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advice sought please

Help and discussions for strategies to get out of debt
cheshirecat
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Re: advice sought please

#161375

Postby cheshirecat » August 22nd, 2018, 10:49 pm

PinkDalek wrote:
robbelg wrote:Can you get another loan? - even at 12.9% it would be better than the credit cards.


Alternatively is remortgaging a possibility, given the apparent equity in the property, which may not be impossible given the loans appear to be unsecured, and it might therefore spread the repayments further into the future? I know little of mortgages though and wonder if the existence and level of the unsecured debt would make remortgaging an no go area.


I have given serious thought to remortgaging. However, my mortgage is currently split into 3 sub accounts. Two of which track 0.75% >BoE base rate (which equates to 1.25% currently), the third of which (£17,107.45) is on 3.99%. It is unlikely that any lender would lend me anything like the amount required to pay off all of the unsecured debt in entirety, let alone give me rate like the ones I currently have. That said, there is the likelihood of an interest rate hike in the near future so this is an option I am toying with, albeit reluctantly. Mortgage will settle in 8 years.

cheshirecat
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Re: advice sought please

#161379

Postby cheshirecat » August 22nd, 2018, 10:52 pm

Alaric wrote:
cheshirecat wrote:Loan 1 settles in 50 months and loan 2 in 53 months. My plan was to throw any surplus to the mastercard, as this is the debt with the highest interest but that kind of goes against the snowball principle does it not?


That is the snowball principle. If you pay off some of the debt with the highest APR first, you save on next month's interest, so you've got more spare cash available. Hence "snowball" because the amount you can pay off increases with time.


Ah, my apologies, and I understand this - I mistakenly thought the snowball principle was to pay off the smallest debt first, regardless of the interest rate.

Alaric
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Re: advice sought please

#161439

Postby Alaric » August 23rd, 2018, 10:40 am

cheshirecat wrote:I have given serious thought to remortgaging.

...

Mortgage will settle in 8 years.


Assuming they are repayment mortgages, you may be able to extend the term. This would reduce the monthly outgo so you are no longer reducing the mortgage borrowing by quite so much, freeing up some money to pay off the higher interest rate credit cards.

melonfool
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Re: advice sought please

#161447

Postby melonfool » August 23rd, 2018, 11:15 am

Well, I live in a three bed terrace, cost £260k last year:

council tax - £97pm (12m)
gas&electric - £60pm
water - £28pm
BB - £7pm
Phone - £117 pa
Mobile £6pm
Buildings and contents insurance - £122 for the year


I think the question is - what did you spend the money on and is it all your responsibility? If you spent this, will you really be able to live to the budget you have set? It is habits that need to change here I think.

Ref renting a room - I used to rent one out Mon-Fri only , that was quite nice, you get the income but still have your own space and as I was at work all week anyway I barely saw them.

Mel

Watis
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Re: advice sought please

#161456

Postby Watis » August 23rd, 2018, 11:44 am

cheshirecat wrote:Statement of Affairs and Personal Balance Sheet

Groceries etc. ......................... 250




No-one has mentioned this, yet it is your biggest expense after your mortgage.

I'm assuming this is an estimate now you have revealed your partner is moving out. if so, and based on my spending in this category for a household of 2, you could work on pruning this back to £200 with some judicious shopping around.

Which would give you another £50 or so to throw at those loans . . .

HTH,

Watis

kempiejon
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Re: advice sought please

#161474

Postby kempiejon » August 23rd, 2018, 1:09 pm

I found keeping a spending diary, itemising every transaction and recording everything, I had a spread sheet and broke down my spending daily. It's tedious and time consuming but enlightening. After a few months it seems easier and can give a clear mmoney of where the cash is going. I had no idea I was spending that much on household cleaners. Or that " motoring" was as big an expense. We can all cut down on clothes for a few months and run the cupboards to empty for a few months. Like Watis I feed two for less than £250pmth, I think a few pounds per person per meal it's the etc that breaks it, is that cleaning and luandry bits, booze, magazines, personal hygiene.

