Bit of advice needed please

wizard3891

Hi, currently me and gf have a shared ownership 1 bed flat (50% share) we earn fairly good money £3000 per month between us., the trouble is we have alot of debt and really want to take a step in the direction of getting out of it.

We really love our flat but its feeling cramped in 1 bedroom and we think its time to be realistic and if we have to move then we are willing to.

We owe £74500 on our mortgage and going by other flats on our development we believe our share is worth in the region of £95000 now although we will need to get an acurate valuation by the HO.

Now the figures

Incoming: £3000 per month

Outgoing:

£293 - rent/service charge
£393 - Mortgage
£70 - Both our mobiles
£36 - virgin media bb and home phone
£200 - shopping
£250 - petrol 2 cars, i think its less actually
£17 - contents
£12 - tv licence
£122 - COUNCIL TAX
£31 - dfs sofa
£60 - gas/elec
£100 - car insurance both cars


debts

£284 loan
£208 loan
£164 car (planning to sell in new year to clear finance)
£175 loan

cards

£6000 0%

So as you can see its a problem and we know its our own fault but want to take steps to help ourselves financially. we really need the cars as we work a distance and trains will be just as costly

Options we have thought of

1.Sell this flat and use equity to pay cards completly, one of the loans completly and sell my car to clear it and buy a run around while we sort ourselves. pay a chunk of other loan too.

Then rent while we get back on our feet finacialy.

HELP PLEASE

goldbyron

Can't you release equity in the flat or remortgage and pay off your loans that way?

Doozergirl

How much would rent be on a one/two bed flat?

How much do you owe on those loans? Interest rates?

wizard3891

rent on a 2 bed is about 800 - 900 in our area. Loan that would be cleared is £6720 (just phoned them)

Doozergirl

Well, selling up would pay off your debts, but what you must, must realise is that using the equity you have to pay of the debt doesn't address the fact that you appear to have a major overspend problem. At the moment, even with your loans you should have £600 to spare every month Once you've paid off the loans and credit cards, it's highly likely that you will just get yourself back into debt and you won't have the backup of that equity anymore. You must ensure that you don't just work yourself back to where you were.

I think the best board for you to post on would be the debt free wannabe board. There are plenty of people in a similar situation who willbe able to help. It might just be that you can afford to keep what you have, although wanting to live somewhere bigger anyway is certainly a consideration. The cost of living goes up but your debt is paid off.

wizard3891

just did a quick search online and a remortgage on current place would be roughly £600 a month and give us the money to wipe out the following and NEVER EVER GET THEM AGAIN
Outgoing:

£293 - rent/service charge
£393 - Mortgage CHANGES TO £600
£70 - Both our mobiles
£36 - virgin media bb and home phone
£200 - shopping
£250 - petrol 2 cars, i think its less actually
£17 - contents
£12 - tv licence
£122 - COUNCIL TAX
£31 - dfs sofa
£60 - gas/elec
£100 - car insurance both cars


debts

£284 loan
£208 loan GONE
£164 car (planning to sell in new year to clear finance) GONE
£175 loan GONE

cards

£6000 GONE

does this look like a good option or not??

wizard3891

does this seem a viable option?? at least we would get to stay where we are happy.

Mozette

Copy your first post to the DFW board as well, you should get some help there.

Generali

Yup. DFW is the place to go.

The Living Below Your Means board on fool.co.uk is good to:

Link

(No connection)

wizard3891

been looking into a remortgage on here and from what ive seen it seems its unlikely we could remortgage our share for the money? Is this right, are we allowed to remortgage our 50% share on its new value??

Generali

wizard3891 wrote: »

been looking into a remortgage on here and from what ive seen it seems its unlikely we could remortgage our share for the money? Is this right, are we allowed to remortgage our 50% share on its new value??

I don't see why not. You'll count as 'sub prime' though and be charged accordingly.

The risk you're taking by refinancing is that you then start the whole rigmarole all over again. Without wishing to be rude (and the DWD board is the place to go if you want uncritical help) you appear to have been dumb enough to take out 4 loans and blow six grand on credit cards while earning about £45k pa. If the loans were to start a business or pay for a life saving operation then I apologise.

Unless you take major steps to change your lifestyle you'll be back with another tale of woe in a few months or years.