Debt consolidation/remortgage/SOA

MatyMoo · 11 January 2022 at 10:43PM

Cazmeena said:

Finally completed it sorry if it’s a bit all over the show I’m doing on
my phone.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 1780
Partners monthly income after tax....... 2300
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 4080[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 900
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 189
Electricity............................. 65
Gas..................................... 65
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 14
Satellite/Cable TV...................... 95
Internet Services....................... 0
Groceries etc. ......................... 400 With meal planning you can probably reduce this a bit
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 29.75
Car Insurance........................... 53
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 36.72
Pet insurance/vet bills................. 26.25
Buildings insurance..................... 10
Contents insurance...................... 23.11
Life assurance ......................... 89.06
Other insurance......................... 0
Presents (birthday, christmas etc)...... 48
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Cleaner ................................ 100
Lottery ................................ 26
Charities .............................. 10
National trust ......................... 10.5[b]
Total monthly expenses.................. 2535.39[/b]
[b]

Assets[/b]
Cash.................................... 4000
House value (Gross)..................... 395000
Shares and bonds........................ 0
Car(s).................................. 2 Is this the value of the cars or the number of cars?
Other assets............................ 0[b]
Total Assets............................ 399002[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 162000...(900)......1.39[b]
Total secured & HP debts...... 162000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Halifax........................2242......53........19.2
Barclaycard ...................2284......73........17.3
Sainsbury’s ...................3227......89........21.1
Loan...........................17120.....381.......5.4
Loan ..........................7785......192.......5.7
Loan ..........................11100.....215.......5.3
Tesco .........................700.......25........17.1[b]
Total unsecured debts..........44458.....1028......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,080
Expenses (including HP & secured debts). 2,535.39
Available for debt repayments........... 1,544.61
Monthly UNsecured debt repayments....... 1,028[b]
Amount left after debt repayments....... 516.61[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 399,002
Total HP & Secured debt................. -162,000
Total Unsecured debt.................... -44,458[b]
Net Assets.............................. 192,544[/b]

Feeling a little bit ugh now it’s all written down… bit info 2 loans and three main credit cards in husband name he has fine credit score just checked today but nothing being offered on 0% credit cards etc I have been offered money transfers so I could transfer into my name ? As I only have the Tesco CC and £17k loan is that advisable ?
Look forward to hearing from you … please go gentle I know our mistakes.

A couple of comments above

Cazmeena · 12 January 2022 at 11:12AM

We have 2 cars mine is paid off my hubby’s is still part of the £11k loan.

Def looking into money spent on food as well:)

MatyMoo · 12 January 2022 at 11:34AM

Cazmeena said:

We have 2 cars mine is paid off my hubby’s is still part of the £11k loan.
Def looking into money spent on food as well:)

So you need to add a value for the cars in your SOA

Cazmeena · 12 January 2022 at 1:19PM

Oops I missed that

Naomim · 12 January 2022 at 1:24PM

The things that jump out at me on your SOA are:

Groceries £400 - How old is your child? £400 looks a lot on groceries for 3 but if it includes nappies/wipes it may be more realistic or conversely if you have an older teen they eat for England. My 16yo is adult size and has hollow legs. I budget £400 for a family of 4. Meal planning is a great thing to do and stops you from eating the same things week in week out too. I also shop online for home delivery, less chance of me grabbing whatever is on offer and stick to a list.

Cleaner £100. This is a luxury unless you and your partner both have a disability that physically stops you from being able to do any housework.

Lottery £26 - I know you have to be in it to win it but at the moment this could go towards debt

Charity £10 - A lovely gesture but at the moment unaffordable. I stopped regular donations to charity but do give plenty of bits and pieces to charity shops, registered as a tax payer so they can claim tax back. I usually get a letter once a year telling me how much they have made from my donations. Often about £100 so works out almost the same as a regular donation.

I also can't see child benefit on there? Are you claiming it?

Edited to add: My gas & elec is the same as yours. 3 bed house with 4 people in it. MrM & I both WFH. Heavy internet, streaming use etc with two teens. I'm always wondering around turning lights off and moaning about Blackpool illuminations!

Cazmeena · 12 January 2022 at 2:50PM

thank you

def going to make a plan …how we can scale down etc yes the cleaner eek it is a gorgeous luxury I must admit and I do have to think end goal.

