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  • FIRST POST
    • Treadingonplaymobil
    • By Treadingonplaymobil 12th Feb 17, 9:56 AM
    • 1,767Posts
    • 18,217Thanks
    Treadingonplaymobil
    67,031.92 is a frightening number indeed....
    • #1
    • 12th Feb 17, 9:56 AM
    67,031.92 is a frightening number indeed.... 12th Feb 17 at 9:56 AM
    67,031.92. Seriously. 67,031.92. That is a SCARY number. I can't believe our debt has peaked (and it is the peak, I am determined) at this level.

    Our light bulb moment actually happened a few months back, but it's taken since then of wrangling utilities and carefully watching out income/outgoings (using You Need a Budget) to really figure out where we were overspending and how the monthly shortfall of anything from 200-1,000+ was happening.

    We have literally nothing to show for this debt, it's just crept up over the past 8 years or so, and has always been at manageable levels, but back in October we realised we were spending more on credit cards each month than we were paying off.

    We committed that cardinal sin of taking out a consolidation loan, but alongside it we looked really carefully at our spending over the next couple of months, budgeted realistically for what we spend and have (I think) picked off all the easy 'low hanging fruit' of budget cuts and really identified why we were overspending.

    The main reason for the debt is, erm, me. Not that I'm the biggest spender (neither of us are amazing), but because I am self employed with a hugely variable income and basically worked out our budgets on the basis I would always earn my 'best' month's income. Which was, with hindsight, maybe a TINY bit deluded.

    The aim of this diary is to keep us on track with actually reducing our debt every single month, not doing it in a three steps forward, two (or four) steps back sort of way. Having sat down and put our numbers into the whatsthecost site, it appears that we are looking at 7 years and 1 month of repayments to clear the debt (and that's assuming we can get rid of the shortfall showing below). I REALLY want to reduce this term as that just seems bonkers.

    SOA below, with a couple of explanatory notes.

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 3
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 250 (variable, but this is the minimum I have earned in any month in the last 5 years)
    Partners monthly income after tax....... 2711.86
    Benefits................................ 192
    Other income............................ 0
    Total monthly income.................... 3153.86


    Monthly Expense Details

    Mortgage................................ 698
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 174 (including overpayment for a period when we messed up during a house move 18 months ago and didn't restart the direct debit for the new property. Will drop by a little under 50 after either March or April, can't remember which)
    Electricity............................. 52 (gas and electricity are one combined DD, I haven't checked the exact split but the total is 104)
    Gas..................................... 52
    Oil..................................... 0
    Water rates............................. 104 (also including a debt from previous property, but I think this will be included for another 6 months or so. I'm not sure what our actual usage is)
    Telephone (land line)................... 18.5 (includes internet)
    Mobile phone............................ 85 (45 for my contract, which I use for work as well, 40 for DH)
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 0
    Internet Services....................... 0 (included in landline cost)
    Groceries etc. ......................... 520 (Includes 40 for one lot of school lunches. I am REALLY struggling to reduce this, but feel I could and should be able to!)
    Clothing................................ 100 (growing children, plus see notes below re clothes)
    Petrol/diesel........................... 225 (90% DH commuting costs)
    Road tax................................ 16.27
    Car Insurance........................... 25.22
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 50
    Childcare/nursery....................... 70 (this will disappear in April as child 3 gets free 15 hours)
    Other child related expenses............ 81.85 (music/swimming lessons x2, cubs and beavers, National Trust membership as they love visiting them)
    Medical (prescriptions, dentist etc).... 5
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 27.07
    Contents insurance...................... 0
    Life assurance ......................... 16.26
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 90
    Haircuts................................ 20
    Entertainment........................... 135
    Holiday................................. 75
    Emergency fund.......................... 25
    Total monthly expenses.................. 2707.29



    Assets

    Cash.................................... 0
    House value (Gross)..................... 210000
    Shares and bonds........................ 0
    Car(s).................................. 800
    Other assets............................ 0
    Total Assets............................ 210800



