Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    incogni2
    Mortgage payment difficulty advice
    • #1
    • 28th Jan 09, 1:50 AM
    Mortgage payment difficulty advice 28th Jan 09 at 1:50 AM
    Hi,

    We took out a mortgage for £236,099 with Nationwide in June 2008. The mortgage is over 25 years, fixed for 5 years at 6.23%; 95% LTV (i.e. 5% deposit). The current monthly payment is £1554.56 per month.

    This means that we have made 7 payments so far, totalling £11,947.55 (due to a higher first payment than the standard) of which £9458.22 has been interest, leaving a balance of £233,609.67. (So little paid toward the capital!)

    My wife is in regular employment at approximately £45,000 per year. I work through my own limited company (basically a one-man consultancy vehicle) and our accountant certified my earnings as £15,000 per annum (which, at the time, I viewed as remarkably stingy but now looks worryingly optimistic). Anyway, we were confident that we could meet the repayments even though it was a 50% increase over what we were paying as rent.

    Unfortunately, though my wife’s job remains as stable as ever (and is almost certain to continue to do so), I have been unable to find further work since my last contract ended in October. In reality, I grossly underestimated the worsening economic and employment situations. I felt that because I had always found it relatively easy to find work in the past and with a strong client-base, there was little reason why I couldn’t continue to do so. Even if the opportunities were to diminish, they surely wouldn’t dry up entirely!

    My wife reckons that we are currently living at about £700 per month beyond our means (financed almost entirely from credit) and obviously some radical cost-cutting surgery is imminent. I was hopeful, having read about a new attitude from lenders toward borrowers in difficulty, that we might be allowed to shift to interest-only payments for a few months which, coupled with substantial personal economies, might allow us to at least break-even while I track down a job.

    We spoke to Nationwide and, firstly, we can’t go interest-only (due to a high LTV and other more technical reasons). However, we can ask for a “concession”. Basically, this would be a continued reduction in the monthly payment for an agreed period. So far, so rosy. If we complete and return an account of our expenditure, they will consider the concession. However, if at any point the total, rolling concession adds up to the same amount as our standard monthly payment then it will be recorded on our credit files as arrears. Lastly, once the concession period has ended, the amount conceded must be repaid again to an agreed schedule (6-12 months was suggested).

    This appears to mean that we could ask for a £500 per month reduction for 3 months without arrears being recorded (and have to pay back the £1500 thereby ‘lost’ to the lender over the following 6-12 months) or, equally, a £250 per month reduction over 6 months.

    I’m assuming the arrears being recorded on our credit files is not a good thing? (And such a strong negative would be like torture, albeit a mild form, given the effort spent correcting the data before we applied for the mortgage in the first place.)

    Even if I get a contract, I probably won’t see actual cash for two months, so the first option would only give me about a month’s clearance. The second option might be more realistic but £250 per month doesn’t seem like enough of a reduction to enable our credit cards to stop flexing (our current utilisation is around 50% but only because the damn companies keep putting the limits up whenever they are approached). What happens if I still don’t find work – do I just plunge into arrears hell? Certainly, I’d expect to find work soon but, given that previously I expected to find it instantly, I not currently keen to rely solely on my judgement.

    Clearly I’ve rambled on here and not asked many questions but I just wondered if anyone had any views as to the leniency and suitability of the lender’s solution and the possible credit-worthiness related effects?

    Thanks.
Page 8
  • incogni2
    Hacking around on open source is all very well but it's not a job - it's a bit of fun a lot of us fit around the day job.
    Originally posted by barnaby-bear
    I'm not trying to claim that it is a job (though a lot of people would disagree that it is simply a bit of fun), just something hopefully useful to be doing while looking for work.
  • incogni2
    In this economic climate the chances of you earning more or getting the next big contract are going down.....
    Originally posted by barnaby-bear
    I'm sorry, can you clarify, please. Do you mean the chances of me earning more than 0, or more than what?

    Also, the "next big contract" doesn't have to be big (small would do very nicely).
    • getmore4less
    • By getmore4less 1st Feb 09, 11:31 PM
    • 38,388 Posts
    • 23,828 Thanks
    getmore4less
    It is in this thread somewhere but quite difficult to find. I spend £35 (approximately), it is an 18-month contract. I don't know if I can legitimately 'break' that contract somehow but I'll look into it (it probably ends in April/May).

    My wife has a Pay as you Go mobile. I don't know, at this moment, how much she spends on top ups. Not that much, since I think she only really uses it to text/call me to let me know that the train will be late or whatever.
    Originally posted by incogni2
    I am suprised anyone is paying full price for a mobile phone contract these days, up untill very recently free contracts with 100's of min and text have been available with cash backs.

