help i'm new will sorting debts affect renew of mortage?

charliemouse

Hi

sorry i am new here.....can someone help me please?

My husband and myself have debits of £25,000 spread between us on various different credit cards & inc a £6000 overdraft which we are using to survive on.

my mortage is upfor renewal at the end of the year (DEC) when the fixed rate ends..... At the moment we are just paying the min amount on credit cards and keeping up with the mortage payments etc..... however we are having to use credit cards to put fuel in the cars & to buy food etc. we have no life & i am 6 months pregnant.....I really need to sort our debts out.

Does anyone know or whether sorting out our debits will effect us being able to renew our mortage? or is it best to wait until the mortage is renewed?

I just don't know where to start..can some one help.

climbgirl

I think it will only be adversely affected if you have defaults or CCJs on your credit rating. If you're making payments and not missing any, it should be ok.

However, they will look at your ability to pay and any debts outstanding will come into that. So it might help us if we can see your full SOA - all your debts (details of cards and limits), your incomings and your FULL budget. Everything you spend, and I mean everything - food, all bills, clothing etc.

We'll be able to help you find ways to make savings and pay off the debts.

See SouthernScousers post at the top of the board for first timers - that tells you what we need to help!

madmoney_2

hi hun, im not sure i can help with this as i know zilch about mortgages, but just wanted to say hi and good luck, some other knowledgeable peeps shud be along shortly. You need to post a statemnet of affairs (see southernscousers sticky on how to do this), so we can help you budget and see what needs to be paid off first etc. hope this helps xxx

rayday2

It could effect your mortgage in the way of if they look at your outgoings and incomings they may deem you cannot afford repayments. This happened to my sister even though there was equity in her house they decided they were over commited.

It really depends on how grim your finances on paper are.

charliemouse

Ok here goes....... having included things like clothes as we don't have the money to buy things like this :-(
thanks for your help

Monthly Incomings:

My salary - £1,700
Partners salary - £1000 (varies as husband self employed) never more than £1200
Benefits - £0

Total - £2,700


Monthly Outgoings:

Mortgage - £992.23 (£182,000)
Council Tax - £117.00
Payment Shield House & Contents Insurance - £36.58
Payment Shield Critcal illness & life insurance ( 2 People 1 x self employed, 1 x employed) - £191.07 break down of critical illness £42.58 + £36.51..... Life insirance (2 people) £70.04
Unemployment cover (me only as higest earner with specialist job) £17.19


Self employment National Insurance - £10 forgot to add this originally

Southern trent Water - £20
Southern Electric - £27.00
Heating Oil (no gas etc in village)- £40.00

TV License - £10.99
BT Phone - £50.00
Mobile phone x 2 - £50.00
Orange broadband - £19.99

Pet Insurance x 3 dogs - £80.00
Dog food (special diet) x 3 dogs - £130

Denplan (husband) - £11.50


Car Insurance - £30.82
Car Tax - £15.00
Car Servicing (2 x year) - guessing at around - £35.00
Car MOT - £7.00
Car Diesel - £130.00

Van insurance - £30.00
Van Tax - £15.00
Van Servicing (2 x year) - guessing at around - £35.00
Van MOT - £7.00
Van Diesel - £180.00


Sky £21.99

Food - £350.00

Total: £2623.68


DEBITS

Egg CC – Min Payment £145.00 - Balance £7,065 (limit £7,500) APR 0% 11mths

Egg CC – Min Payment £135.00 - Balance £6,697.67 (limit £10,000) APR 17.9% variable

MBNA – Min Payment £??????? - Balance £1152.75 (limit £8,000) APR 19% Variable

Overdraft - £6200 (at the moment) (limit £5,000) Barclays currently being charged £30 each time for being over limit.

total Min payments: £301.52+
Total Debit: 21115.42 at the moment, but seems to go up by the day!

hope this is everything you need?
I am scared to contact any of the credit card companies as i don't want it to effect our mortage renewal - i am worried as from dec my wage will be reduced for 3 months (6 weeks at 90% pay & then £112 fo 6 weeks) due to having my baby

climbgirl

Monthly Outgoings:
Mortgage - £992.23
Council Tax - £40.00
Payment Shield Unemployment insurance, Critcal illness & life insurance - £201.90
BT Phone - £50.00
Mobile phone x 2 - £50.00
Orange broadband - £19.99
Pet Insurance x 3 dogs - £80.00
Dog food (special diet) x 3 dogs - £130
Sky £21.99
Food - £350.00

Ok, here are the obvious things - why is your council tax only £40, seems low?

£200 a month on life insurance?!!?!?! :eek: This is a fortune, do you really need this? I'm sure it could be cheaper.

