Will we be ok?

jackkelly

Hi all,
Wondered if you could my mind at rest, I'm trying to think ahead and not stress, have discovered hindsight is a great thing.
My husband and I bought our first place 12mths ago almost, we are on a 2yr fixed rate with abbey ( wish had taken the 5yr on offer but heho)
Our place was 186000 and we put down a £40000 deposit (part of my hubbies redundancy settlement) when we come to renew will we be alright? million dollar question I know just want to know that we will get a mortgage somewhere.
I earn approx £18000 he earns £25000 plus his mililtary pension of £6000 a year. We have a car loan of £5000 which will finsh in 2yrs and approx £6000 on cc. On paper we could absorb another £300 a month on our mortgage without too much trouble because Child benefit etc isn't evened factored into this income at presnt we have a nice lifestyle but not to excess.
I am trying too reduce the cc as much as possible be over paying each month ,and generally budgetting on shopping etc.
Just to add house prices are still rising albeit slower than previously in this corner of the southeast,
Any advice would be great : )

Gorgeous_George

You have an LTV of 78.5% based on a house value of £186K and a mortgage of £146K.

Fast forward 12 months and your percentage will be based on the new value of your property. I'd be surprised if their was any equity left after 12 months of falling prices but I could be wrong.

You need to clear the credit cards. Take a personal loan if necessary then destroy them. You do not seem to have the self-discipline to cope with credit cards.

You may not be able to move your mortgage in 12 months so keep an eye on the SVR and work out what your repayments will be with your current lender. This will help to avoid the shock of a sharp increase.

GG

jackkelly

Hi,
Thanks fortunately the cc's are mine not his, a hangover from me training as a nurse. He is very sensible with money thank god! I don't spend on them now and I am reducing as much as I can each month.
I think our LTV is slightly lower 75% can't remember exact figures of deposit and mortgage sums off the top of my head (irrelvent really anyhow). We reducing out goings, contract mobiles are going as soon as time limit is up, and he has overtime every weekend if he wants it so is using that to finish off the bits that need doing in the house and give use a buffer.
Do you wiser people on here think that a personal loan debt would be better than an cc debt when we come to remortgage.
Cheers

InMyDreams

jackkelly wrote: »

On paper we could absorb another £300 a month on our mortgage without too much trouble

You say you *could* without too much trouble. Then I strongly suggest that you do. Put yourself to that trouble *now*. Overpay those credit cards by that additional £300 / month. This will both decrease what you owe now and prove to yourself exactly how hard/easy it will be. Then if/when the payments do go up by that much, you won't have to modify your standard of living and it won't be such a shock.

As for the personal loan vs credit card, my gut feeling would be whichever has lowest interest rate. Maybe you could find a 0% cc to shift the remaining debt to, as long as that doesn't lower your resolve not to add to it. Maybe with the extra £300 / month you might even manage to get rid all together? Nothing like a goal to get you motivated...

Good luck.

jackkelly

Hi we could on a mortgage absorb that amount as we both contribute to the household outgoings. I on my salary could not over pay my cc's by £300 amonth. My husband doesn't help with my debts I could go to £150 amonth as the max.
Hope that makes sense.

InMyDreams

Oh, OK. Obviously I don't know how you organise your finances between yourselves, but if between you you can put down an extra £300 without too much trouble somewhere, anywhere then I suggest you do it however your private arrangements let you, even if that means throwing it at the mortgage rather than extra to the credit card.

What if you were to let your husband help you with your debts and 'owe him' what he's put in? Pay him the interest you would be paying the credit card??? He won't get interest like that anywhere else and it would be tax free as money can move between spouses without incurring tax. I'm sure the tax man wouldn't class it as interest anyway. (Then try to persuade him to use all that 'interest' to overpay the mortgage some more )

Ugh, maybe I'm just getting silly and it's getting late