorry to be a little harsh but you came here for advice. Its not easy to do but - you are self employed and get £300 a week. Now, do you work full time for this? Honestly? Could you get employment or increase your workload so you can try and bring more money in? Can you reduce the bills any further? This is the only way you can decrease your debt. With your self employment you earn c£8 an hour gross (based on a 37.5 working hour week). Therefore even if it was a cleaning job you should earn some more and have that extra coming in so you can keep the pets etc. You need to do something, else you will continue in this way for a long time.

her_welshness

Yes I think that Brightspark is right about this - a lot of the people on this forum defeat the debt because they are willing to step out of their comfort zone and do something extra, renting rooms, cleaning jobs, online surveys etc. You mentioned that your partner will be seeking part-time work, has this occurred?

Also if you are in reasonable shape have you thought about cycling to work? That amount for taxi's and buses is draining you.

It sounds NewStart as if you have been through the ringer over the past few years. It doesn't have to continue like this!

Wishing you all the best.

2014NewStart

Brightspark87 wrote: »

Hi sorry to be a little harsh but you came here for advice. Its not easy to do but - you are self employed and get £300 a week. Now, do you work full time for this? Honestly? Could you get employment or increase your workload so you can try and bring more money in? Can you reduce the bills any further? This is the only way you can decrease your debt. With your self employment you earn c£8 an hour gross (based on a 37.5 working hour week). Therefore even if it was a cleaning job you should earn some more and have that extra coming in so you can keep the pets etc. You need to do something, else you will continue in this way for a long time.

My charge out rate to most of my clients is around £120 per day plus 20% VAT which is equivalent to at least £16 per hour. If I do a short job which is quite rare I charge anywhere up to £25 (ex. VAT)/£30 per hour (including VAT) depending on the customer and job plus I charge for excessive travel time and costs in some cases. I have taken into account the payment of VAT (flat rate VAT is 14.5% of turnover), income tax and national insurance, the cost of running the business including the cost of advertising and marketing, accountancy fees, certifications, insurance and IT (purchased a new laptop in last few months costing £700, the last laptop cost £600 just 6 months earlier but did not meet my expectations, a monitor cost £200, a tablet cost £150, a phone 12 months ago cost £120 - I am not on a business plan so running costs are personal) and have made an allowance for holidays and downtime in working out how much I take home each week. I estimated the number of charged out days at 15 per month with monthly costs of £250. Tax and national insurance is another £250 making my take home £1,300 per month or as you say £300 per week.

her_welshness wrote: »

Yes I think that Brightspark is right about this - a lot of the people on this forum defeat the debt because they are willing to step out of their comfort zone and do something extra, renting rooms, cleaning jobs, online surveys etc. You mentioned that your partner will be seeking part-time work, has this occurred?

Also if you are in reasonable shape have you thought about cycling to work? That amount for taxi's and buses is draining you.

It sounds NewStart as if you have been through the ringer over the past few years. It doesn't have to continue like this!

Wishing you all the best.

Tried the cycling. Purchased one with a reasonable lock and it was stolen. They used bolt cutters on the lock. Purchased another one with a better lock and it was also stolen. They used bolt cutters on the chain holding the bike to a pole (only way of locking it at the location) and must have carried the bike away with the U lock holding the frame and wheels together. They were only cheap £150 bikes so I have no idea why they did that. They wouldn't have got much more than £50 for them. I wouldn't trust leaving the bike outside all night here. It's against the tenancy agreement to keep it in the common hallway and I live on the first floor. It's only a very short walk to town so I'll stick with walking and buses.

A day ticket for the bus network is £9 for travel before 9AM so the £95 monthly cost is reasonable in my opinion. I regularly use the ticket for travel to other locations on days that I am not working. As I use the ticket for personal travel I can't use it as a business expense. Taxi's are only once per week in two directions and for the OH to get to locations which are too far from public transport. The £300 travel costs would be the extra cost of taxi's if I were to move out of this rented flat and into my house which I don't intend to do. Where the house is buses are only hourly, don't start early or finish late so I'd really need a car.

Had a call on Friday from the tenant. The house was cold so they turned the heating on something they haven't done for 6 months. It doesn't work. Had an engineer visit and proposed a fix costing £120 which will come out of next months rent and the gas safety certificate is also due soon.

The OH is supposed to be picking this guinea pig up today but I think she's having second thoughts about it and seriously considering asking the owner to re-home it elsewhere.

enthusiasticsaver

Just looking at your SOA I cannot really understand why you do not sell up and then you would have a buffer of £53k approx., your income would just about cover your outgoings even if your OH did not get a job soon and you would have no debt. From the look of it the property brings you no profit and from the sound of the "flexible mortgage" it sounds as if you are increasing the amount borrowed each month by £300 which will impact on interest costs and erode your capital. It certainly does not look as if you are repaying it at all so the loan must be going up each month. Any small profit you are making on the rent is being eroded by maintenance costs so I cannot really see the point of keeping it as a rental property. I read that you do not want to sell but can you say why not?

enthusiasticsaver

2014NewStart wrote: »

It would cost far too much. It's a 3 bedroom semi detached house and I currently live in a 2 bedroom flat. It's not worth selling the house and buying the flat. The flat next to mine is on sale at £110,000. It's a leasehold with 87 years remaining with monthly service charges. I'm self employed and since I bought my house self certified mortgages are more difficult and I would say virtually impossible to obtain. I wouldn't qualify any more but I can keep my current mortgage forever.

