£67,031.92 is a frightening number indeed....

missymoo81 · 12 October 2017 at 7:08AM

Loving your lists and fingers crossed on the mortgage application.

Suffolk_lass · 12 October 2017 at 7:23AM

I am suitably impressed by the mortgage offer! I did once incorporate unsecured loans into our mortgage, when a change of circumstances meant it was that choice or a much less acceptable route involving down-sizing - so while the advice today is generally do not do this - if you are committed to overpaying your mortgage in the medium-long term it is a reasonable option. You do need to look at the long-term cost of that debt but for your cash-flow (your biggest issue) it will give you some peace of mind, and a time interval to pay down the rest.

I was going to suggest that while you are trawling charity shops for hyacinth bowls you might also think about tea-pots, cups and cake plates. You mentioned ages ago that you fancied a really nice cup to have a cup of tea and relax with. You could look for pretty mis-matched china in similar colour palette for you or your adult Christmas community. I have been looking at making cake stands as gifts, and for my fund-raising group. Just need to make sure we have the right drill-bit. I was planning to do a place-setting with a cake plate. There is lots of 1930s bone china in the shops near me that could be re-purposed with a bit of effort. I think I can get the cake stand fittings for under £3 each.

Silver_Queen · 12 October 2017 at 8:10AM

I admit that I am mildly horrified at securing unsecured debt but from what you've said, it sounds like the best option for you at the moment. It gives you room to breathe and a much more preferable interest rate. What I would suggest, if I may, is that you commit say, £100 of the money that will be freed up from the transfer, to overpaying your mortgage perhaps?

XSpender · 12 October 2017 at 9:53AM

I believe people advise against consolidating unsecured debt into secured debt not so much because of the interest rates over an extended term but with any consolidation it is the temptation, without changing habits, it is run back up again. You have changed your spending behaviour so I don't see it as that much of a concern.

Speaking from experience, when you need to do something drastic to sort out your debt and reduce your outgoings, 2% on £10k over the term of your mortgage is a drop in the ocean.

Something to be mindful of when looking at mortgage affordability and what to pay off is that when we bought a new house last year we had a small CC balance on 0% and the broker and the mortgage company used 5% as the repayment amount not the 1% we were actually paying. If our CC balances had been as high as they are now I don't think we would have got the mortgage.

Have you read Dave Ramsey's Total Money Makeover? He is a little too Christian for my taste but I feel the plan is sound.

enthusiasticsaver · 12 October 2017 at 10:16AM

2.19% is a good rate if you can get it so fingers crossed.

The advice not to turn unsecured debt into secured is because generally you pay over a much longer period so works out a lot more expensive, it does not compel the borrower to change spending habits to live within budget and that it puts your home at risk if you default whereas the consequences of defaulting on unsecured debt are much less.

I would say however you seem to have changed mindset and are dealing with your debt, not as quickly as some would but it is your debt so your call. The rate is much lower than the current Tesco loan and it gives you a chance to get to grips with saving for things you need like the extension and to build up an emergency fund and maybe deal with your longer term problems like lack of pension, car replacement etc etc. You are however using £20k of your fairly low equity to pay off a loan which came about through general frittering though rather than an asset. This may have consequences when you have to finance the extension.

Incidentally have you asked how much you would save should you not add the Tesco loan as presumably the mortgage payment would still go down although not by £387?

Treadingonplaymobil · 12 October 2017 at 3:53PM

Suffolk_lass wrote: »

I am suitably impressed by the mortgage offer! I did once incorporate unsecured loans into our mortgage, when a change of circumstances meant it was that choice or a much less acceptable route involving down-sizing - so while the advice today is generally do not do this - if you are committed to overpaying your mortgage in the medium-long term it is a reasonable option. You do need to look at the long-term cost of that debt but for your cash-flow (your biggest issue) it will give you some peace of mind, and a time interval to pay down the rest.

