Your help please??

richash

Please help me decide,

I recently built a house and have a mortgage for £135k ish , was a bit
stupid in the design process and went over the top, then came the huge
bills like Oil central heating - £210 pm, Council tax - £200 pm,
mortgage payments of £1000 pm, and about £23k of outstanding loans and
cc bills mostly racked up trying to finish the house before I clainm
£11k back in vat (horray), and all the other household bills. It was
valued at £500,000 about 18 mths ago.

Would you,

SELL and be mortgage and debt free?

or

STICK IT OUT because it is your dream house, although you know that you cant afford it?

PS Wife and kids do not want to move.

BTW, if I decide to stay, looking for a broker to help with a
remortgage and consolidation to bring my payments down, any
recomendations
[tt]Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 700
Benefits................................ 150
Other income............................ 0
Total monthly income.................... 2850

Monthly Expense Details
Mortgage................................ 1000
Secured loan repayments................. 185
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 180
Electricity............................. 35
Gas..................................... 0
Oil..................................... 200
Water rates............................. 20
Telephone (land line)................... 25
Mobile phone............................ 70
TV Licence.............................. 10
Satellite/Cable TV...................... 40
Internet Services....................... 20
Groceries etc. ......................... 250
Clothing................................ 100
Petrol/diesel........................... 200
Road tax................................ 25
Car Insurance........................... 25
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 70
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2520

Assets
Cash.................................... 0
House value (Gross)..................... 500000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 503000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 135000...(1000).....5
Secured Debt.................. 11000....(185)......6
Total secured debts........... 146000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
card...........................5000......185.......0
card...........................5000......185.......0
card...........................3200......100.......0
Total unsecured debts..........13200.....470.......-

Monthly Budget Summary
Total monthly income.................... 2,850
Expenses (including secured debts)....... 2,520
Available for debt repayments........... 330
Monthly UNsecured debt repayments....... 470
Surplus(deficit if negative)............ -140

Personal Balance Sheet Summary
Total assets (things you own)........... 503,000
Total Secured debt...................... -146,000
Total Unsecured debt.................... -13,200
Personal net worth...................... 343,800

Created using the SOA calculator at https://www.makesenseofcards.com. [/tt]

======== Enter any other useful information below ========

poorandindenial

richash wrote: »

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 700 (any chance partner could earn more?, I appreciate this may not be possible, just worth thinking about)
Benefits................................ 150
Other income............................ 0
Total monthly income.................... 2850

Monthly Expense Details
Mortgage................................ 1000
Secured loan repayments................. 185
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 180
Electricity............................. 35
Gas..................................... 0
Oil..................................... 200 (will this be this high all year round?)
Water rates............................. 20
Telephone (land line)................... 25
Mobile phone............................ 70 (this is high - how many phones, is this contract or PAYG; PAYG is often cheaper)
TV Licence.............................. 10
Satellite/Cable TV...................... 40 (£85 a month on phone, internet and TV is high, go for a basic package and get them combined, you can get packages for about £30 a month for all three)
Internet Services....................... 20
Groceries etc. ......................... 250 You can probably trim this down - check out the moneysaving old style board
Clothing................................ 100
Petrol/diesel........................... 200 (can you cut some of the journeys out?)
Road tax................................ 25
Car Insurance........................... 25
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20 (can you combine this and buildings and save cash? if so then switch through Quidco and get cashback)
Life assurance ......................... 70 (check on comparison sites and see if you can vet equivalent cover for less)
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2520

Just a few suggestions from me. I think you can trim back quite a bit on some stuff. Definitley worth a go before you sell your dream house.

Could you go interest only on your mortgage for a while? You have plenty of equity in the house so you have wiggle room to go back to repayment when you are in a better situation

richash

poorandindenial wrote: »

Just a few suggestions from me. I think you can trim back quite a bit on some stuff. Definitley worth a go before you sell your dream house.

Could you go interest only on your mortgage for a while? You have plenty of equity in the house so you have wiggle room to go back to repayment when you are in a better situation

Was on interest only during the build nd switched about 2 years ago. thanks for your comment, anything helps.

PasturesNew

I do find these SOAs very long-winded (bigger than the height of my screen).... however, my opinion:

richash wrote: »

Oil central heating - £210 pm

Turn that heating off. If every family member had their own personal fan heater they carried round with them it'd be cheaper!
Not recommending that, but making a cost:benefit point.

richash wrote: »

Oil..................................... 200 - stop using it
Telephone (land line)................... 25 - don't make phone calls; make them at cheap times; keep calls brief.
Mobile phone............................ 70 - same advice as for the landline
Satellite/Cable TV...................... 40 - kill it
Groceries etc. ......................... 250 - way too much. You can halve this
Clothing................................ 100 - You must have enough clothes by now

I think if you cut back on a few things and stopped using that heating, you'd be OK.

Then you can work on knocking some of that debt on the head before it costs more than 0%

From the list above, I can spot £500 of easy savings.

poorandindenial

nIt is pretty brave posting your SOA, you will get great advice but I know it can feel a bit like your life is under attack so well done for doing it.

I really think one of the easiest immediate cutbacks could be the phones, internet and TV though. Good luck getting back on an even keel.

EDIT -I don't really understand oil as I have always had gas and leccy but if you can cut that back then do.

PasturesNew

I think you can afford the house... if you just scrimp for 1-2 years max. And it's not much scrimping really.

Also, if the wife's so keen to stay there, can she get a part time job (evenings/weekends?) If she could put just £100 in the pot for 20 hours/week that's £5k off those debts. . .

You are a partnership. It's not "me/man/provider" "you/woman/pretty". She'd probably LOVE to feel she's done something to keep the house as you did all the work building it.

delboypass

Sounds like your house is overvalued to me...

Did you get multiple surveys carried out esp. in todays climate of credit crunch as i doubt many people can borrow £500k any more...

Be vary trying to protect an overvalued asset...

I personally would sell it, take the amazing profit you will have made...if you can sell it at the price...and live within my means...

perhaps build another one???

dudleyboy

Hi,

If you can sell it, I honestly would. With house prices set to crash by approximately 30% (they estimate in the next few years, but I'm estimating by this time next year if not earlier considering how "optimistic" all the previous forecasts have been) your £500,000 asset will drop in value to £350,000 (still a decent profit, mind).

At the moment your mortgage repayments are 50% of your own net monthly income. With the cost of living due to increase even steeper than it currently has you're going to be feeling the squeeze for many years to come, and while your home may be beautiful your lives could be miserable.

I've looked through your SOA and while you could cut back on food shopping, travel expenses, cable TV, etc, they're really just going to be drops in the ocean, and on your salary you really should be able to afford and enjoy a few luxuries.

The main monthly expense is your mortgage and I think that cutting back there is where the greatest savings can be made.

richash

PasturesNew wrote: »

I think you can afford the house... if you just scrimp for 1-2 years max. And it's not much scrimping really.

Also, if the wife's so keen to stay there, can she get a part time job (evenings/weekends?) If she could put just £100 in the pot for 20 hours/week that's £5k off those debts. . .

You are a partnership. It's not "me/man/provider" "you/woman/pretty". She'd probably LOVE to feel she's done something to keep the house as you did all the work building it.

Thanks for the comments, however she does already work 24 hours a week which is the most possibe at the mo due to chidcare.

peb

Just a quick thought - have you got the £10k back from teh VAT man yet? this could make a big difference if you snowball where it is to go.

lucielle

Why is your oil cost so high? I have oil and pay £40 per month.