Debt consolidation/remortgage/SOA

EssexHebridean

Cazmeena said:

Glad I am not the only person that thought this might be idea … 

You  may well be the only two who would consider it to be in any way good advice, though. An awful lot of folk on here have taken the time to explain carefully and patiently why consolidation isn't a good - or indeed safe - path to go down. I'd urge you to go back over all those reasons and then ask yourself how much you're comfortable risking your family's financial future. 

Yep - paying off debt "properly" is slow, and it certainly will not give you instant results - but what's more important - security going forwards or the hit of instant gratification now? 

kimwp

 I’m going to have to chip away slowly.  I struggle with this as I need to see instant results which is why I am in this pickle in the first place by keep moving debt around and still spending too much.  Onwards and upwards and now I have a goal and lots of people on here to help and offer support which has been awesome after only 4 days of joining so wish I had done it sooner!  

When you start your diary (or on a separate thread), it may be worth asking others when kept them motivated. Would a chart with strips that you can colour in or similar help? 
It may also be worth writing a manifesto and plans for the future to remind yourself why you are doing this.

andys15

In real terms though that doesn't really take away any temptation at all as the debtor would still potentially be able to apply for more cards/loans  - indeed, if they are making a larger mortgage payment, and had not addressed the behaviours that caused the debt in the first place. It would be positively dangerous advice for someone to increase their mortgage payments to such an extent that they would subsequently fail affordability checks for any further credit! I'd offer that in that situation, increasing the size of the mortgage payments actually makes it more likely that the family home becomes at risk, as the tipping point of affordability -v- unaffordability will arrive sooner. 

A fresh start is indeed lovely, but actually getting to the bottom of, and fixing the issues which may have caused debt in the first place, and getting yourself on the sort of solid financial footing that means you won't - almost regardless of circumstances - end up back in the hole again - is even better.

I agree with what you are saying. I just personally think if you are just overpaying a mortgage then the temptation is to think, oh it’s Xmas let’s not overpay it this month. Oh there is a great holiday deal on, let’s not overpay this month either. Where as reduction in terms is final. The DD is coming out regardless. If you mess up with more debt you are increasing the risk of default. That’s what I did to get debt and mortgage free. But it’s depends on how disciplined you are. 

Anyhow the poster cannot do the mortgage. So my advice would be to get 0% credit cards and divide the debt by how many months interest free you get, then set up a standing order to ensure you pay it off within those months and DO NOT spend on those credit cards ever. 

Cazmeena

andys15 said:

In real terms though that doesn't really take away any temptation at all as the debtor would still potentially be able to apply for more cards/loans  - indeed, if they are making a larger mortgage payment, and had not addressed the behaviours that caused the debt in the first place. It would be positively dangerous advice for someone to increase their mortgage payments to such an extent that they would subsequently fail affordability checks for any further credit! I'd offer that in that situation, increasing the size of the mortgage payments actually makes it more likely that the family home becomes at risk, as the tipping point of affordability -v- unaffordability will arrive sooner. 

A fresh start is indeed lovely, but actually getting to the bottom of, and fixing the issues which may have caused debt in the first place, and getting yourself on the sort of solid financial footing that means you won't - almost regardless of circumstances - end up back in the hole again - is even better.

I agree with what you are saying. I just personally think if you are just overpaying a mortgage then the temptation is to think, oh it’s Xmas let’s not overpay it this month. Oh there is a great holiday deal on, let’s not overpay this month either. Where as reduction in terms is final. The DD is coming out regardless. If you mess up with more debt you are increasing the risk of default. That’s what I did to get debt and mortgage free. But it’s depends on how disciplined you are. 

Anyhow the poster cannot do the mortgage. So my advice would be to get 0% credit cards and divide the debt by how many months interest free you get, then set up a standing order to ensure you pay it off within those months and DO NOT spend on those credit cards ever. 

Ahh I see what you mean I missed that… it would be tempting to not pay one month etc so if we ever did go down that route I would ensure we were disciplined enough but better like you said reduce term of mortgage clearly it  can be done you are living proof.  Gosh when I think about how badly we have spent over the years … we would probably been on our merry way to being mortgage free by now… better late than ever I suppose.  I think the diary thing will help … I’m very proud just been to B & Q picked up 2 cushions ooh sooo soft  £10 each AND put them back whoop small victory. 😀 

enthusiasticsaver

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.  

You have already had some good advice but my input as far as your expenses  go is that groceries, cable tv, life assurance, mobile phones are high and I would ditch the cleaner, lottery, charity for now.  You also have nothing in entertainment but I would hazard you do  spend on meals  or coffees out or takeaways or childrens entertainment so you need to see how much you actually do spend on that.  It also says you should have £516 spare and you clearly do not.  I would do a spending diary to see where your money is actually going. 

You have a  decent amount of cash and while I agree with having emergency savings  you are paying 21% on that Sainsburys card so you are paying £56 per month interest on that. I would repay Sainsburys in full out of your savings  then build the emergency fund back up to £1k.  The Tesco card is costing you less than the Halifax but the balance is lower so that is an easy win to repay out of your spare cash (if it really is spare).  Then tackle Halifax and Barclaycard last.  You will then be left with just the loans. You can sort this without making the astronomical mistake of consolidating but it requires discipline and a change of spending behaviour.  I agree that a DFW diary would be a good move to keep you motivated.