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 173733...(698)......3.14
    Total secured & HP debts...... 173733....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Barclaycard....................6880.21...156...... .0
    MBNA...........................9614.71...98....... .0
    Parental loan..................20000.....0.........0 (see notes below)
    Tesco loan.....................21000.....377.......10
    Total unsecured debts..........57494.92..631.......-



    Monthly Budget Summary

    Total monthly income.................... 3,153.86
    Expenses (including HP & secured debts). 2,707.29
    Available for debt repayments........... 446.57
    Monthly UNsecured debt repayments....... 631
    Amount short for making debt repayments. -184.43


    Personal Balance Sheet Summary
    Total assets (things you own)........... 210,800
    Total HP & Secured debt................. -173,733
    Total Unsecured debt.................... -57,494.92
    Net Assets.............................. -20,427.92


    Created using the SOA calculator at stoozing.
    Reproduced on Moneysavingexpert with permission, using other browser.


    Regarding the (relatively) high clothes expense, it is a combination of 3 growing children (8, 6 and 3), plus the fact that my job is in the fashion industry, and as a self employed person I need to have the right sort of 'look' in order to get work (think along the lines of a self employed personal shopper - people need to see you looking good in order to book with you).

    The parental loan was for a house deposit. The parent in question has no idea about our debts. She is not desperate for the money back and isn't charging us interest, but has asked us to save 150-200 every month into a savings account and then once we've saved a decent sum to either repay them or 'reborrow' it for work on the house (basically they want us to be able to make repayments if they suddenly need the extra income, but meanwhile are happy for us to benefit from it. I am not saving the money while our debt payments are so high - we are hoping to have paid enough off that if the parent ever needs it that we can reborrow it and pay them back). This isn't great, but realistically I think the best solutions is to treat it as the lowest priority for snowballing - once we have paid back the other debts we will throw the entire 630+ at this debt.

    So, there is a freaking enormous shortfall every month, which is somewhat depressing. Most months it is covered by the fact that I earn more than my 'bare minimum', but it is those months where it isn't covered that the debt creeps up again, and I am a total disaster for going 'oh well, we've spent on the credit card, we might as well keep going' and buying more clothes or something for the house - this is probably a significant proportion of our debt problem.

    We have managed to get rid of the balance on the one credit card we were spending on, so the remaining ones are both on 0% deals (although one expires in September). I have not cut up the remaining credit card, because we don't have an emergency fund in case of eg boiler repairs, but it has not been used for all of a month, and I hope to keep it that way.

    A DMP or similar isn't really on my horizon right now - I feel like we should be able to make the cuts to make our budgets balance, and I am optimistic that as my income goes up (when I can work more as child 3 starts school) that we will be able to make overpayments.

    My plan for now is:
    1) Try to wiggle those budget numbers around enough that we don't have a shortfall any more.
    2) Make a plan for any months where I make extra - do I use it for an emergency fund, as a fund to cover future months' shortfalls, to throw money at the debt to try to reduce minimum payments in case of future 'shortfall' months?
    3) Try to make more money. Not quite sure how this will work as I am largely limited to working around DH's working hours (I work evenings and weekends and the 5hrs childcare per week we are paying for for child 3).

    Now that's all down in black and white I am feeling a combination of relieved (to be clear on the numbers) and immensely stressed (by the semi-regular 180+ shortfall).

    Onwards and downwards (for the debt, not me)!

    edited to add: the original 67,031.92 figure was based on the total figure for the Tesco loan, which included all interest payable over the entire term of the loan. I have updated the debt figure in my signature and in all posts going forward as at 4th June 2017 to reflect that actual current debt balance rather than the balance plus interest over the lifetime of the loan. This has knocked 7,911.62 off the debt figure, but means that each monthly payment will have the interest for that month deducted from it, so it won't affect the DFD if I don't make overpayments.
    Last edited by Treadingonplaymobil; 04-06-2017 at 2:58 PM.
Page 150
    • Treadingonplaymobil
    • By Treadingonplaymobil 14th Apr 18, 5:53 PM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Re the funding of the extension: At the moment, in true TOPM fashion, it's largely optimism and planning to increase our debt. Our priority at the moment is to cover the architect, planning, structural engineer and building regs bit without adding to our debt, and continuing to pay off debt at our current rate, as that allows us to abandon the process at any stage without having increased our debt if we decide it's not a goer. Then when we are ready to build we will borrow whatever is required for the actual build, with the hope of adding it to the mortgage once the build is done, but it will need to be an affordable loan in case we can't.