I was going to suggest that while you are trawling charity shops for hyacinth bowls you might also think about tea-pots, cups and cake plates. You mentioned ages ago that you fancied a really nice cup to have a cup of tea and relax with. You could look for pretty mis-matched china in similar colour palette for you or your adult Christmas community. I have been looking at making cake stands as gifts, and for my fund-raising group. Just need to make sure we have the right drill-bit. I was planning to do a place-setting with a cake plate. There is lots of 1930s bone china in the shops near me that could be re-purposed with a bit of effort. I think I can get the cake stand fittings for under £3 each.

That's a lovely idea. I didn't see any today but will keep an eye out. Some nice china for a restful cup of tea would feel like a lovely treat.

Silver_Queen wrote: »

I admit that I am mildly horrified at securing unsecured debt but from what you've said, it sounds like the best option for you at the moment. It gives you room to breathe and a much more preferable interest rate. What I would suggest, if I may, is that you commit say, £100 of the money that will be freed up from the transfer, to overpaying your mortgage perhaps?

The aim is to commit about £330 of the 387 that will be freed up, leaving £50 more wiggle room in the budget. The thought is that we will divide it roughly £150 to overpaying (or saving to overpay after 2 years if we can't overpay without penalty) and £180 to saving for the extension to give us some more room for manoeuvre when we get there.

XSpender wrote: »

I believe people advise against consolidating unsecured debt into secured debt not so much because of the interest rates over an extended term but with any consolidation it is the temptation, without changing habits, it is run back up again. You have changed your spending behaviour so I don't see it as that much of a concern.

Speaking from experience, when you need to do something drastic to sort out your debt and reduce your outgoings, 2% on £10k over the term of your mortgage is a drop in the ocean.

Something to be mindful of when looking at mortgage affordability and what to pay off is that when we bought a new house last year we had a small CC balance on 0% and the broker and the mortgage company used 5% as the repayment amount not the 1% we were actually paying. If our CC balances had been as high as they are now I don't think we would have got the mortgage.

Have you read Dave Ramsey's Total Money Makeover? He is a little too Christian for my taste but I feel the plan is sound.

NEVER running up debt again, so no fear there. I have the audiobook of the money makeover, but it seemed very inflexible for a variable income like mine. And an attitude to money like mine :rotfl: .

Treadingonplaymobil · 12 October 2017 at 3:56PM

enthusiasticsaver wrote: »

2.19% is a good rate if you can get it so fingers crossed.

The advice not to turn unsecured debt into secured is because generally you pay over a much longer period so works out a lot more expensive, it does not compel the borrower to change spending habits to live within budget and that it puts your home at risk if you default whereas the consequences of defaulting on unsecured debt are much less.

I would say however you seem to have changed mindset and are dealing with your debt, not as quickly as some would but it is your debt so your call. The rate is much lower than the current Tesco loan and it gives you a chance to get to grips with saving for things you need like the extension and to build up an emergency fund and maybe deal with your longer term problems like lack of pension, car replacement etc etc. You are however using £20k of your fairly low equity to pay off a loan which came about through general frittering though rather than an asset. This may have consequences when you have to finance the extension.

Incidentally have you asked how much you would save should you not add the Tesco loan as presumably the mortgage payment would still go down although not by £387?

If we didn't add the tesco loan then the mortgage payment would go down by more or less £100pm, so we're saving a fair whack per month by adding in the tesco loan in.

I'm uncomfortable because of the issue of remortgaging for the extension, but I figure if we're frugal and overpay then we'll still be able to extend, and if we're not then failing to extend is a better consequence than the consequences of having outgoings that are £387 higher and failing to make enough and needing to go down a DMP route or similar. If that makes sense.

Suffolk_lass · 12 October 2017 at 4:39PM

Have you looked at any of the images for dividing children's bedrooms online? I had a quick look ages ago and there was a rectangular house with a diagonal criss-cross that divided a large rectangular room into two triangular rooms. I merely mention it in case you want to consider a stop-gap or fallback to extensions - some stud partition and a couple of doors with some good design and artistic flair... your children are still quite young and not pushing for it yet - or private sleeping pods in a bigger room - just loads of good ideas

Treadingonplaymobil · 12 October 2017 at 6:59PM

Suffolk_lass wrote: »

Have you looked at any of the images for dividing children's bedrooms online? I had a quick look ages ago and there was a rectangular house with a diagonal criss-cross that divided a large rectangular room into two triangular rooms. I merely mention it in case you want to consider a stop-gap or fallback to extensions - some stud partition and a couple of doors with some good design and artistic flair... your children are still quite young and not pushing for it yet - or private sleeping pods in a bigger room - just loads of good ideas

We have considered it, and in an ideal world we won't do it, but if it gets towards the middle of next year and we're still a good 12-18 months away I think we'll have to address it. Triangular rooms is interesting, will have to look into that! DH is pretty handy.

