In debt - how best to pay off credit cards and what to do re mortgage port

startingover2025

Thankyou everyone. @TheAble I will post an SOA in the morning, this isn't something I had considered. @ManyWays the fixed term ends in Feb 27. One of the reasons for moving now and porting the mortgage is because we will struggle to afford our mortgage repayments when we move off the fixed rate, as repayments will increase by at least 500-600 a month. If we port the mortgage to a cheaper property, and do this before Feb 27; pay off our credit cards and the second charge with some of the profit we make from our house, then we will have more capacity to afford this. With our credit history I also have concerns that we will get another mortgage from a high street lender, so we need to stay with NatWest and rate switch at the end of our fixed term - another reason for the port. Thankyou - I hope this gives a bit of clarity but will post an SOA.

Brie

400ixl said:

A gift cannot be a loan, he will have to be prepared to formally declare he has no interest in the money once it is with you and you will not be paying anything back.

So unless he is willing to not get any payment from you for months until the whole mortgage situation is sorted then you can't informally call it a gift as there will be repayments on record.

except that if a gift was made well in advance of a mortgage application it may be dismissed by the bank.  Might not, but just a thought.

badmemory

For once I am not entirely sure I agree with everyone.  If those debts are incurring large amounts of interest are you even paying anything off them.  Can we assume your stepfather is not asking for over 20% interest on his loan.

katsu

The SOA is crucial as maybe there are other options. 

What about another Natwest product at the end of the fix? You should not need a credit check. 

If your mortgage stays the same and you are reducing your extra debt only with this move, I would explore other debt management options now or in 2027.

startingover2025

Morning everyone. @katsu yes, our plan is to rate switch at the end of our fixed rate. I'm interested in exploring other debt management options but we are hoping to reduce our mortgage with this move, by 50-100,000. The existing debt would be paid off with some of the equity. @badmemory this is an interest free loan, that must be repaid when we sell. SOA to follow....

startingover2025

SOA - I have left blank the areas some areas - haircuts, birthdays and clothes; we do spend on these of course but the amounts are changeable so I can post an updated SOA once I've gone through the past few months of statements. We don't have any savings, and any unexpected expenses we have to ask our in-laws to cover which is far from ideal. We are desperate to get ourselves out of this situation, hence the move. 

[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................ 3200

Partners monthly income after tax....... 2300

Benefits................................ 570

Other income............................ 80[b]

Total monthly income.................... 6150[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1500

Secured/HP loan repayments.............. 466

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 245

Electricity............................. 108

Gas..................................... 0

Oil..................................... 0

Water rates............................. 78

Telephone (land line)................... 0

Mobile phone............................ 118

TV Licence.............................. 15

Satellite/Cable TV...................... 65

Internet Services....................... 0

Groceries etc. ......................... 650

Clothing................................ 0

Petrol/diesel........................... 300

Road tax................................ 0

Car Insurance........................... 98

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 524

Childcare/nursery....................... 0

Other child related expenses............ 254.5

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 97

Buildings insurance..................... 56.47

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0

(Unnamed monthly expense)............... 0

Dog walker.............................. 116[b]

Total monthly expenses.................. 4690.97[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 770000

Shares and bonds........................ 0

Car(s).................................. 2000

Other assets............................ 0[b]

Total Assets............................ 772000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 0........(1500).....0

Secured Debt.................. 0........(466)......0[b]

Total secured & HP debts...... 0.........-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

lloyds loan....................14929.....325.......0

tesco..........................1100......34.69.....0

virgin ........................9700......266.5.....0

halifax........................5000......110.......0

lloyds.........................969.......42........0

MBNA...........................11000.....65........0

hsbc...........................5000......143.......0

lloyds.........................2000......81.33.....0[b]

Total unsecured debts..........49698.....1067.52...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 6,150

Expenses (including HP & secured debts). 4,690.97

Available for debt repayments........... 1,459.03

Monthly UNsecured debt repayments....... 1,067.52[b]

Amount left after debt repayments....... 391.51[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 772,000

Total HP & Secured debt................. -0

Total Unsecured debt.................... -49,698[b]

Net Assets.............................. 722,302[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

startingover2025

Apologies I didn't enter our total remaining mortgage - it's with natwest on 1.19% interest rate, outstanding balance is £332,322. Fixed rate ends in Feb 27 when we will do a rate switch within natwest as it's unlikely we'll be able to get another mortgage with a high street lender. We also have a second charge - outstanding balance is £59,783. I can't delete the above but could repost an updated SOA. I am 54, my husband is 49, and our mortgage runs over the maximum so until I'm 75. We put this in place to bring down payments.