    We currently save 285pm towards the ongoing costs (architect etc, as above) and have 1,000 in that pot ready for the next bill, so are doing well with keeping ahead of those bills, and that 285pm savings could be put towards debt repayment once we borrow for the extension.

    My mum is willing to lend us at least 20k as long as we can match her (low) interest savings rate and repay something each month, but that won't cover it by any stretch of the imagination. Our issue is affordability of repayments rather than whether someone will lend to us, I expect, as our current unsecured debt on paper is <15k.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • Sea Shell
    • By Sea Shell 15th Apr 18, 7:01 AM
    • 1,055 Posts
    • 1,687 Thanks
    Sea Shell
    Just thinking out loud... If you currently put aside 285pm (affordable), how much "loan" can you get from a High Street lender for those sorts of repayments level. What does it buy you? Is in enough for the difference between Mum and total expected cost?

    I'm sure someone with knowledge of the loan market (and with better maths than me) will be able to tell you. As i have no idea what good rates are available at the mo.

    *EDIT*
    Actually, just had a quick Google, and for example Zopa loans have 16,000 over 5 years @ 2.9%, which costs 286pm. Would this be enough??
    Last edited by Sea Shell; 15-04-2018 at 7:08 AM.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 7:31 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    We'd be looking to borrow over 10yrs. By my maths we should be able to borrow 25k, as we can reduce CC payments down to minimums. It's still going to be tight though, for the 'best case' design. We're waiting to see what the architect says to our more specific. budget restrictions next week (we have set different limits on different sizes of extension, as the smallest option might not make the house work for us for the long term, so it needs to be cheaper so we can save to further improve or move).
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • Sea Shell
    • By Sea Shell 15th Apr 18, 7:46 AM
    • 1,055 Posts
    • 1,687 Thanks
    Sea Shell
    Thanks for the info.

    When planning the fixtures and fittings for the extension (especially kitchens and bathrooms) do you think you'll be able to reign in your "have the best" tendencies...and instead go for the nice, but practical (and cheaper) approach. The decisions made there can make 000's difference to your final costs. We know how you love your design etc. We only have to remember "Washing-up-bowl-gate"!!! - But we also know you've made HUGE changes since then.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 7:49 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Thanks for the info.

    When planning the fixtures and fittings for the extension (especially kitchens and bathrooms) do you think you'll be able to reign in your "have the best" tendencies...and instead go for the nice, but practical (and cheaper) approach. The decisions made there can make 000's difference to your final costs. We know how you love your design etc. We only have to remember "Washing-up-bowl-gate"!!! - But we also know you've made HUGE changes since then.
    Originally posted by Sea Shell
    I think I'll have to! At least that stage will come at the end when the budget will be just down to 'whatever is left', so it's not going to be about anything more than working with the money that's there. We all know I'm going to struggle with the reality of that though.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • Sea Shell
    • By Sea Shell 15th Apr 18, 8:00 AM
    • 1,055 Posts
    • 1,687 Thanks
    Sea Shell
    I think I'll have to! At least that stage will come at the end when the budget will be just down to 'whatever is left', so it's not going to be about anything more than working with the money that's there. We all know I'm going to struggle with the reality of that though.
    Originally posted by Treadingonplaymobil
    We found it's the little things that really add up, like taps, sockets, lighting etc.
    Plus things like tiles...sky's the limit with those blighters!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Suffolk lass
    • By Suffolk lass 15th Apr 18, 8:20 AM
    • 2,223 Posts
    • 22,883 Thanks
    Suffolk lass
    Just had a quick look at my BS (Skippy one) and their additional borrowing for existing customers offers a five year fixed rate 90% option that would work out at 280 repayments against 28k over ten years (but the payment might increase after five years if interest rates rise as predicted after the first five years).