RelievedSheff · 12 January 2022 at 3:07PM

Cazmeena said:

Finally completed it sorry if it’s a bit all over the show I’m doing on
my phone.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 1780
Partners monthly income after tax....... 2300
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 4080[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 900
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 189
Electricity............................. 65
Gas..................................... 65
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 14
Satellite/Cable TV...................... 95
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 29.75
Car Insurance........................... 53
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 36.72
Pet insurance/vet bills................. 26.25
Buildings insurance..................... 10
Contents insurance...................... 23.11
Life assurance ......................... 89.06
Other insurance......................... 0
Presents (birthday, christmas etc)...... 48
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Cleaner ................................ 100
Lottery ................................ 26
Charities .............................. 10
National trust ......................... 10.5[b]
Total monthly expenses.................. 2535.39[/b]
[b]

Assets[/b]
Cash.................................... 4000
House value (Gross)..................... 395000
Shares and bonds........................ 0
Car(s).................................. 2
Other assets............................ 0[b]
Total Assets............................ 399002[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 162000...(900)......1.39[b]
Total secured & HP debts...... 162000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Halifax........................2242......53........19.2
Barclaycard ...................2284......73........17.3
Sainsbury’s ...................3227......89........21.1
Loan...........................17120.....381.......5.4
Loan ..........................7785......192.......5.7
Loan ..........................11100.....215.......5.3
Tesco .........................700.......25........17.1[b]
Total unsecured debts..........44458.....1028......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,080
Expenses (including HP & secured debts). 2,535.39
Available for debt repayments........... 1,544.61
Monthly UNsecured debt repayments....... 1,028[b]
Amount left after debt repayments....... 516.61[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 399,002
Total HP & Secured debt................. -162,000
Total Unsecured debt.................... -44,458[b]
Net Assets.............................. 192,544[/b]

Feeling a little bit ugh now it’s all written down… bit info 2 loans and three main credit cards in husband name he has fine credit score just checked today but nothing being offered on 0% credit cards etc I have been offered money transfers so I could transfer into my name ? As I only have the Tesco CC and £17k loan is that advisable ?
Look forward to hearing from you … please go gentle I know our mistakes.

A few things on there that jump out.

£100 for a cleaner. You can do this yourselves for much less per month. That £100 would be better spent clearing some of the higher interest debts.

Water rates. Get a water meter fitted it will be much cheaper. We currently pay £18 per month for ours.

Satellite/Cable TV. £95 a month! Really? Do you really need to spend that much on watching TV. Add the TV licence and it is nearly £100 per month. Can you not knock this on the head and use say Netflix instead for a lot less money and put the saving towards the higher interest debts.

Shop around for your life insurance. You should be able to get this cheaper.

£26 for the lottery. Look back and see how many times you have won and then think is it really worth it? That £26 per month can go towards one of your debts and save you a lot of interest.

Your SO shows that you have £500 outstanding per month. Where does this go?

There are some pretty hefty savings to be made there which will go a long way towards paying off some of your debts. Writing them all down is just the start. Now you need to make a plan for paying them off. Debt consolidation very rarely works, I would scrap that idea. You have plenty of spare in your budget for making the repayments and bringing down the balances in a decent amount of time.

Start by clearing some of the smaller balances to get them out of the way and then redistribute the repayments amongst the other debts. Once you get a couple of debts paid off you will catch the bug and want to make bigger inroads into paying off the rest

Cazmeena · 12 January 2022 at 4:44PM

thank you for this advice will take this on board

andys15 · 13 January 2022 at 10:50AM

I think a little differently than advice already given. This is a money saving expert website and it’s true that the best advice is to not consolidate.
However if I was in your situation ( I have been in your situation), I would consolidate. But I would then take away the temptation/ability of building up more debt after consolidating by reducing the term of my mortgage instead of just overpaying( this reducing the term would go against Martins advice).

The caveat to my advice though is that your jobs need to be as secure as can be and income safe.

Like I said this advice will not be popular and it won’t be money saving ( well it will be if you don’t get them cards onto 0%), but some people( like I did) like to have fresh starts instead of seeing lots of loans ,credit cards and direct debits.

kimwp · 13 January 2022 at 11:30AM

andys15 said:

I think a little differently than advice already given. This is a money saving expert website and it’s true that the best advice is to not consolidate.
However if I was in your situation ( I have been in your situation), I would consolidate. But I would then take away the temptation/ability of building up more debt after consolidating by reducing the term of my mortgage instead of just overpaying( this reducing the term would go against Martins advice).
The caveat to my advice though is that your jobs need to be as secure as can be and income safe.
Like I said this advice will not be popular and it won’t be money saving ( well it will be if you don’t get them cards onto 0%), but some people( like I did) like to have fresh starts instead of seeing lots of loans ,credit cards and direct debits.

Each has to follow their own path

The reasons for not consolidating being the best money saving advice as Andy says are that consolidation:

- Increases the risk of losing your home if you put it on your mortgage (hence why Andy says only do if your job is secure - it would need to be guaranteed that you won't lose it)

- It could cost more in the long run because although the interest is lower, the term is longer.

- It's not a fresh start as you still have the debt

- Experience on here is that most people who consolidate end up in more debt because they don't address the overspending

Debt consolidation/remortgage/SOA

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