    Saving money is not always about not spending it is about getting things cheaper so the money goes further.

    perhaps some of the free time woud benifit from a look at www.hotukdeals.com

    Reducing/paying less for debt is a form of saving, if you think the replies are biased by the site another good site for financial education is www.fool.co.uk the forums there are more biased to makng money it has a good debt board with less agressive posters also a couple for business repated that may be of some use.


    Anyway do you have a plan yet?
  • incogni2
    I am suprised anyone is paying full price for a mobile phone contract these days, up untill very recently free contracts with 100's of min and text have been available with cash backs.
    Originally posted by getmore4less
    Well, I got it in November 2007 when my finances were significantly more stable.


    Thank you for the link, I will check it out.
  • incogni2
    I thought that I should, as a result of many vociferous comments, investigate the idea of getting rid of Sky (just in case, I've paid for February now, but if I don't find work in the next 3 weeks).

    I've been messing around with an internal antenna (which I bought ages ago but I believe it to be of good quality) and can't get any reception whatsoever. Does anyone have any suggestions? I could go Freesat but I'd have to buy/acquire a box. (This is, at least, a money saving question.)
  • wisbech_lad
    Heh, most of this thread could be summed up by Mr Dickens

    "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." - David Copperfield.
  • beecher
    I thought that I should, as a result of many vociferous comments, investigate the idea of getting rid of Sky (just in case, I've paid for February now, but if I don't find work in the next 3 weeks).

    I've been messing around with an internal antenna (which I bought ages ago but I believe it to be of good quality) and can't get any reception whatsoever. Does anyone have any suggestions? I could go Freesat but I'd have to buy/acquire a box. (This is, at least, a money saving question.)
    Originally posted by incogni2
    If you get rid of Sky you'll still be able to view the free channels through the box. No need for internal antenna or buying a new box or anything.

    Have you had HD for 12 months? There was talk of there being a 12 month contract, though it wasn't made clear to existing customers so I'm not sure if you can get out of it.

    I still think you should post a Statement of Affairs on DFW - get a new username if you'd rather people from this thread didn't see it.
  • incogni2
    If you get rid of Sky you'll still be able to view the free channels through the box. No need for internal antenna or buying a new box or anything.
    Originally posted by beecher
    Ah, good point, thanks.

    Have you had HD for 12 months? There was talk of there being a 12 month contract, though it wasn't made clear to existing customers so I'm not sure if you can get out of it.
    No, about 8 months. I'll dig out the documentation.
  • incogni2
    Yep. 12 month minimum contract dated 13/6/2008.
  • fozziebear40
    Yep. 12 month minimum contract dated 13/6/2008.
    Originally posted by incogni2
    If you had Sky previously you may only be in contract for the HD bit ... £10 / month

    I bet you have an iPhone
  • incogni2
    If you had Sky previously you may only be in contract for the HD bit ... £10 / month
    Originally posted by fozziebear40
    Unfortunately we didn't have Sky previously. In our previous accommodation we had cable. When we moved, there is no cable provision here and no roof aerial so we went with a dish.

    I bet you have an iPhone
    I'm afraid so! (Working at the time.)
    • poppy10
    • By poppy10 3rd Feb 09, 12:33 AM
    • 6,230 Posts
    • 7,553 Thanks
    poppy10
    I bet you have an iPhone
    Originally posted by fozziebear40
    I'm afraid so! (Working at the time.)
    Originally posted by incogni2
    Dear oh dear. This guy is an embodiment of what is wrong with today's want-it-all-right-now generation.
    • getmore4less
    • By getmore4less 3rd Feb 09, 1:31 AM
    • 38,388 Posts
    • 23,828 Thanks
    getmore4less
    I thought that I should, as a result of many vociferous comments, investigate the idea of getting rid of Sky (just in case, I've paid for February now, but if I don't find work in the next 3 weeks).

    I've been messing around with an internal antenna (which I bought ages ago but I believe it to be of good quality) and can't get any reception whatsoever. Does anyone have any suggestions? I could go Freesat but I'd have to buy/acquire a box. (This is, at least, a money saving question.)
    Originally posted by incogni2
    One off payments for a dish/freesat fit with with the earn to spend stratagy
    but regular payment(to sky) don't they need ongoing income

    Can you get the footy online delayed or does it have to be live?
  • incogni2
    One off payments for a dish/freesat fit with with the earn to spend stratagy
    but regular payment(to sky) don't they need ongoing income

    Can you get the footy online delayed or does it have to be live?
    Originally posted by getmore4less
    I was just trying to understand (for the purposes of gaining a broader perspective) the repercussions of not receiving the football at all and ditching Sky completely. However, as pointed out by another poster, I have a 12 month contract with Sky which runs until mid-June.

