Advice on ways to budget better/cut expenditure

InAPickle76

enthusiasticsaver said:

The One account is an offset mortgage isn’t it through RBS? Have they definitely told you that you need to reapply? What is the repayment term of current mortgage? 

If you find you cannot move it due to affordability I think your best option would be to default on the 2 loans should the monthly  repayment increase significantly. 

Sorry - forgot to add - mortgage has 13 years left but at this rate we will not clear it as we are not paying the full amount each month to reduce the balance as the interest is so high.

InAPickle76

theoretica said:

Have you checked that your son is getting all the benefits he is entitled to?  You mentioned PIP and carers, but not UC or ESA if he is no longer in education?  Will he be living with you long term or moving elsewhere soon, as that would change your budget significantly.

He is still in full time education so we still receive some child tax credit and child benefit for him alongside his PIP.

InAPickle76

flipflopflo said:

I agree please, please, please don’t go into renting. As a person in a rental my rent has gone up from £725 to £1400 in the last few years. Because it’s gone up so much we can’t save money towards a deposit to allow us to get out of rental. We have an income that is just a tadge under yours and we are a family of five. 

You need to keep the roof over your head that you have at all costs. The rental market is a mess right now. There are landlords getting out as fast as they can. The rental stock is nonexistent and the prices are only going up. 

Goodness that is a huge increase! Thank you so much for sharing as it opens my eyes about the rental market. We will definitely stick with the mortgage and try our best to manage the repayments along side the loans. If we can struggle on until the loans are repaid our position will be so much better. 

InAPickle76

On the topic of remortgaging - are there lenders who specialise in people with poor credit history (even though our credit files are excellent the loans are definitely an issue). Would the rates be any more favourable with this type of lender than the current 7.5% we are on now?

Just to say - you have all been so helpful and supportive - I cannot thank you enough

kimwp

InAPickle76 said:

kimwp said:

This will probably sound like a strange question, but what lesson(s) have you learned? Is it simply "don't get into this situation again" or are they clear actions (that you are now following) to help you avoid getting into debt?

I now have a proper budgeting plan in place - making sure I know exactly how much we have each week for food/petrol etc. I am making sure we stick firmly to this budget and only spend what we have from our income. Our kids are both teens now and more aware of finances/cost of living pressures etc so we are honest with them about what we can/can't afford and although my son struggles at times he does get that he can't have everything he wants (although we would love to give that to them both!)

Sounds great! 

This might be a relevant/interesting read:

https://www.moneysavingexpert.com/mortgages/mortgage-prisoners/

I think if I were you, I'd remortgage, then if your finances are still tight, default on the loans (saving the payments while you wait for the defaults) and add them to your dmp. You now have the discipline in place to not get into further debt and it will give you the ability to reduce all your non-secured debt payments in response to whatever your mortgage interest and cost of living does. 

enthusiasticsaver

InAPickle76 said:

On the topic of remortgaging - are there lenders who specialise in people with poor credit history (even though our credit files are excellent the loans are definitely an issue). Would the rates be any more favourable with this type of lender than the current 7.5% we are on now?

Just to say - you have all been so helpful and supportive - I cannot thank you enough

There are lenders who will lend with a poor credit history. A mortgage broker will know which ones to approach. Are you on a fixed rate now and when does it expire or when did RBS say you need to reapply? 

enthusiasticsaver

InAPickle76 said:

enthusiasticsaver said:

The One account is an offset mortgage isn’t it through RBS? Have they definitely told you that you need to reapply? What is the repayment term of current mortgage? 

If you find you cannot move it due to affordability I think your best option would be to default on the 2 loans should the monthly  repayment increase significantly. 

Yes - that is right. We spoke to them regarding a remortgage and they said we would have to go through an affordability check so I think it would be unlikely they would offer anything, especially with the history of defaulting on a previous loan with Natwest?? I would feel so bad defaulting on these 2 loans as I would be gutted being in this position again but I agree that this would be the best option should we need it.

At least you have that option. Don’t be too hard on yourself for getting into a bit of a mess. These offset mortgages were really only any good for those who had high savings and no affordability problems. No doubt your sons autism has put a strain on earning capacity for you and your DH. 

The problems with the rental market can be laid at the door of the current government and previous ones. 

You are now managing a budget better and one way or another you will get through this. 

AnnieB2018

I may have misunderstood but if you are not currently paying the full mortgage amount then you will not be able to remortgage anywhere. Your options are trying to make a bit more money, trying to cut down on spending and maybe ask for a breather on your loan repayments? Not paying the mortgage in full every month has hit your credit history very heard so there it can’t get much worse really!? Sorry if that’s harsh to say but it is a difficult situation.

RAS

I note your husband's income in the SOA. Is that purely Carer's Allowance?

I believe he can also earn up to 139pw net?

Hard as it may seem, your debt situation means it's pretty much essential that he earns as much as possible, whether it's some school day employment or fitting some self-employment round your son's needs. It could be as basic as gardening, or painting and decorating. The other big advantage is that his income wouldn't be taxed.

InAPickle76

enthusiasticsaver said:

There are lenders who will lend with a poor credit history. A mortgage broker will know which ones to approach. Are you on a fixed rate now and when does it expire or when did RBS say you need to reapply? 

No we are now on a variable rate so not tied into any current deal. We contacted the One Account when we had the house revalued a couple of months ago and they said we would have to reapply with their financial advisors and go through a full affordability check if we were to look at any new deal with RBS/Natwest.