decisions on ISA !!

lacken12

hello advice please ,

I currently have 9,500 mortgage left approx with 4.5 years left to run on mortgage this is now being covered interest only linked to an isa with the same company which is approx 8,500 built up depending on which day you call for a valuation this also has 4.5 years to run which is aiming to reach 16,000 . i also have a unsecured loan which i owe 12,330 approx which has 8 years to run if i paid that off now it would be 10,500 approx .My problem is i am about to start a new job where my income is not going to cover the monthly outgoings ( going into debt ) over the next few months .Do i cash in the isa and pay most of outstanding mortgage or leave it where it is and tell the Mortgage company i can not afford the repayments and the same with loan company .
sorry this is long winded but i have tried to paint the proper picture of my problem .hope somebody can give me advice .

homer_j_3

You cannot turn around and say that you cannot afford it - well you can but its not the best way to deal with it.

Your debts are roughly £ 21880 (£9500 +12330)

You ISA is worth £8500 at present.

You have a net debt of £ 13300

What are you paying to each debt and to the ISA? What will your net income be going forward?

lacken12

currently isa £92 p/m ,interest only is £85 p/m ,unsecured loan £166 p/m.
total outgonigs p/m £1,400 (this includes £100 p/m paying back loans to family ) ,this does not include payments such as phone bill ,fuel ,car service +mot ,Tv licence .i/c approx £1,500 .
hope for a response .
Thanks

homer_j_3

So you are currently spending £1400 or £1500 a month with all bills and loans included?

What is your salary/income going to be? http://www.thesalarycalculator.co.uk/salary.php

May help you work it out if you are not sure. Its not 100% accurate but pretty close from my experience.

lacken12

thanks again the salary calculater will be usefull ,this might be a naive response from some one not really understanding fianacial matters but as you can see i am border line with income and outgoings should i close the isa and put it into paying off some of the mortgage or do i need to contact mortgage co. and loan co. and tell them my difficulty that i am going to have soon .

homer_j_3

I am still not sure what your income is and you say your income is going to be short for the next few months, could you elaborate on this?

If your income is going to be short for a few months, how short will it be? Will you be able to resume normality after the next few months?

It could be that your lender will let you take a 3 month payment holiday or that your ISA will allow you to stop the regular payment or reduce to a nominal amount. Which one you do if both options are open to you will depend on what rate you are getting on your ISA and what rate of interest you are getting charged on your mortgage.

You need to clearly state

Monthly income = £
Total Monthly outgoings (fully inclusive of living costs) = £

Amount left = £ (+/-)

Interest Rate on mortgage = %

Interest rate on ISA= %

Is the unsecured loan flexible in terms of you can make overpayments/underpayments without charge for example.

lacken12

Monthly income = £1,500
Total Monthly outgoings (fully inclusive of living costs) = £1,400
this does not include payments such as phone bill ,fuel ,car service +mot ,Tv licence which are unpredictable payments.

Amount left = £ (+/-)£100.00

Interest Rate on mortgage = %7.25
Interest rate on ISA= %this is a stocks and shares investment .

Is the unsecured loan flexible in terms of you can make overpayments/underpayments without charge for example.Not sure !!

the income coming in will be for the forseeable future no change for quite a while .
the mortgage and ISA do allow for holiday payments .dont know about the loan it is with Northern Rock so wouldn't be hopefull of underpayments

homer_j_3

Northern rock are usually quite flexible on their mortgages so see if they will give you a break first but unless you are going to be able to manage after 2 or 3 months, you need a more permanent solution

lacken12

Just to say the loan is with northern rock not the mortgage .
I think i am going to get the isa fund out and put it towards paying off the mortgage thus leaving me with approx £4,000 mortgage outstanding over 4.5y change it to a repayment mortgage and still have the loan outstanding with northern rock to pay off as i believe they can not take the house away from you on a unsecured loan !.As at least 12 months before i would be able too get sufficient income to pay off bills so reducing the mortgage payments as stated above means we might be able to struggle through fingers crossed .
hope i am making the right descision .
any thoughts