MikeyWorld
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Re: advice sought please

#161504

Postby MikeyWorld » August 23rd, 2018, 3:12 pm

I'm not that knowledgeable about mortgages - I went for an offset.

Will your lender move you over to interest only / payment holiday? - 4% on 50K is £2k per year - £170 per month.

You've then got an extra £400 per month to throw at the cards.
You've still got to find this money to pay off the mortgage, but that will be far easier once the cards are paid down.

I assume you have combined building and content insurance. If the place burns down, replacing pants, fridge, henry hoover, comb, bum roll, etc. soon adds up.

cheshirecat
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Re: advice sought please

#161611

Postby cheshirecat » August 23rd, 2018, 9:51 pm

Watis wrote:
cheshirecat wrote:Statement of Affairs and Personal Balance Sheet

Groceries etc. ......................... 250




No-one has mentioned this, yet it is your biggest expense after your mortgage.

I'm assuming this is an estimate now you have revealed your partner is moving out. if so, and based on my spending in this category for a household of 2, you could work on pruning this back to £200 with some judicious shopping around.

Which would give you another £50 or so to throw at those loans . . .

HTH,

Watis


You're absolutely right, it is an estimate and I do think I will be able to cut this back a bit. I will do as kempiejohn suggests and keep a close record of what I spend in month, then look at where I can make additional savings

cheshirecat
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Re: advice sought please

#161613

Postby cheshirecat » August 23rd, 2018, 9:54 pm

[quote="MikeyWorld"]

Will your lender move you over to interest only / payment holiday? - 4% on 50K is £2k per year - £170 per month. - This isn't something I had considered, however I may look at that in more detail

You've then got an extra £400 per month to throw at the cards.
You've still got to find this money to pay off the mortgage, but that will be far easier once the cards are paid down.

I assume you have combined building and content insurance. - Yes, I do, but I do need to shop around for that

Hariseldon58
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Re: advice sought please

#163399

Postby Hariseldon58 » August 31st, 2018, 4:37 pm

I have a lot of sympathy, been there, done that. It can be very distracting to living a good life.

Getting out of debt can be done, its tedious but first I would suggest that you work out, "How did I get here ?"

Address the "how it happened" and live within your means to prevent a reoccurrence.

You are in a hole, then stop digging, no point in throwing every penny possible at reducing the debt until you have a manageable lifestyle, perhaps you put the full £500 towards repaying debt for a few months and then stumble....get the spending sorted, dump the cards, have a cash reserve.

When your in the hole, its easy to flash the cards at a moment of weakness but if you have £1,000 or so reserve put by and only spend cash, then its much easier to resist if you feel you could buy it, from your stash of cash...you think of how useful the reserve is, peace of mind and are loath to us it !

The loans take care of themselves in time, the cards, take care of the smallest debt, (since the Halifax Mastercard debt is only slightly larger than the Virgin Card and costs more...then Halifax first, followed by Virgin and then Barclaycard).

Now there is only so much far you can cut costs for four years or so, then raising your income IS VITAL.

Foreign language students are popular here but a lodger, or Monday to Friday lodger is going to lift your income and my experience was that it works out far better when it becomes an individual rather than the faceless image of sharing your home with a stranger

My issues were 30 years ago but controlling spending made a huge difference and it's not that one lives forever watching pennies but I always kept a cash reserve and this prevented wasteful impulse purchases, it left money over for saving and I managed to invest £2000 in investment trusts in 1990 and then started a regular savings plan and in 2007 I retired, before I was fifty...purely from those investments and subsequent regular savings growing

cheshirecat
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Re: advice sought please

#163990

Postby cheshirecat » September 3rd, 2018, 8:04 pm

Thank you, Hariseldon58, for your kind and considerate comments. I do not think in the whole time I have been ignoring this issue that I have ever dealt with the 'why'.


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