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Huge debts and mortgage increase...

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  • MFWannabe
    MFWannabe Posts: 2,458 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Have you adjusted your income for the imminent drop in national insurance ? It may make a welcome bit of a difference.
    This 👆 Made quite a difference to mine this month 
    MFW 2025 #50: £1139.75/£6000

    12/06/25: Mortgage: £65,000.00
    07/03/25: Mortgage: £67,000.00
    18/01/25: Mortgage: £68,500.14
    27/12/24: Mortgage: £69,278.38 

    27/12/24: Debt: £0 🥳😁
    27/12/24: Savings: £12,000

    07/03/25: Savings: £16,500

  • katsu
    katsu Posts: 5,022 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Mortgage-free Glee!
    I think the great news is that if you change your lifestyle you can stay in the house until you want to move up north. 

    The mobile phones can drop massively and hopefully the ones in contract will come down soon too.

    Re presents and Christmas/ birthdays etc etc...  I would suggest you and your partner do token or no presents and have your lives in your house as your present to each other. You probably don't really need a lot more things, especially if your ultimate move will be to a smaller place. See how you can reduce things for the kids too, and discuss with family not giving big gifts. Most people are feeling the financial pressures so will understand. 

    I would cancel satellite TV. Do you really need it? Get a bit extra off the debts. 

    You don't want to be working at 75 I assume so try and change some things now and you'll get more and more momentum to a new life. 
    Debt at highest: £8k. Debt Free 31/12/2009. Original MFD May 2036, MF Dec 2018.
  • Shineyhappy
    Shineyhappy Posts: 1,931 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    There has been so many good suggestions on here and I would echo doing a frugal few months.

    As well as cutting your bills and expenses as much as possible, can you make any extra money? Get a payrise, work overtime, declutter and sell things etc

    Getting some extra in can make a huge difference to morale and keeps focus when on a long journey. If you have a lot of food in the house, can you use some of it up so you can have a cheap food month for February? I found it useful to have some cheap meals (both food and energy wise) in my meal planning.

    Do you have any gift cards that you can use or loyalty points? It really is a good time to do an inventory of the house, what you can sell, do you have jars of change you can pay into the bank or use, any travel money to change back, anything that has been bought recently that can be taken back? 
    Debt Free - done
    Mortgage Free - done
    Building up the pension pot
  • EssexHebridean
    EssexHebridean Posts: 24,424 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Using the things you have in for a cheap food month can be really budget-boosting. I’ve just done exactly that for January, and in spite of needing to buy loo rolls, tea bags and a couple of other “stocking up” things through the month I managed to come in at around £70 under my £225 grocery budget. (Two of us here - no debt other than the mortgage, if there was that would be reduced further) I’m now planning on doing the same again for February. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
    Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
    £100k barrier broken 1/4/25
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Hello @EssexHebridean @enthusiasticsaver @Grumpelstiltskin and everyone else who gave advice previously. would you mind helping again? I'm posting an updated SOA below because we have lost 1000 a month income. We have shaved a fair amount off our spending and extended our mortgage term following your advice (having previously taken out cost of living support) but we just don't have enough money to survive. I think we have to sell, pay off debts and start again. I don't think a DMP is an option as even without the credit card debt we have very little money. Selling is something `I wanted to avoid due to the upheaval and the fact that we intend to move to the North in the next 5 years anyway, but the house and debts are dragging us down to such an extent that maybe this is this is our only way out. Realistically the sale could take 6 months or longer, and I'm not sure how we are going to manage in the meantime. Here is our reviewed SOA, if anyone can offer any advice. Living with this amount of debt and financial uncertainty is very crippling and I worry constantly about the car breaking down, or one of us getting ill. You'll see a very high commuting and petrol costs; this is because we have both had our working in-office days increased which involves a lengthy commute by train and car (there is no choice about this). Our son for this year only is in a football academy which means driving to a lot of matches. I have contacted Stepchange and they have suggested a Token Payment Plan for 12 months where we pay them £9 a month. I wonder if a way forward is to set this up now, which would give us 12 months to sell. our mortgage is fixed until 2027 and on a good rate; we will rate switch once this comes to an end and stay with NatWest. I worry that our car, which is old, is on its way out and we need it for work and if we do a token payment plan we would have no possibility of getting another. Would be very grateful for any replies at all...

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

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

    Monthly Income Details[/b]
    Monthly income after tax................ 3100
    Partners monthly income after tax....... 1950
    Benefits................................ 159
    Other income............................ 80[b]
    Total monthly income.................... 5289[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1500
    Secured/HP loan repayments.............. 465
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 186
    Electricity............................. 289
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 66.7
    Telephone (land line)................... 0
    Mobile phone............................ 128
    TV Licence.............................. 13.25
    Satellite/Cable TV...................... 74
    Internet Services....................... 0
    Groceries etc. ......................... 445.2
    Clothing................................ 20 
    Petrol/diesel........................... 400 [high due to commute/travel to academy]
    Road tax................................ 0
    Car Insurance........................... 98.11
    Car maintenance (including MOT)......... 0 [I know we need this but no money spare]
    Car parking............................. 0
    Other travel............................ 787
    Childcare/nursery....................... 116 [this is for dog walking now we are in the office four days a week]
    Other child related expenses............ 195 [football and once a month tutor]
    Medical (prescriptions, dentist etc).... 36
    Pet insurance/vet bills................. 81
    Buildings insurance..................... 44.15
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 15
    Entertainment........................... 136
    Holiday................................. 0
    Emergency fund.......................... 0[b] [i know we need this but no money spare]
    Total monthly expenses.................. 5095.41[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 750000
    Shares and bonds........................ 0
    Car(s).................................. 1
    Other assets............................ 0[b]
    Total Assets............................ 750001[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 342000...(1500).....1.14
    Secured Debt.................. 62000....(465)......NaN[b]
    Total secured & HP debts...... 404000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    hsbc credit card...............3782......96........NaN
    lloyds credit card.............1000......32........NaN
    tesco credit card..............1090......30........NaN
    mbna...........................11690.....346.5.....NaN
    halifax credit card............5485......98........NaN
    lloyds credit card.............2800......29........NaN
    lloyds loan....................15968.....325.......NaN
    virgin credit card.............109200....325.......NaN[b]
    Total unsecured debts..........151015....1281.5....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 5,289
    Expenses (including HP & secured debts). 5,095.41
    Available for debt repayments........... 193.59
    Monthly UNsecured debt repayments....... 1,281.5[b]
    Amount short for making debt repayments. -1,087.91[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 750,001
    Total HP & Secured debt................. -404,000
    Total Unsecured debt.................... -151,015[b]
    Net Assets.............................. 194,986[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • EssexHebridean
    EssexHebridean Posts: 24,424 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 29 March 2024 at 9:15AM
    Ok - some thoughts. 

