Borrowing more on mortgage

Soldato
Joined
20 Feb 2004
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Hondon de las Nieves, Spain
Agreed, you need to be overpaying generally but the advantage of the lower payment is that you could just pay the minimum for the first few months to build up a decent savings pot to help with any emergencies. Once you've got a pot of about a grand you can then get pack to overpaying.

The other advantage of the lower fixed payment is that the overpayments are optional, so whilst you do want to overpay as much as you can to clear the debt, again you give yourself the option to not do so should anything pop up. That helps you to avoid having to take out further debt.
 
Joined
4 Aug 2007
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21,386
Location
Wilds of suffolk
OP are you saying its costing you £50 a month in OD fees/interest for £4 worth of loans?
So £600 a year interest for a £4k loan? Thats effectively 15% if you even calculate as simple interest, depending exactly how the fees ate are calculated that can go up further as the debt gets smaller.
Can you check the fee structure.

So immediately you should maybe consider a loan to clear them. Eg borrow £4k for a debt consolidation and immediately use it to clear ODs
This sounds like its in effect high cost debt but with no real plan to pay it off.
Although thats going to impact your cashflow as well.

I come back to your biggest issue is short term cashflow and thats hard to really get out of. But the best approach remains to increase income if you can. and specifically use it to clear the highest debts down as quickly as possible.

Of everything you have said my biggest worry is whats the real plan for your wife to return to work. What are you going to do with the child, are grandparents going to help etc

As most people who have been though the early years nursery system will tell you it costs a fortune. Its worse than another mortgage for most people.

You need to look at the Lidl thing again. I shop a little in the discounters, they are not necessarily cheaper. Some things much, some things better quality for the same price, some things cost more. For most people if they move from one of the large supermarkets to a discounter they will see a drop. But there are other ways to still reduce more. Eg when did you last see a buy one get one free in Lidl/Aldi. These are often loss leaders, and can bring decent brands below the cost of own label, they want to get you hooked on theirs, but if you can be strong you just use them and move on.

What do you feel about coupons, there are actually lots of sites to get them and that track them, and depending how busy you are it can be a bit of a laugh to try to beat someone else to find the money off. So what can you buy for literally a few pence.
I get emailed every so often vouchers for one of the tuna brands from years ago, they end up costing less than all the own brand tunas. But occasionally they will send me one, and when I go to tesco I find its also 3 for 2, or BOGOF etc. It can get silly cheap at that point. There are people that do this all the time, its called extreme couponing, you can often get things nigh on free if you can be bothered to do it.

Do you have a garden? Are you green fingered at all. Its actually quiet easy to grow some stuff, its also quite fun as well. Plus you get yourself some really fresh veg/fruit and you can use that as the base for some of the baby food.
some things are really so easy to grow, raddish for example. Potatoes can be grown in bags (its actually easier) just plant a spud in half a bag of peat, it should sprout, once the top grows back tip the bag out. Is there any potential in this area for you?
 
Joined
4 Aug 2007
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21,386
Location
Wilds of suffolk
I assume the OD fees are something like £2 per day of overdraft, capped at £50 per month. I know Halifax operate like that.

yeah thats my assumption as well, so as the OD drops, the fee stays the same. But in effect the APR keeps going up. So it could be bad to for example slowly pay it off, may as well pay off other things until can clear ONE of the ODs.

Without the details its impossible to say how the OD(s) should be tackled.
 
Caporegime
Joined
21 Jun 2006
Posts
38,372
10.5% isn't bad if he compares to OD and credit card at 19%

take the loan and pay off credit card and OD.

also asking someone else to take out the loan for them. that is fraud is it not? it also leaves the other person in a horrible position. what if OP decides not to pay them back. they are then forced to pay the loan for them.

i know if someone asked me to take out a loan for them i would say no chance.
 
Soldato
Joined
25 Mar 2004
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15,686
Location
Fareham
10.5% isn't bad if he compares to OD and credit card at 19%

take the loan and pay off credit card and OD.

also asking someone else to take out the loan for them. that is fraud is it not? it also leaves the other person in a horrible position. what if OP decides not to pay them back. they are then forced to pay the loan for them.

i know if someone asked me to take out a loan for them i would say no chance.

They are accepting the risk of taking out the loan as you said, and it is a risk. I don't see a problem with doing it personally. I would not take one out for someone else lightly though.
 
Caporegime
Joined
21 Oct 2002
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26,251
Location
Here
Don't think he was offered a card with a high enough balance to make that an option.
If you have a good mate or family who are happy to help this could be an option in their name. Also means once their deal is ending you should be in a better place to take the balance back in your own name.

Relies on trust and self discipline though.
 
Soldato
Joined
9 Mar 2003
Posts
14,056
I'm really confused and some people haven't picked up yet, you said you have 2X £2k overdrafts from your uni days, from what I remember I had 1-3 years to pay off any overdraft before the fee's kicked in. Honestly it sounds harsh but it seems like you didn't have a real plan to pay this off. But you also said you had £4k savings and a £7k payout yet the £4k overdraft still exists? To be honest I am a little surprised that they lent on the house with such a debt outstanding and all of your loans/credit commitments, seems slightly irresponsible on their part (effectively you only had a £7k deposit as the rest was funded from debt you can't afford).

That being said, your debts are not 'large' just very costly and short term, your income is fairly reasonable. Even a relatively expensive loan to consolidate the overdraft and credit cards will give you a huge amount of cash to start paying down the next highest debt quicker. If that really isn't an option then you just need to concentrate on paying the highest down first. You should really be calling everyone you have to pay money to and negotiate discounts. I mean everyone, phones, TV's subscriptions, internet, loans, credit cards, some will do it, some won't anything is better than nothing. Cancel anything you can including the TV license. I suggest speaking to someone from the CAB or money advice service for some proper sit down advice where they can review all of your best properly.

There are some expenses you could potentially cut, £60 a week on food for two people is high for people without much cash. You could get that under £30 with proper planning, savvy buying and cooking food rather than eating ready made rubbish. You'll probably eat better at the same time.
 
Soldato
Joined
9 Mar 2003
Posts
14,056
It’s really not that hard, it’s all the ‘extras’ outside of core meals that boost the shopping bill, when you are literally one bill away from defaulting on a payment you really need to go to the extra effort to control spending. The expensive extras are also what tend to be the empty high calorie items e.g. chocolate, fizzy drinks, cake, squash, alcahol etc.

I should add that would be just food and not stuff like toilet roll and cleaning supplies as the OP said these are separate spend but again should be sticking to value products here.

There are so many staple meals where 4-8 portions can be made for under £5, you just need to put the effort in and cook them and not rely on chucking something in the oven for 20mins. The other thing is to make sure that the thing actually gets portioned correctly and put in the freezer, stick to in season food, it’s way cheaper. Cutting down on meat consumption will not only help with the cost, it is generally accepted that it is better for both you and the environment.
 
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