£117,000 in debt.

Xbigman

Are you talking about the balance on the account or the settlement figure?

If you owe 75k on a loan and you make a payment of say £200 then around £190 is interest and £10 is off the loan. You account balance is now £74,990. As the balance reduces you pay slightly less interest and slightly more off the loan, so god knows how many payments later it is paid off.

If after paying that first payment you ask for a settlement figure they can charge interest and/or fees on top so £89k is quite possible.

BTW. I noticed the other day that oceon finance charge a 2% fee on completion of one of their mortgages, so if you borrow 100k and you pay for 25 years you will still get hit with a final payment of 2 grand. No doubt they will be *good* enough lend you the 2k when the time comes!!!
Regards




X

abc

Xbigman wrote:

BTW. I noticed the other day that oceon finance charge a 2% fee on completion of one of their mortgages, so if you borrow 100k and you pay for 25 years you will still get hit with a final payment of 2 grand. No doubt they will be *good* enough lend you the 2k when the time comes!!!

I might be wrong but I suspect that 2% fee is charged when the legalities of setting up the mortgage are complete i.e. at the start of the term of the mortgage, not at the end of the term.

nelly_2

Says it in the long box under the four big boxes
http://www.oceanfinance.co.uk/mortgages/index.asp

founds this in their Terms & Cond's;

Application Processing Charge
This is a fee which we charge for the time spent in researching the mortgage market, and for the administration involved in ensuring your mortgage application is handled efficiently. The Application Processing Charge also covers many of the various fees and charges incurred in collecting information to support your application, such as references from existing lenders, and the cost of the valuation report. The fee becomes payable only upon completion of your mortgage or remortgage.

As xbigman said... no doubt they will lend you the money for this, "and how about a home improvement loan sir? or a holliday loan as I'm sure you've not had a holiday whilst paying us off @ 8% for the last few years.

Debt_Free_Chick

Xbigman wrote:

Are you talking about the balance on the account or the settlement figure?

If you owe 75k on a loan and you make a payment of say £200 then around £190 is interest and £10 is off the loan. You account balance is now £74,990. As the balance reduces you pay slightly less interest and slightly more off the loan, so god knows how many payments later it is paid off.

If after paying that first payment you ask for a settlement figure they can charge interest and/or fees on top so £89k is quite possible.

Hi there. With most loans, if you borrow e.g. £75k, the interest is added immediately, for the term of the loan. Let's say the interest is £10k ... you've actually borrowed a total of £85k. So after the first payment of £200, you would then owe £84,990.

The exception to this a flexible loan, where interest is calculated and added monthly, on the balance outstanding at the end of the month - rather like a credit card, where you pay interest on what you owe.

HTH

purple_octopus

Hi Again,
After outing myself on MSE a couple of weeks ago, I didn't know what to expect. I have to say I felt touched by the support and advice. Lots of you thought I should go bankrupt, some that I should do payplan. I have pondered a lot and can't make that final jump to bankruptcy (as yet, or if ever). I know there is no miracle answer.I have had serious discussions with Mr. Purple Octopus, and we are both unable to decide what to do. Here are 2 areas we have thought of:

1)There was mention of Mr Purple O. putting the proceeds of his property sale towards paying off my First Plus secured loan. This would potentially give us back equity in the house. I could have his name put on the mortgage and have an have a legal document to state the equity on the house is his (assuming none is left owing to First Plus, which is not known as yet). However, this is a massive decision on my partners part and not something I feel able to ask of him.

2) On the bankruptcy front, I have another question if anyone can help.Here is a reminder of my mortgage situation:-
If my house is worth £195,000, and on the primary mortgage outstanding is £135,000 and the second charge (amount now owed to First Plus) is £89000, then there is defict/negative equity of £29000.
If I were to go bankrupt, would this £29000 be part of the bankruptcy?
One of you thought said that the second charge holder (First Plus) would go for repossesion in Bankruptcy, but as my house would not be for sale until after I go bankrupt (possibly many months after), I wonder what would happen when First Plus find they cannot recover the full amount of their loan?