My 3 bed house has got higher council tax, higher utility bills and higher maintenance costs. Currently the tenants pay all those costs and pay to maintain the gardens which costs £15 every 2 weeks over summer. The cost of transport would increase quite significantly. I currently don't have a car and would need one. I don't think I could run a car for less then £156 a month.

If I terminated their tenancy and moved in I would lose the £600 a month of rent that I get, save £100 a month in costs and save £475 a month in rent. The bills would go up by around £50 a month. I'd be worse off by at least £75 a month.

I've been upping income as much as possible a year ago my take home income was £250 a week and now it's £300 a week. I have tried increasing as much as possible. I don't think I can keep asking my clients to pay more but will try.

2014NewStart wrote: »

I don't think it would work..I'll try an SOA anyway..

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 260 What would be lodger income. £60/week.
Total monthly income.................... 1560

Monthly Expense Details
Mortgage................................ -300
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 150 It's a higher band and currently in arrears as I explained earlier. It should go down to 126 in April.
Electricity............................. 41 Higher usage
Gas..................................... 45 Higher usage
Oil..................................... 0
Water rates............................. 30 Higher charges and higher usage
Telephone (land line)................... 17
Mobile phone............................ 27
TV Licence.............................. 13
Satellite/Cable TV...................... 7
Internet Services....................... 5
Groceries etc. ......................... 230 Extra loo roll and misc. items
Clothing................................ 25
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 300 Too far from bus station so more taxis required.
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 30
Buildings insurance..................... 15 Currently rent received covers this.
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 7
Presents (birthday, christmas etc)...... 5
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 50
Emergency fund.......................... 0
Gardening............................... 15 I meant £15 every 2 weeks not weekly and summer only. I don't own a mower or hedge trimmer or any other gardening tools so it could also be what I would spend on tools.
Total monthly expenses.................. 759


Assets
Cash.................................... 5000
House value (Gross)..................... 139500
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 144500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 64500....(-300).....4.1
Total secured & HP debts...... 64500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Sainsburys.....................10189.....443.......4.1
Halifax........................9440......295.......6.9
Santander 1....................3614......36.1......0
Capital One....................317.......5.........3.9
Santander 2....................3231......21.9......0
Total unsecured debts..........26791.....801.......-


Monthly Budget Summary
Total monthly income.................... 1,560
Expenses (including HP & secured debts). 759
Available for debt repayments........... 801
Monthly UNsecured debt repayments....... 801
Amount short for making debt repayments. 0

Personal Balance Sheet Summary
Total assets (things you own)........... 144,500
Total HP & Secured debt................. -64,500
Total Unsecured debt.................... -26,791
Net Assets.............................. 53,209

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

I've had lodgers before. Never liked it. Stressed me out far too much

It's exactly the same. Still robbing Peter (the mortgage account) to pay Paul (the Sainsbury's loan) and I'd be sharing my house with someone who probably wants the heating on 24 hours a day, has long showers, leaves lights on, leaves a dreadful mess in kitchen and that house only has one bathroom. The 2 bed flat I'm renting for some reason has 2 bathrooms but the second bedroom is too small to be let to a lodger.

Basically the advice so far has been get rid of the pets (the OH would not be happy about that), cut out Amazon Video which I'll consider what alternatives are available, reduce grocery spend but as Christmas is approaching I think I'll keep it as is until next year. Sell or move into house which I'm reluctant to do as I can never get a mortgage again and really don't like sharing with lodgers.

If you are withdrawing £300 per month from the mortgage and the interest rate is 4.1% you will reach the £70k maximum on the mortgage in less than one year from now. This will mean you will no longer be able to withdraw the £300 per month so your income will drop even further and the net asset figure will be down to around £44k less costs of selling. Have you really thought through the implications of continuing in your current situation?

FireWyrm

I'm startled that you take money out of the house and thus diluting the equity for anything less than a life or death situation. Mortgages are one way, you pay them, as fast as possible. You dont remove money from them and devalue the asset like a private piggy bank. That situation is utterly unsustainable in the long run.

As EnthusiasticSaver points out, you are very quickly coming up on a nightmare scenario where you will be unable to withdraw the £300 AND worse, your equity is damaged beyond repair. You are already carrying an enormous burden and now slowly adding to it in order to service yet another burden. It's absurd. One or the other has to go and in this case, it has to be the property, it's the only way.

2014NewStart

enthusiasticsaver wrote: »

If you are withdrawing £300 per month from the mortgage and the interest rate is 4.1% you will reach the £70k maximum on the mortgage in less than one year from now. This will mean you will no longer be able to withdraw the £300 per month so your income will drop even further and the net asset figure will be down to around £44k less costs of selling. Have you really thought through the implications of continuing in your current situation?

One year. I need 3 years for the Halifax loan to be paid off. Should I do a balance transfer from my Barclaycard to the mortgage account, they've offered £4,750 at 0%, to get the balance down and extend the time?