£110k of unsecured debt :(

WhenIam64

Options then are

1. Hairshirt
2. Wait for the 75% LTV to kick in. May be sooner than most think for various reasons
3. Switch mortgage providers. Did you check that?

From the numbers you are paying off 2% debt @ 700 pm and have 30% debt sitting there so it is financially worthwhile to find some way of stopping paying the 2% and paying the 30% instead.

You're clearly financially capable. Just a bit overzealous with taking on debt

PWM1

Pixie5740 wrote: »

If you had to make a claim on your income protection insurance how long would you have to wait until it started paying out?

It's a bit complicated as its a mix of 3 elements: Sick pay, company insurance and my own insurance.
Essentially I would be on 50% pay on months 4, 5 and 6. Otherwise full pay up for 5 years, and then £3k per month up to retirement age.

PWM1

WhenIam64 wrote: »

Just a bit overzealous with taking on debt

That's a pretty accurate description. Needs to change though

Thanks very much for your input. I'll take all 3 points on. I haven't looked at switching to another mortgage lender, but I will do. The ERC would be hefty and my credit report isn't filling me with confidence at remortgaging.

I do hope the 75% LTV doesn't take long as it will open up a few options. Then again it might go the other direction. Lets see what happens after March..

In the meantime I'll try to reduce the monthly outgoings as best I can. I have read everyone's very helpful responses and will take them on board.

NeverendingDMP

Welcome to the forum.
How long is your mortgage fixed for. I appreciate its got lots of options for reducing your monthly outgoings but i think its the one thing you should continue with as planned. Its your house and if ive read it right your only secured debt.

You then need to make a plan to pick off the debts and be in a better financial position in preperation for moving forwards without relying on credit or any (hopefully many years away) long term interest rate rises

Car wise im not sure its worth leasing as you are getting nothing back from your spend but a cheaper car that is cheaper to run would be better.

A spending diary and a play around with snowball calculators will help in deciding where to put extra money in debts.
Good luck !

Willing2Learn

If you are gong to be using the snowball method to address your debts, then at the same time I would suggest starting a savings snowball too. It may help having savings targets incorporated into your monthly budget. I agree with others, who have suggested you start a spending diary. Also, an Emergency Fund is a vital component of any monthly budget.

PWM1

NeverendingDMP wrote: »

Welcome to the forum.
How long is your mortgage fixed for.

Thanks. Its fixed until January 2021. ERC is currently £5900.

I start a spending diary and focus on paying off the hsbc credit card initially.

D_M_E

For the wife's calls home, try a short code http://www.dialacode.com

enthusiasticsaver

There are lots of ways to cut back on that soa, most suggested already but with the level of debt you have in spite of you showing a considerable surplus I am guessing that the amounts you have been spending are way above what the soa shows. Tackling this is urgent though as the interest being charged on those debts can quickly cause this to spiral out of control so it is good you have decided to sort this out now.

I would suggest first a spending diary to keep you on track with your budget and get used to a new more tightly disciplined way of spending and I see you have already decided to do that so that is good.

I would most certainly not change your considerably large mortgage to interest only. The lower your LTV rate is the better the deal you will be offered next time your product deal expires so changing to interest only especially if house prices fall could be a disaster. I do not think many lenders will let you do that anyway. I would also hesitate to do payment holidays. How old are you and when is that mortgage due to finish?

You have some shares and bonds which I find surprising with that level of debt but unfortunately unless these were purchased some time ago it probably is not a particularly opportune time to get rid of them at the moment given the stock market performance over the last 6 months to a year. If you can sell without consolidating any losses it might be worth considering though.

The urgent things to sort out are those credit cards with the high balances and high interest rates. I would tackle those first with your bonus.


I think the £1800 cash you have could do as an emergency fund for now. Initially most people in debt go for £1k and then when out of debt 3-6 months expenses.

WhenIam64

especially if house prices fall

An interesting view but completely wrong IMHO. If house prices were to fall, the last thing the banks [if they are still solvent] would want to do is to foreclose. But a debate for another/time or place

PWM1

enthusiasticsaver wrote: »

How old are you and when is that mortgage due to finish?

I'm 35 and the mortgage is due to finish in 33 years. Pension pot is predicted at £670k using the money advice service website.

We are starting a spending diary from today and I am going to go through our recent bank statements to see where any extras might be going.

Selling the shares would be at a loss at the moment and they have been picking up a bit in recent weeks so I might just hold off on selling for a little while.

I tried the mobile phone short code suggested above, but the destination country only has a short code for landlines, which the relatives don't have. Thanks for the idea though