Treadingonplaymobil · 12 October 2017 at 8:46PM

Lordy, work stress is still taking up disproportionate headspace. For the pitiful amount of my income it's caused me inordinate stress this month! I should have things slightly straighter next Tuesday when I have a meeting with someone who can give me more information and I'll be able to make a plan and stop going round and round in circles in my head. Just trying to forget about it until then, but it's very hard.

Did another charity shop run today and found a couple more nice dishes to use as pots, then got two more in a florists shop for £3.50 each. I think I have enough now. No sign of the actual bulbs though, so have emailed the place I ordered them from to cancel the order and will pop out to the garden centre tomorrow - need to get them planted on Saturday, they're late going in anyway.

Work enquiry from yesterday turned into a booking, so I have £80 towards November's expenses/salary. Compared to the last few months, that doesn't feel too bad considering we're not yet halfway through the month. I know the last couple of months have been terrible, but I generally feel that I have got so much more on top of my business account this year - lack of control of that was a huge contributor to the debt, as I was propping it up regularly due to bad money management. As it stands at the moment I have nearly the entire fee for the accountant ready to go - each month's expenses have a portion included to save towards the accountant fee. Also have £135 saved towards a new ipad type tablet (which I may not actually need if the work direction change that I'm contemplating happens, but I'll leave the savings there for now. It is also a bit of an emergency fund to cover expenses if necessary), regular professional fees covered for the month each month, a small business development kitty to spend on things like new equipment, stationery etc. It shows how small the profit is once all those things are accounted for, but at least I am actually accounting for all of those things now. The balance of this account rarely drops below £1,000 now because of all the buffers and kitties in there. I'm learning, slowly!

We had mujadara for dinner, a really cheap and yummy lentil and rice dish - I use this recipe, although I remove most of the onions while the rice and lentils are cooking then add them in at the end, as they always seemed to end up a bit flabby and pale again if they soaked in water for the entire cooking time. I also add plenty more salt than is suggested. The DCs are always a little dubious because it's not the prettiest dish in the world, but quite like it with a blob of houmous and some carrot on the side. We have loads of leftover bits of the last few meals for dinner - a selection of quinoa burgers, leek and potato soup and mujadara for dinner tomorrow, which means tomorrow's planned meal is carried over to next week's menu plan. Getting to grips with this food shopping thing!

I have set aside one day a month in the calendar for batch cooking too, which I think will make packed lunches less stressful, as I can fill the freezer with quiche, pasties etc. Oh, does anyone send in their DCs with a warm soup or pasta or similar? DC1 has asked if I could send a hot packed lunch, need to check with the school it's ok and buy an insulated food container, but it could be quite nice in winter I think.

To do today
1. Pop to town again for another charity shop trawl, and post office for smaller business posting. Done.
2. pack return for DC3 clothes - I ordered slightly too much, and although it's only about £15-worth of excess clothes, seems mad to keep them just because they're here. Returns are free.
3. gather info for mortgage broker. Done.
4. try to tick off some of the FORTY ONE things on my list. That's a new low. Many of them are tiny jobs though. Ticked some off, added some more. A mere 36 items on tomorrow's list. And a harvest service to attend. Sigh.

To do this week
1. Continue to plan Christmas gifts.
2. Plant hyacinth bulbs.
3. Charity shop trawl for stocking fillers and hyacinth planters.
4. Library ebooks.

To do this month
1. keep the total spend for the month below £3,500. Currently budgeted at £3,376.
2. work a sensible number of hours, even if it means slower progress on the work and debt front. September was rubbish. This is going well so far.
3. make any homemade Christmas gifts.

£67,031.92 is a frightening number indeed....

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