    The only thing that worries me is your reference to minimum payments on other debts. It means you are looking at this from the affordability of the debt and not the plan to clear it. If interest rates do increase, you could be in trouble. Big trouble. Your Mum's 20k will need a repayment too. How much are you planning to pay monthly on that?

    Would you be willing to set out your unsecured debt that you currently have (with the interest rates and duration of these)? To see if we can help with ideas for reducing and eroding these to give you a bit more to put in or keep in hand
    MFiT T4 #2 update 90.89% after Q11 against revised stretch target of 60k balance
    Save 12k in 2018 #53 108.06% 12,967.42/12,000 (after upping my target from 10k to 12k in October)
    OS Grocery Challenge 2018 spent 2,410.06/3,000 including stores 80.34% of my annual budget at the start of Dec.
    My DFD is here
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 9:04 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Just had a quick look at my BS (Skippy one) and their additional borrowing for existing customers offers a five year fixed rate 90% option that would work out at 280 repayments against 28k over ten years (but the payment might increase after five years if interest rates rise as predicted after the first five years).

    The only thing that worries me is your reference to minimum payments on other debts. It means you are looking at this from the affordability of the debt and not the plan to clear it. If interest rates do increase, you could be in trouble. Big trouble. Your Mum's 20k will need a repayment too. How much are you planning to pay monthly on that?

    Would you be willing to set out your unsecured debt that you currently have (with the interest rates and duration of these)? To see if we can help with ideas for reducing and eroding these to give you a bit more to put in or keep in hand
    Originally posted by Suffolk lass
    It is a worry, I am basically relying on the fact that we can keep paying the debts down quickly enough that we can keep ahead of any interest rate changes (ie the minimum payment will be low enough that an interest rate rise won't cripple us). I am also, although I hate hate hate the idea, aware that once we have borrowed for the extension, it isn't such a crisis if we end up on a DMP or similar, as we won't be borrowing any more EVER AGAIN.

    I don't have the numbers in front of me, but will do a post with rough numbers in a sec.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 9:18 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Current debts

    I do have the numbers...

    Unsecured
    Parental loan 20,000 (no min, no interest, no current repayments)
    Barclaycard 11,345.77 (0% until Sept '18, anticipating being able to shift to another 0% at that stage as won't have borrowed for extension yet, minimum payment 260 last month, paying 285 per month at statement time, with around a 30 overpayment every month since Jan, so 315)
    Virgin 2,808.71 (0% until Sept '20 or thereabouts, min payment 28, only making minimum but will keep it at 28 as min reduces).

    Secured
    Mortgage 193,009.83 (2.99%-ish, 2 year fixed, expires Jan '20, 708.67 per month, this is approx 85% LTV).

    My current thought process is that we will continue to pay as much as possible for now, while saving for ongoing costs such as structural engineer, architect, planning, building regs, then our ideal plan is:
    - Get a tighter price estimate from the architect over the coming week, and proceed if the numbers make some sort of sense.
    - New 0% in Sept '18 for barclaycard balance.
    - By Jan '19 have CC debt reduced so that minimum repayments are closer to 200pm total.
    - Borrow 20,000 from my mother in early '19 when building work commences. Small interest/debt repayment, 50-100pm.
    - Borrow large personal loan (c.25,000) in spring '19 to continue to cover costs.
    - Finish shell work and as much interior as possible by Sept '19
    - Remortgage in January '20 to incorporate as much of this new debt as possible, as the house value will have increased due to the improvements.
    - Borrow another 10k if necessary in '20 to finish off any work not yet done (possibly kitchen, we may have a temporary one bodged from old units for a year to keep initial costs down while we repay more debt)
    - Prioritise remaining debts in interest-rate order, including some repayment for old parental loan, even if it's tiny.
    - Never borrow ever ever ever again, stay in that house for the rest of time.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 18, 9:24 AM
    • 7,390 Posts
    • 16,310 Thanks
    enthusiasticsaver
    I don't think you should be going into further borrowing thinking a DMP will be your get out of jail card.A DMP won't take account of any repayments for family debt so if your mum lends you 20k and you already have 20k family debt that is 40k which cannot be sorted with a DMP. Are you willing to default on a loan from your mum when she has said she needs you to make repayments? If you are going to take out a large unsecured loan then defaulting on that may mean that they will go for a second charge on your property. At the present time though I think you may fail the affordability checks for this anyway.