MattMattMattUK

startingover2025 said:

SOA - I have left blank the areas some areas - haircuts, birthdays and clothes; we do spend on these of course but the amounts are changeable so I can post an updated SOA once I've gone through the past few months of statements.  *(You do probably need to work through a full year's statements to get an accurate figure) 

Total monthly income.................... 6150[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1500

Secured/HP loan repayments.............. 466

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 245

Electricity............................. 108

Gas..................................... 0

Oil..................................... 0

Water rates............................. 78 Go on a meter, it should cut that to £40 or less, you can use this link to estimate based on your usage. https://www.ccw.org.uk/save-money-and-water/water-meter-calculator/ £40 saving

Telephone (land line)................... 0

Mobile phone............................ 118 This is very high, move all to SIM only contracts from somewhere like GiffGaff for £5-10 a month depending on usage. £100 saving

TV Licence.............................. 15 Get rid of this £15

Satellite/Cable TV...................... 65 Get rid of this £65

Internet Services....................... 0 Do you have broadband? 

Groceries etc. ......................... 650 You may or may not be able to get this down by much, but with batch cooking, meal planning, removing all brands etc. you can probably save at least £150

Clothing................................ 0

Petrol/diesel........................... 300 This is a very round figure, is it accurate? It is also high, more than 2k miles a month?

Road tax................................ 0 

Car Insurance........................... 98 £1,200 a year to insure a £2,000 car seem very high, is this correct?

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 524 This seems high on top of 300 of petrol?

Childcare/nursery....................... 0

Other child related expenses............ 254.5

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 97 This seems high, can you get a better deal on your pet insurance?

Buildings insurance..................... 56.47

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0

(Unnamed monthly expense)............... 0

Dog walker.............................. 116[b]

Total monthly expenses.................. 4690.97[/b]

[b]

On top of direct savings, do you use things like TopCashback on your insurance renewals, where you can get 5-40% back? It might also be worth looking at a Chase bank account with 1% cashback on all spend, I know that those kinds of things will not solve the issue in themselves, but they can add up to several hundred pounds over a year and every little helps when trying to beat debts down. 

This is also the hard part, but have you established how you ended up in debt and how you can make sure that the pattern does not repeat. This is not something you have to explain on here, but between you and your husband you have to work out where the money went as you will have been used to spending significantly more than you have earned whilst you have been running up the debt. To clear it you have to both start repaying and drop that additional spend, so it really is worth working through. Going through a full year's worth of bank and credit card statements, together with a good spreadsheet is the best way to do this, it will likely take a couple of evenings, it can and will be very enlightening (having done it myself when I had debt issues in the past and also helped friends do the same). It is worth splitting each spend into essential and non-essential, so for example school uniform for children is a child clothing essential, Nike trainers are a non-essential, a family day out is essential (life has to have some pleasure), but say a trip to Legoland or Chessington that ends up costing £200-300 is not, that way you can establish a baseline and then in your budget, especially as you have children, I think it is important to allow a bit extra for fun.

Grumpelstiltskin

AA quick one, no one ever has a hair cut?  You never buy anyone a present? Never go out anywhere?

You need to check what you have been spending over the last few months and rejig your SOA.

MattMattMattUK

Grumpelstiltskin said:

AA quick one, no one ever has a hair cut?  You never buy anyone a present? Never go out anywhere?

You need to check what you have been spending over the last few months and rejig your SOA.

startingover2025 said:

SOA - I have left blank the areas some areas - haircuts, birthdays and clothes; we do spend on these of course but the amounts are changeable so I can post an updated SOA once I've gone through the past few months of statements.