We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Completed SOA, don't know what to do?!

2

Comments

  • katsu
    katsu Posts: 5,027 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Mortgage-free Glee!
    You can still save money on a fixed rate gas and electric deal by using less. 

    You might also be able to switch without a fee but start by trying to use less. The whole family can help you there :)

    Debt at highest: £8k. Debt Free 31/12/2009. Original MFD May 2036, MF Dec 2018.
  • fatbelly
    fatbelly Posts: 23,176 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    edited 2 October at 5:32PM
    So as things stand you are trying to service 71k of debt on £400 per month.

    Read up about debt management. Stepchange and Payplan are the traditional providers of fee-free dmps or you can diy.

    However that is a 355-month plan which is not very sensible. Granted you can tweak your expenditure to pay more but I suspect Payplan and Stepchange would point you to a pair of IVAs over 72 months and 400 x 72 might be enough
  • RAS
    RAS Posts: 36,022 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 1 October at 11:29AM
    @fatbelly am assuming you've read the summary?

    My concern is that the family need to renew their mortgage fix in March 2027. If they can't do that, paying SVR could be ruinous.

    The SOA assumes they are paying the full mortgage of £1450 pm. It also assumes £1000 consultancy income per month which "could stop at any moment."

    But they are currentlypaying interest only, so only £509. And in the absence of consultancy income, in the red every month.

    It's still not clear what is actually being funded by several large budget heads, what the unpaid mortgage capital is funding, or whether the OP's desire to start dealing with the debt is matched by her partner. Suspect the teens will find adjustment a challenge. 

    Can I suggest that clarifying the potential for further damage caused the reduced mortgage payments is a priority?

    Because failure get that back on track could render any other repayment plan irrelevant.

    Having read up on the protocol IVAs, I'd agree that once the mortgage situation is secured, the very low net worth makes these attractive. Assuming the sums add up without the consultancy income.
    If you've have not made a mistake, you've made nothing
  • Stateofart
    Stateofart Posts: 345 Forumite
    Fifth Anniversary 100 Posts
    With all the extras you really are spending as if you have a better income and no debts.  I'd say you could easily shave the food and entertainment bill and free up 3K a year.  Sky can go, mobiles cancelled for sim only.  

    Am I right in thinking you have 71k in unsecured as well as all those credit cards/loans etc? If so, you've been living way, way, WAY beyond your means.
  • ManyWays
    ManyWays Posts: 1,544 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    So you are scraping by at the moment as you are on 6-month IO mortgage break. That was a mistake; it has just kicked the can down the road and nothing has got better. 

    Secured/HP loan repayments.............. 805 (5 year fixed from Aug 24, no early repayment charge)
    That was an even bigger mistake.
    What do the secured loan terms say about what that rate will change to on Aug 29? Because there is no way at that point you will be able to remortgage to cover it as your credit record will be shot with either a DMP or an IVA. 

    I am sorry that pointing out past mistakes isnt helpful in one way, but you have to now make a very hard decision between an IVA or a DMP (or the very unpalatable one of selling the house). And recognising the fact you have made 2 very bad financial decisions in the last 18 months should focus your mind on this next decision, dont just grab what sounds most attractive without thinking through all the pros and cons.

    What else is going to change in the next 6 years? Uni? Kids leaving home? 
  • fatbelly
    fatbelly Posts: 23,176 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    It's not great but there is enough income to pay the mortgage, the secured loan and an IVA. 

    So there's a way out
  • ManyWays
    ManyWays Posts: 1,544 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    fatbelly said:
    It's not great but there is enough income to pay the mortgage, the secured loan and an IVA. 

    So there's a way out
    That depends a bit what the terms of the secured loan are; if that goes up in 2029, then an IVA will have to be drawn up to take account of that
  • It is a fixed rate for 5 years, so yes tyen it would be a variable rate if we can’t get it into the main mortgage which was the original plan. Our circumstances were different when we took this out, unfortunately there was no way of knowing he was going to lose his job and yes, with hindsight we wouldn’t do that but I can’t change it now 

    the £71k is the loan/credit card debt? I realise we have been; living beyond our means, that is what I’m trying to face up to now. My eldest goes to uni next year
  • ManyWays
    ManyWays Posts: 1,544 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    it would be a variable rate
    a secured loan will typically say what the follow on variable rate will be eg x% over base rate or something similar. What does yours say?

    Have you talked to your eldest, saying that you won't be able to offer much financial support? This may feel unkind but he needs to know so he can make a sensible choice of uni, possibly one where he can live at home?
  • ZeroBalance28
    ZeroBalance28 Posts: 5 Newbie
    First Post
    ManyWays said:
    it would be a variable rate
    a secured loan will typically say what the follow on variable rate will be eg x% over base rate or something similar. What does yours say?

    Have you talked to your eldest, saying that you won't be able to offer much financial support? This may feel unkind but he needs to know so he can make a sensible choice of uni, possibly one where he can live at home?
    Looking at the contract it says this

    It has an initial Fixed Rate of 10.376% for a Fixed Period for 60 months followed by a variable Interest Rate

    which will apply for the remainder of the Mortgage Term. The variable Interest Rate is currently 11.029%

    and is comprised of a margin 5.779% and Interbridge Mortgages Limited’s Reference Rate currently 5.25%.

    The Reference Rate varies in accordance with changes made at the discretion of Interbridge Mortgages Limited. 

    Re uni, yes we will be discussing this with him, and will be speaking with him about proper budgeting and avoiding credit! 
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.9K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.1K Spending & Discounts
  • 244.9K Work, Benefits & Business
  • 600.4K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.