    Stop paying the unsecured debt immediately.  Cancel the DD’s. If you let these go out  next month then you have insufficient money to pay everything else - so that is a priority and you need to act now to catch any beginning of the month ones in time. You can contact the card providers to let them know what you have done, and ask for breathing space, but realistically I don’t think you have a choice but to go to token payments or simply let things default in the longer term. To be honest your credit file is going to take a beating anyway so just defaulting might be favourite but I will let those with more knowledge give feedback on that. 

    Have you looked at a new mortgage deal as yet, or is this new deal on the SVR? You’ve still got the rate down as the 1.xx% one which I don’t think is correct. 

    You have the wrong figure down for the a Virgin credit card - I suspect an additional zero? That makes your overall figure look worse than it is! 

    Your energy bills are still looking extremely high. I appreciate your house is quite large, but we’re in a good sized 3-bed and are currently paying a fraction of what you are. Time for a full audit both of your use and your billing - do you have credit still or is the account running towards zero? Are your bills based on actual readings or estimates? Who are you with and might switching for a better deal now be an option? If you have smart meters are they sending readings and are those readings being recorded and billed correctly? And finally on this - have you actually looked at your own annual energy use and established whether this is in the realms of “normal” for your house size and household type?  

    How close are you to contract end on the mobiles and TV package? 

    I think you need a proper look at both those travel costs and also your grocery spending which can still come down a good chunk. The travel costs are killing you though. Adding up your petrol/diesel plus other travel, plus car costs (which even if not budgeted currently, are still there) and IIRC at least some of your secured debt figure was car finance - that monthly outgoing figure is just terrifying for most people - indeed it outstrips my monthly income as a whole by a good long way!  Can you talk to the football academy about any assistance with costs? I assume that your son is there because he shows unusual talent and so they will be likely to be keen to keep him in the programme - and there maybe schemes to assist. Your issue may be that they are aimed st low income families though and so you will not qualify. 

    Also on the car - you need to re-jig your budget to ensure that you are covering maintenance costs. You clearly do huge mileage - you’re going to be needing several services a year, plus you’ll be running through things like tyres faster than average - you have to ensure that you have the money there to keep your vehicle safe, legal and roadworthy. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
    Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
    £100k barrier broken 1/4/25
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • enthusiasticsaver
    enthusiasticsaver Posts: 16,062 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    You will need a DMP  but some of those categories can be pared down further and should be to get you through this. Can you cut back further on groceries and entertainment to put money in car maintenance or emergency savings? When do the mobile phone and cable tv contracts expire? Get out of those asap. 

    What interest rates are you paying on those cards? Defaulting will mean the interest is then frozen so I would default, save that £193 and any other savings from the soa and cancelling all non essentials. Cut entertainment to nothing and save that plus get the groceries down to £300 which is perfectly doable for 4 people. 

    The high mortgage, unsecured debts and high travel costs are a massive burden and paying out for football, tutors and dog walkers cut further into your budget. I think if you are willing to cut expenses as far as possible you may be able to keep the house but having no access to credit really means you will have to change lifestyle and that may also mean your children will have to sacrifice their activities. If it is the choice between that or your house though I know what I would choose. Is this football academy non negotiable as that seems to cost you a lot? 

    I don’t see you have any alternative to defaulting. I would not do the token payment plan through stepchange as I cannot see any advantage to you. Selling won’t help as you will not be able to cover all your bills in the meantime and you will struggle to get another mortgage. As a family you will need to make some tough decisions. 


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  • I am afraid you have reached a point where something drastic has to be done

    Tinkering around with phones, tv etc. just wont cut it.

    You have to make big decisions, this bank holiday weekend is the ideal time. Basically do you want a roof over your head or do you want your son to maybe be a semi pro. footballer because that is where the majority of junior academy players end up.

    Hard I know but you have to be realistic.
    If you go down to the woods today you better not go alone.
  • TheAble
    TheAble Posts: 1,676 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Obviously your commuting and travel costs are very high. If you do decide to move I would consider a location that enables you to considerably reduce this cost i.e. closer to your jobs and other places you need to be.
  • Thanks everyone for your thoughts and extremely useful input. I'm still terrified but you have confirmed what I thought. We can't move nearer to London as my daughter is in year 10 and will be taking GCSEs next year. Just thinking about stepchange - should I go it alone rather than do the token payment plan with them?
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