    A DMP will also affect your mortgage so as your mortgage is now quite high this will mean significant increases if you no longer qualify for good interest rate deals.

    My advice would be to continue to save as much as possible and repay the credit cards down by a bit more than minimums. Upping your income significantly though and paying off your credit cards is realistically the only way I can see you affording this extension.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 9:29 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    I don't think you should be going into further borrowing thinking a DMP will be your get out of jail card.A DMP won't take account of any repayments for family debt so if your mum lends you 20k and you already have 20k family debt that is 40k which cannot be sorted with a DMP. Are you willing to default on a loan from your mum when she has said she needs you to make repayments? If you are going to take out a large unsecured loan then defaulting on that may mean that they will go for a second charge on your property. At the present time though I think you may fail the affordability checks for this anyway.

    A DMP will also affect your mortgage so as your mortgage is now quite high this will mean significant increases if you no longer qualify for good interest rate deals.

    My advice would be to continue to save as much as possible and repay the credit cards down by a bit more than minimums. Upping your income significantly though and paying off your credit cards is realistically the only way I can see you affording this extension.
    Originally posted by enthusiasticsaver
    All of this is at the back of my mind too. A DMP has never been part of my plan and would be an absolute last resort, at the 'if the alternative was losing the house' level of last resort, rather than 'we might not be able to afford avocados every week' level, if you know what I mean.

    I am really truly hoping that we make enough of a dent in the CC debt/save enough in the extension pot this year that it seems less horrific to do this extra borrowing, as I can see how incredibly tight the numbers are and how close to total meltdown the whole thing brings us.

    Actually writing all this down has been a really good exercise, as I can see how much difference we can continue to make by paying off every extra penny we can.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 18, 9:39 AM
    • 7,390 Posts
    • 16,310 Thanks
    enthusiasticsaver
    I personally would use the additional 285 a month once the buildings/plans are sorted to make a bigger dent in your credit card debt rather than save in an extension pot. A relatively small savings pot will be a drop in the ocean in the overall costs and lenders take no account of savings. Reducing your debt by the current 343 plus 285 and delaying the build by 6 months would bring the debt considerably lower.

    Beyond having emergency savings to sort your car out I think your priority should be to clear as much of that unsecured debt as possible to get payments down and put you in best position to get further borrowing. You may have been able to up your income too by then as your youngest should be at school if she is now 4.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 9:50 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    I personally would use the additional 285 a month once the buildings/plans are sorted to make a bigger dent in your credit card debt rather than save in an extension pot. A relatively small savings pot will be a drop in the ocean in the overall costs and lenders take no account of savings. Reducing your debt by the current 343 plus 285 and delaying the build by 6 months would bring the debt considerably lower.

    Beyond having emergency savings to sort your car out I think your priority should be to clear as much of that unsecured debt as possible to get payments down and put you in best position to get further borrowing. You may have been able to up your income too by then as your youngest should be at school if she is now 4.
    Originally posted by enthusiasticsaver
    The 285 is currently going towards plans etc, as you say, but that's interesting re overpaying if there is any lag between getting that done and starting the build. good idea.

    youngest already has 4 days of preschool so it will only be one extra day (and each day is around 45 minutes longer, I suppose), and not until October as if they do the same as they did with my older ones, it's weeks and weeks of mornings only, mornings plus lunch, mornings plus half of afternoons, and so on. But it will all help.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 18, 10:39 AM
    • 7,390 Posts
    • 16,310 Thanks
    enthusiasticsaver
    On scenario 1 where you start the build in January 2019 you will reduce the Barclaycard to 8195 assuming 10 more repayments plus any BT fee in September. The Virgin would be 2528 so total unsecured debt 10723 assuming you pay BT fee separately.

