Want to become debt free

  • Thread starter Marcanthony
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Marcanthony

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Age: 37
Spouse’s/Partner's age: 33

Annual gross income from employment or profession: 37k
income of spouse: 26k

Type of employment: accounts

In general are you:
(a) spending more than you earn, or
(b) saving?
Spending more than we earn

Rough estimate of value of home 335K
Amount outstanding on your mortgage: 310K
What interest rate are you paying? tracker

Other borrowings – car loans/personal loans etc 39k

Do you pay off your full credit card balance each month? No in arrears
If not, what is the balance on your credit card? 10K

Savings and investments: none

Do you have a pension scheme? no

Do you own any investment or other property? no

Ages of children: 2

Life insurance: only mortgage protection €188


Car Loan 350pm (bal 17K approx)
Personal Loan 220pm (bal 8.5K approx)
Utilities 150pm
Childcare 300
Cars (petrol, tax, insurance) 200
Health insurance 0
TV/Internet 60pm
Food etc 400pm

Bascially,things are starting to get on top of us,bills are mounting and we seem to have very little pocket money each month.My salary covers the mortgage,car & personal loans and whatever i can afford each month off the credit cards.I have applied for new cards with 0% on balance transfers but was declined.I tried to get a new personal loan to consolidate all the debts but again was declined.So it's back to basics and the struggle goes on.My wife and recently found out we have a second baby on the way and the pressure is starting to mount,i don't want her getting into ill health with worry over our finances.
 
this may seem like heresy to some but would you consider selling the house and renting for a couple of years?
 
€188 per month for basic mortgage protection seems very high?

Have you stopped adding to your credit card debt?

I certainly wouldn't describe selling your home and renting as heresy, but the numbers would have to make real sense to do so.
 
Hi all,

Selling the house and renting is not an option,I don't know about going interest only for a while i might look into this.

The €188pm is life assurance and mortgage protection,sorry that was an error.I have looked into reducing this but i can't for the first 2 years so i can't do anything,except maybe cancel the policy and take out a new one.

I haven't used my credit card in months i pay as much as i can each month the bring it back on track,roughly about €250pm so it should be back within terms in 2 months time.

What is a moritorium on the mortgage? Is that a mortgage break?
 
A principal moratorium is bascially a deferment of principal repayments off the home loan so bascially your only paying interest.. so its interest only..... if your in the first couple of years of your home loan your majority payment will be interest only so it might only bring your repayments down by a couple hundred a month... still frees up cash tho....
Have you taught of maybe asking the bank for a top up on your morgtage to clear your personal loan and credit cards? (its a long shot, but they might give it to you)
it will cost you more in the long run but will free up the cash in the short term......
 
I did a bit of research online with regard to a top up on the mortgage but because our lender will only give 80% of the property value now i didn't do any more,just put it down as dead end street!

Do you think it might be worth while explaining things and seeing if they can increase it any way?

Thanks for the advice btw.
 
Explain your situation it is worth a try but my honest opinion dont expect to get a sympathetic lender on the end of the phone! if i were you i'd ring the bank you have the loan with and ask for a meeting with the lender/ financial adviser, go in prepared with your income & outgoings and see can they work anything out with you.......
if all else fails maybe look into selling your car, maybe buy a smaller one or if public transport is possible get rid of it all together use the sale proceeds to pay off some of your debt.
Your wife will obviously be going on maternity leave that will save on childcare so use that money sensibly.
Look into a long term personal loan maybe over 20 years, consolidate your car, persoal loans and credit cards (and cut them up!!!!!!) it will cost longer in the long run but will be less of a monthly repayment, and you can always pay lump sums off when you get back on your feet.
Try little things to save on money, use the internet on your lunch break get rid of that extra bill at home!
Shop around for groceries, try reduce that bill to 100 less a month.......

If you have no luck with your current bank, id go to a broker see can they do anything for you, they do all the work and check with all financial insitutions
 
I know the last thing you need at the moment is another bill every month. But with a young kid and another on the way, you should really do your best to get some health insurance.
 
My advice to you would be to go to MABS as they are professionals who can help you coordinate your finances and get in touch with your creditors to help consolidate your debt for you. That should be your first step. You need help in getting control of things again. I definitely think you should have health insurance also. Remember you have your health and with a baby on the way you don't need to be worrying over finances, get them sorted and stay on track. Good luck.;)
 
How about selling your car and buying a much cheaper one. The difference could knock a few grand off your loans.
 
i would love to sell my car and buy a much cheaper one to reduce my debt but i dont think thts an option.

basically bought the car a year ago for 17k. i reckon with iterest etc we probably still owe about that amount. even if we managed to find a buyer in this climate, the most we could hope for would be 10k. so say we buy a car for 5k that means only paying 5k of the loan so not gonna make a big diff.
 
I think you are paying too much for your life assurance costs. If you were to take out a dual convertible term policy for €410000 (covering the mortgage with an extra €100k to cover loss of wages ) for 25 years & based on non smoking rates would cost €80pm. Its certainly worth looking at all quotes on the market as you're lender is usually tied to one life company.


www.powerinsurances.ie
 
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