£50 on your BT phone is very high too - check to make sure you're getting the best deal for the calls you make. Also the mobiles, reduce them to the lowest possible tariff if they're contracts, or go pay as you go if you can. You're spending £100 a month on phone calls....

I know this sounds harsh, but your dogs are costing you an awful lot of money. Can you really afford to keep them?

Sky has to go too, you just can't afford it right now. Look into freeview as a replacement, or dvd rental trials.

Your food bill is very high for two people (I think it's just two!). I spend £80 a month on my food (just me!) and I don't scrimp that much. You need to start meal planning and buying only what you need for that week's meals. Go over to the Old Style Board for tips on shopping cheaply without compromising quality or health.

climbgirl

Forgot to mention the two cars - they are costing you so much money every month, almost £400 in diesel!

Do you absolutely need both cars? Are there public transport options?

alimac23

Hi,

I have a similar level of debt as yourself with a bit higher income.I tried to move my mortgage recently as the fixed rate had come to an end and have just been turned down by Nationwide. It may also be because I am self employed with under 2 years accounts, but my finacial advisor said they said it was the debt that was the problem.

On the plus side he manged to arrange a new 2 year fixed rate with my current lender which was almost as good. Maybe you could try that if you have problems?

Good luck x

Martinslovechild

£360 in diesel sounds absurd - how many miles are you both travelling? This is way more than I spend per month and I do lots of business miles.

£100 on telephone calls sounds excessive - check out www.1899.com for making daytime calls for 0p/min plus a 5p connection fee. I would seriously ditch the mobiles - you didn't have them 10 years ago and got by alright so get rid of them unless you make the absolute minimum of calls.

Your House Insurance sounds very expensive - do you live in an area with a high crime rate? As a comparison, it's more than double the amount I pay.

The amount you pay on insurance simply made my jaw drop to the floor!! More than £200 a month is simply robbery. Was the guy who sold you this wearing a stetson and arrive on a horse? Until I recently redeemed my mortgage, I paid £26.25 per month for my insurance cover. If you're both employed by a company, check if you already have death-in-service cover - lots of companies offer this as part of their benefits package (usually 2 to 4 times salary) - this will cover the life insurance element. I strongly suggest you shop around on moneysupermarket.com and a few of the other price-comparison websites.

Ditch Sky. Replace it with freeview. You won't miss Sky and you'll get a lot of the same channels for free - you'll save £22 per month into the bargain too.

Take a serious look at your overdraft & credit card debt - paying only minimum payments will push you ever deeper into debt. Use the savings identified here to clear more of your credit card debt, starting initially with your overdraft - you MUST get that back down to your £5K limit, then start clearing the card with the highest APR (MBNA).

Look around your house - is there any stuff you can sell on eBay?

charliemouse

climbgirl wrote: »

Forgot to mention the two cars - they are costing you so much money every month, almost £400 in diesel!

Do you absolutely need both cars? Are there public transport options?

unfortunatly as my husband is self mployed he definitly needs his van otherwise we will have no income at all.

I need a car as we live in a very small village with no public transport apart from a bus a week to the local town - which as i work in london 74 miles away (one way journey) this just is not possible for me todo with out a car.

charliemouse

climbgirl wrote: »

Monthly Outgoings:

Ok, here are the obvious things - why is your council tax only £40, seems low?

£200 a month on life insurance?!!?!?! :eek: This is a fortune, do you really need this? I'm sure it could be cheaper.

£50 on your BT phone is very high too - check to make sure you're getting the best deal for the calls you make. Also the mobiles, reduce them to the lowest possible tariff if they're contracts, or go pay as you go if you can. You're spending £100 a month on phone calls....

I know this sounds harsh, but your dogs are costing you an awful lot of money. Can you really afford to keep them?

Sky has to go too, you just can't afford it right now. Look into freeview as a replacement, or dvd rental trials.

Your food bill is very high for two people (I think it's just two!). I spend £80 a month on my food (just me!) and I don't scrimp that much. You need to start meal planning and buying only what you need for that week's meals. Go over to the Old Style Board for tips on shopping cheaply without compromising quality or health.

think you ahve misread this... the insurance is not just for life insurance - that would be a serious policy if it was. it is for critcal illness, umemployment & life insurance the 3 policies come to this amount.

The council tax is per month - obviously we pay quarterly so it is 3 times this amount. but this is a monthly break down.

"I know this sounds harsh, but your dogs are costing you an awful lot of money. Can you really afford to keep them? " dogs are for life not just xmas is all i will say they are my sanity! and not to mention the extra cash the stud fees bring in.

Sky - unfortunatly we cannot get freeview in our village we were advised that we won't ever be able to get it - so to get sky and cancle the policy after 1 year.