    The guy also suggested that I could simply use the dish, without payment to Sky, in order to receive the regular channels (i.e. I wouldn't need the additional receiving equipment I had originally supposed). But I still have that contract at the moment.
  • incogni2
    Dear oh dear. This guy is an embodiment of what is wrong with today's want-it-all-right-now generation.
    Originally posted by poppy10
    Jeez, you people are hard taskmasters indeed if the mortgage-free and debt-free (at that time) are to be condemned for spending their wages on a phone (or pretty much anything they like for that matter).
  • Kez100
    What the problem people have with your expensive subscriptions is that you have never saved to help if you ever hit a rainy day - not even when earning. Your borrowing is massive and you really needed to work towards some savings as a buffer when you were earning not spend every penny. If you had saved then you would have had more chance in surviving this mess.

    You are by no means the only ones but you have to get your head around this keeping up with the Jones, and fast.
    Last edited by Kez100; 03-02-2009 at 8:57 AM.
  • beecher
    I was just trying to understand (for the purposes of gaining a broader perspective) the repercussions of not receiving the football at all and ditching Sky completely. However, as pointed out by another poster, I have a 12 month contract with Sky which runs until mid-June.

    The guy also suggested that I could simply use the dish, without payment to Sky, in order to receive the regular channels (i.e. I wouldn't need the additional receiving equipment I had originally supposed). But I still have that contract at the moment.
    Originally posted by incogni2
    You can still go down to the basic channels plus HD which would save a bit. I'd phone up Sky, explain that you're out of work and that you need to save money. They may offer you some sort of deal so might be worth it.
    • silvercar
    • By silvercar 3rd Feb 09, 9:39 AM
    • 39,792 Posts
    • 164,130 Thanks
    silvercar
    Jeez, you people are hard taskmasters indeed if the mortgage-free and debt-free (at that time) are to be condemned for spending their wages on a phone (or pretty much anything they like for that matter).
    Originally posted by incogni2
    You just don't get it.

    Spending your wages is fine if you have money aside to meet all your regular bills. Committing yourself to further expenditure - like taking on contracts for sky & phones - is only OK if you have set money aside to pay the contracts.

    I thought the point of contracting working was that you earned more when working but had no holiday / sick/ insurance benefits so had to make your own provisions. You also have to set money aside for times when you are not working.

    Spending your contract earnings as if they are PAYE is asking for trouble.
    • uzubairu
    • By uzubairu 3rd Feb 09, 11:14 AM
    • 1,175 Posts
    • 3,157 Thanks
    uzubairu
    What the problem people have with your expensive subscriptions is that you have never saved to help if you ever hit a rainy day - not even when earning. Your borrowing is massive and you really needed to work towards some savings as a buffer when you were earning not spend every penny. If you had saved then you would have had more chance in surviving this mess.

    You are by no means the only ones but you have to get your head around this keeping up with the Jones, and fast.
    Originally posted by Kez100
    I think he has got that message.

    I too find his actions rather reckless , but in all fairness, there are many more people living like him who are yet to come unstuck.

    I work with people who earn a lot more than me, and their finances are poo.
    I have colleagues who would not be able to get by without overtime (which has been cut at work) and they are earning over £30K.

    Too many people live beyond their means for a variety of reasons. In this current economic climate, the cracks may start to appear.

    Although I agree with a lot of what has been posted on this thread (I'm a self-confessed MFW), a lot of the replies are from people who would never in a million years end up in a situation as the OP, and some of their replies have been IMHO unhelpful.

    Pouring scorn on his actions that have got him into this sorry mess doesn't help him one bit.
    If this almighty mess doesn't teach him the lessons of money management he should have learnt many years ago, then nothing will.

    incogni2 -The Debt Free Wannabe forum will provide you with a lot more support from people who have experienced what you are going through now and understand what needs to be done to get through it.
  • Kez100
    I think he has got that message.

    I too find his actions rather reckless , but in all fairness, there are many more people living like him who are yet to come unstuck.

    I work with people who earn a lot more than me, and their finances are poo.
    I have colleagues who would not be able to get by without overtime (which has been cut at work) and they are earning over £30K.

    Too many people live beyond their means for a variety of reasons. In this current economic climate, the cracks may start to appear.

    Although I agree with a lot of what has been posted on this thread (I'm a self-confessed MFW), a lot of the replies are from people who would never in a million years end up in a situation as the OP, and some of their replies have been IMHO unhelpful.

    Pouring scorn on his actions that have got him into this sorry mess doesn't help him one bit.
    If this almighty mess doesn't teach him the lessons of money management he should have learnt many years ago, then nothing will.

    incogni2 -The Debt Free Wannabe forum will provide you with a lot more support from people who have experienced what you are going through now and understand what needs to be done to get through it.
    Originally posted by uzubairu
    With respect the OP has been advised, on here, time and time again that a SOA and DFW is the way to go. For whatever reason he chooses to remain here.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,404Posts Today

7,110Users online

Martin's Twitter