    If you use the 285 repayment currently going to extension pot after 3 more months (assuming another 1000 to plans etc) and delay the build until Spring or Summer (better time to build as you won't lose all your heating etc while building going on) then that is an additional 3420 towards the debt and 6 months extra payments of 343 so 2058 plus you won't have to repay your mum until later on in year. That makes your unsecured debt look like 5245 which looks much more affordable. If your lender takes 5% as minimum monthly repayments they will still allow 262 anyway towards debt repayments but presumably you are hoping they take a lower monthly percentage?

    Personally I would get builders to quote in stages looking at plans so what would the 20k from your mum give you in say May 2019? Delaying further work until Autumn rather than spring would have brought your debt figures even lower by a further 3 months at 285 plus 343 each month (not allowing for mum repayment) so 1884 making total unsecured debt at that point 3341 by the point you apply for the further borrowing.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 12:18 PM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Thanks for crunching all the numbers! I had a rough idea but hadn't actually done the maths. Hadn't realised quite how much difference 3 or 6 months could make to the debt if we threw the whole lot at it after architect etc TBH.

    I want the build to start at a point where the knocking down of external walls/roof coming off is happening around easter and/or summer holidays in 2019, so we can decamp to a relative, and will be guided by that when it comes to planning a start date. I have been working with easter in mind, but it looks like it would ease things a lot if I changed that to summer, as I guess building would start in late spring rather than late winter.
    Last edited by Treadingonplaymobil; 15-04-2018 at 12:22 PM.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • Suffolk lass
    • By Suffolk lass 15th Apr 18, 1:44 PM
    • 2,223 Posts
    • 22,883 Thanks
    Suffolk lass
    The first thing that occurs to me is that you could explore combining both 0% cards into one 0% no fee (according to MSE Barclaycard and Santander both offer this for 27 months - you could check on the main site eligibility checker) which would look better when you come to apply for 25K and also give you just one to clear. Alternative is to ask the Barclaycard people if they will match it ahead of September, and include the Virgin total at the same time (they already have your credit history and you obviously have a significant limit on the account) - be cheeky and ask them to match the no fee (asking costs nothing). If you ask them now, any product jitters (withdrawing offers of 0%, no fees, or reducing term) as a result of the expected interest rate rise in two weeks time would not be an issue.

    The second thing is to look at additional borrowing as an alternative option - specifically these are longer term, lower than personal loan interest rates and with your mortgage provider. They are secured lending though. My BS specifically mentions using them for extensions and home improvements. They will take a view on the added value and a holistic view on affordability, and you still have the option to combine them into a single thing when you remortgage.

    I also did a quick check of ten year fixed rate 90% LTV options and 230k mortgage on 260k value would be 1017 per month (over 25 years) with Coventry BS (by way of an example). The timing is the thing - your current mortgage fix is only until Jan 20. I don't know what you pay in terms of broker fees and Mortgage application/lender fees but you should spend some time playing with the figures and options - if you remortgage every two years, these additional fees impact on the deal paying for itself (especially when you (I - I speak from bitter experience) casually add these to the mortgage total and discard my hard-won overpayments impact). Here are some other things to consider:
    1. Would your current lender extend additional borrowing to you at a better rate than a personal loan?
    2. Might it be better to start earlier if that is the case?
    3. If you did that, you might be borrowing in early 2019 and be finished building by the time that 2 year fix expires, ready to remortgage for the whole lot by Jan 20
    4. Would that be the time to go for a longer term fix (e.g. ten years)?
    5. What difference would consolidating the CC debt into that "forever" mortgage make to your monthly overheads?
    6. If you were to consolidate, would you be committed to making small overpayments to bring down the mortgage total more quickly (and either reduce payments or term, depending on your choices)?