Any thoughts and ideas gratefully received
Thanks from Purple O x

crystal_clear

Hi Purple
I do believe i have read the thread from start to end so far and note you mention the 75k secured loan and it leaving you 29 k negative equity on that note i have to ask (as not to pre judge you in any way)
You say the 75k was a recent loan but did not mention how recent or how in a short time you have spent this (again i am not trying to pre judge)
The reason i ask is i note you mention looking at going Bankrupt again as an option and i to am in a jam for want of better words and have been looking around for advice so i am no expert but I am sure i have read on one of the sites insolvencydirect i think it was but looked at loads so i may be wrong but if this 75 k was taken out after April 2004 when the new laws on bankruptcy came in i think i read that if you took on credit after that date and were found to be negligent i.e cannot account for every penny of it so that none has been abused as they put it on just lavish spending or holidays an order can be applied to your bankruptcy file and you may not be discharged for a number of years to follow but as i say i am no expert and would hope that someone who knows more on this can clarify it for you. If my comments are to be confirmed then i personally would suggest that you really do look in to it very carefully before taking this route or alternatley offer reduced payments on unsecured debts via cccs until you are in a position to pay more
as the 10 year plan may be a quicker option than the bankruptcy one
I do hope a more qualified MSE will be along soon to help you and wish you all the luck in the world :think:

deemy2004

yeh, seems strange that you borrowed a whopping £75k just a few months ago, presumably knowing at the time that you would not be able to service the debt i.e. a monthly net deficit.

So what happened to the £75k ? Since its nothing to do with your mortgage.

Does not make any sense...

Ember999

I was wondering when I read this thread what the £75,000 was spent on, it's a vast amount of money! I have seen a few ads on TV for First Plus and they give me the chills as securing any debt on your house would give me the chills .

Such a risk and they are taking not much of a risk, you don't pay, they get your house sold to pay the debt off! What situation was so bad that you had to borrow £75,000 to end up just further in debt? If it was to clear debts (though in no way do I feel consolidation loans to be a good idea) fair enough, but as it wasn't used to pay off existing debts, where did the money go?

I would avoid Bankruptcy as they will take the fact that this huge secured loan was taken out only a short while ago. Looks bad, looks very bad.....

Is the money sat in a savings account somewhere? If it is, the OR will find it.

Good Luck anyway, it must be very stressful for you, my sympathies.

purple_octopus

Hi Crystal Clear, Deemy2004 and Ember999,
I don’t mind saying that the £75k loan was used to consolidate a lot of credit card debt and an unsecured loan for £20k. It was built up over the years through overspending on things like household furniture, books, cds, dvds, clothes and jewellery. I lived alone at the time and did not dare tell anyone about my ever increasing problem. I had never heard of MSE and didn’t know where to go for help.
I saw the First Plus ad and foolishly thought it would help to reduce my monthly outgoings, but I did not do my calculations thoroughly, and if I had, I would have realised I could not service the debt.
I took out the £75k loan in March 2004, it would be good if someone could help me with the point that Crystal made about the Bankruptcy Laws in April 2004. At this point all of my living expenses had to be on credit card and I had an overdraft of £5000, so my salary never touched the sides. I used credit card cheques from one company to pay the minimum payment of another company and my debt was multiplying out of control. To say I was an idiot doesn’t even begin to cover it.
Of course, little did I know that the moment I took out this loan, the repayment figure on it shot up to £89,000, and 15 months on I still owe them nearly £89,000 as I just recently requested a completion statement. I have paid them £13,950 since last March and of that less than £700 is capital. I just can’t believe my stupidity, and neither can Mr Purple O, who came into my life at the same time 15 months ago.

Purple O

Ember999

purple_octopus wrote:

Hi Crystal Clear, Deemy2004 and Ember999,
I don’t mind saying that the £75k loan was used to consolidate a lot of credit card debt and an unsecured loan for £20k. It was built up over the years through overspending on things like household furniture, books, cds, dvds, clothes and jewellery. I lived alone at the time and did not dare tell anyone about my ever increasing problem. I had never heard of MSE and didn’t know where to go for help.
I saw the First Plus ad and foolishly thought it would help to reduce my monthly outgoings, but I did not do my calculations thoroughly, and if I had, I would have realised I could not service the debt.
I took out the £75k loan in March 2004, it would be good if someone could help me with the point that Crystal made about the Bankruptcy Laws in April 2004. At this point all of my living expenses had to be on credit card and I had an overdraft of £5000, so my salary never touched the sides. I used credit card cheques from one company to pay the minimum payment of another company and my debt was multiplying out of control. To say I was an idiot doesn’t even begin to cover it.
Of course, little did I know that the moment I took out this loan, the repayment figure on it shot up to £89,000, and 15 months on I still owe them nearly £89,000 as I just recently requested a completion statement. I have paid them £13,950 since last March and of that less than £700 is capital. I just can’t believe my stupidity, and neither can Mr Purple O, who came into my life at the same time 15 months ago.

Purple O

Oh Honey, that's such a sad post...my heart goes out to you. I can see exactly what has happened here and it's obvious it was a spiral that you just couldn't stop. Wish I could wave a magic wand, make it all go away I have no idea what to suggest, but I am so pleased you have found someone to stand by you. I hope someone on here finds a way out of this mess for you


Ember x :grouphug: