In trouble help!

Seaxwyn

Hi Steve, can you apply for a credit card with a 0% or low interest rate for balance transfers? If you can shuffle your debts around a bit that might be better than bundling them together into one loan.

Bismarck

I'm with Seaxwyn on this but I think the problem is more the size of the mortgage payment in relation to the income. Approx 2/3rds of income going on mortgage can't be good or sustainable. I keep looking at your SOA and hoping I've got the numbers wrong.

Are you eligible for any tax credits at all - can your OH work? I don't see any child benefit here either...

Seaxwyn

Ooooh yes, I hadn't noticed the size of that mortgage. Ouch! Could you switch to interest only for a short period, to free up some money to reduce the other debts. Also, if it's a big house, could you rent a room out?

Welshlassie

Steve31 wrote: »

Well i can post an SOA, but its a bit different in our case as i look after most of the fixed biills my wife the more varialble stuff.

Here it goes - am afraid i dont have APRs on me at the moment but can update tonight. What i would like to do is put all the debt together and get a better rate as i cant survive any longer like this.

Salary2858.8
BT49.31 This is high, what does it include?
Council Tax177 Is this paid over 10 or 12 months, this could give you a little extra each month
Flexiloan200 5000
Halifax Card130 7300
HSBC Card130 5000
Overdraft interest50 5000
Mortgage1955.29 Wow, is this repayment or interest only - could you go interest only for a short while to get control of the debts (using the difference to throw at the CC)
Southern Electric40 Hope your new utility companies are cheaper this is really high. Look at ways you can cut this down. Same goes for Gas, turn your thermostat down a degree or 2 you'll never notice. Have showers not baths, turn lights off when you leave rooms (get energy saving light bulbs), turn TV etc off standby overnight. Little things but can all make a difference.
Southern Gas62
Train280 is this a month, wow. Can it be cut at all?
TV27.1 I'd check this, we only pay 11.61 and that is across 12 months 6 this year 6 next.
Vodaphone19.99 Even if this is going in a few month she if you can drop the tarrif for the last few months now. Everyy £ will help at the moment
Water46.67

income2858.8
outgoings3167.36

Difference-308.56

As you can see im sinking more each month.
Notes
Mortgage is tied for 2 and a half years. I will get rid of phone in 3 months when contract expires, as i have a work one too. Have just switched utilitiy companies.

Am married with three kids, and i cant see anywhere else we can cut back. The only way i can see is getting a second job. I work in London and dont finish until about 7 each night. Thinking of call centres or something similar and just throwing all the extra cash at the debts.

Look forward to your replies!

Have made comments above in red

quantumleap

Steve,

Some of the others are quite correct. Don't get me wrong, with debts of 22k you've got some work ahead of you but with your income this sort of debt would usually be very managable BUT yours isn't because of the size of the mortgage.

Taking on a secured loan (consolidating) is a bad option because you are turning unsecured debt into secured debt, which is never ideal.

Is downsizing a feasable option because if you could reduce your mortgage payments significantly you would find that you could clear the debt quite quickly.

Would it even be possible to take a mortgage break for 12 months with your lender. By doing so you would more or less clear all of the debt. I know there would be interest added to your mortgage so it would be up to you to work out if it would be of benefit doing this.

count_rostov

Your commute is also very expensive. Would it be possible to work from home 2-3 days a week?

Bestthingsinlifearefree

You probably know it all ready but a mortgage of 2K a month is not helping the cause.

Would selling and renting for a while be an option? Moving to a cheaper area / down sizing?

You are earning a decent income it seems that your housing costs are disproportionately high. Why is this?

Steve31_2

Commute is expensive - no way to get this down - work in London, and have to be there everyday cant work from home.

Yes i am looking into credit cards at the moment 0% to transfer the cc debts

We are looking at renting out a room, but the house is an old house with lots of work needing to be done - we are hoping to get this finished in the next 2 and a half years then remortgageing or possibly sellign up. We got the house a t a good price, and most of the work is stuff i can do myself.

BT is BT Option 1 phone and brioadband

Vodaphone cant drop to a lower tarriff am on the lowest.

cant downsize as would would incurr costs of circa 20,000. Mortgage break never heard of that?

I think evening job is the only viable option

poppyg_2

Steve, is the type of work you do generally only based in London? Just wondered if it might be worth looking for a job a little closer to home even if the pay is slightly less to make savings in transport? Might not be possible just a suggestion

Yes mortgage is very high but as you're tied in I guess the only option would be either to see if you could switch to interest only for a while or as others have suggested taking a short 'payment holiday.' I don't know if all providers offer this but it might be worth giving them a call to find out. Alternatively, might it be worth seeing if they can extend the length of your mortgage - e.g. if it's currently a 25 year one asking if can extend to 30?? Again don't know how feasible this is

If your credit rating is pretty good I shouldn't think you'd have a problem getting credit cards with 0% deal to shift at least some of the debt. If you get one with any of the MBNA providers you can transfer money straight from bank account to clear the overdraft if the APR on that is quite high

Perhaps it'd be worth ringing your credit card providers to see if they might reduce interest, I've seen other people have done this with some success

Think if you try the CCCS debt remedy online that might be good just to see what it suggests, obviously you don't have to take up the advice and it's all anonymous and it saves speaking to someone over the phone too.

The important thing is you still have a good life whilst paying these debts off and if you're not getting in until late and obviously have children it'd be awful if you were working even longer hours and missing out on far more important things than money

quantumleap

Steve,

Most of the main high street lenders offer customers a mortgage break of either 3, 6, 9 or 12 months. Basically you can take a break from paying the mortgage for this period of time, however the bank continues to add the interest. For example if you had a repayment mortgage costing £500 pcm and £300 of that £500 was interest and you took a 12 month mortgage break then £3,600 in interest would be added to you mortgage at the end of the 12 months and your payments would increase accordingly.

Now this isn't for everyone but as you have such a big mortgage, taking a 12 month break would allow you to throw £23,460 off your debt, which would clear it completely. Obviously you'll need to work out how much interest you'll be adding to your mortgage and see if it is something you might want to look at. You'd also need to speak with your lender to ensure they would do this for you.