    I know it sounds like I am encouraging you to go for it but I am actually encouraging you to make the options work financially smart for you. I am acutely aware that you have used your business account as an emergency pot in the past and you still don't have a proper one of these at the moment.

    I am sure others will have thoughts too
    MFiT T4 #2 update 90.89% after Q11 against revised stretch target of 60k balance
    Save 12k in 2018 #53 108.06% 12,967.42/12,000 (after upping my target from 10k to 12k in October)
    OS Grocery Challenge 2018 spent 2,410.06/3,000 including stores 80.34% of my annual budget at the start of Dec.
    My DFD is here
    • Suffolk lass
    • By Suffolk lass 15th Apr 18, 1:50 PM
    • 2,223 Posts
    • 22,883 Thanks
    Suffolk lass
    I agree with ES about paying down the debt on the CC first but aware I sound like a scratched record on this subject so my gargantuan post focussed on other things. You still have lots to think about and time to do so
    MFiT T4 #2 update 90.89% after Q11 against revised stretch target of 60k balance
    Save 12k in 2018 #53 108.06% 12,967.42/12,000 (after upping my target from 10k to 12k in October)
    OS Grocery Challenge 2018 spent 2,410.06/3,000 including stores 80.34% of my annual budget at the start of Dec.
    My DFD is here
    • Treadingonplaymobil
    • By Treadingonplaymobil 15th Apr 18, 7:06 PM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Suffolk thank you too for your thoughtful ideas.

    I am so grateful to all of you for, rather than (fruitlessly) arguing against the extension, helping with ideas to limit costs (no new washing up bowl ) and to do it in the most financial sound and stable way. I really really appreciate the time you're all spending on these ideas.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
    • baglady1
    • By baglady1 16th Apr 18, 12:55 AM
    • 52 Posts
    • 237 Thanks
    baglady1
    Hi TOPM Am in awe of these number crunchers. This is where this forum is so great - lots of really useful and practical advice plus much food for thought. Have no numbers to add unfortunately. Cheers Bl1
    • Treadingonplaymobil
    • By Treadingonplaymobil 16th Apr 18, 7:21 AM
    • 1,767 Posts
    • 18,217 Thanks
    Treadingonplaymobil
    Week 62: Day 1

    Morning! Back home and lovely to be here - for eight more whole hours before leaving with work for the next three days .

    Experimenting with a two week menu plan, we are going food shopping this morning with a view to buying everything we need from the supermarket to last until a week Friday. The aim is that we'll do a top up fruit and veg shop in town next week. Will be interesting to see whether it helps or hinders the food budget - I'm hoping that we'll just 'make do' as we run out of things so it might save the odd pound here or there, as well as saving half of the time and effort of driving to the supermarket (20 mins each way). Worried I'll get quantities horribly wrong, but it's an experiment.

    My dad's birthday lunch was wildly expensive yesterday - heavy drinking relatives and it being easier to just split the bill between the number of people meant I paid about 30 towards booze I did not drink, but luckily I had most of it saved (it was 112 including my share of my dad and step mum's lunches and I had 90 saved already). The extra came from the birthday pot, which is now empty so I hope the DC don't get any party invitations for the next two weeks!

    Right, best get on - busy morning ahead!

    To do today
    1. Food shopping.
    2. Bake flapjacks for school snacks.
    3. Order new uniform, school shoes etc.
    4. Pack for being away with work.
    5. Laundry loads on from weekend away.

    Debt repayment:
    - 29.95/30 April rounding down pot.
    - 1,922.49/5,000 2018 debt repayment goal.
    67,031.92 is a frightening number indeed... The debt free diary of one family and their enormous debt
    LBM debt on 12th Feb 2017: 38,608 unsecured debt/20,000 parental loan/173,282 mortgage = 231,890
    debt on 1st Sept 2018: 12,221.27 unsecured debt/19,940 parental loan/191,003.72 mortgage = 223,165
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