# Too old, too many loans



## Elphaba (22 Jul 2008)

Age: 46
Partners age: 53
Joint Gross income: 45k
Type of employment: Self employed
Expenditure pattern: Never seem to have enough money, spend more than we earn.

Rough Estimate value of home: 450k
Amount outstanding: 35k  
Term remaining, told 27 months today by phone
Interest rate: 6.10% variable standard rate First Active
Monthly repayment: 290

Other Borrowings: 
60k commercial mortgage, First Active, 13 years left.
Monthly repayment: 600

Car loan, First Active 6k - 2 years left
Monthly repayment: 250

Top up loan, First Active - 24,500, (rang today told 13 years remaining.)
Monthly repayment: 220

Credit card: 6k ouch. Can just about make minimum payments.

Savings: 1k in Tullow oil

Pension: Yes, in property see below

Investment property: 150k - pension (60k left to pay, commercial mtge)

Ages of children: Young adults, 21 & 17.

Life insurance: Standard mortgage protection policy.

Other outgoings, usual stuff, basic sky tv package, home phone, 
no other major outgoings, apart from when car breaks down,etc

QUESTION: 
Our salary has dropped a lot in last year, due to weak UK sales and also weak pound. We have always profited out of sterling in the past. Have had to get use to a drop in income, so struggling. Our loans seem all over the place. 

We need to borrow €5k for daughter's last year in college. We are also thinking of borrowing €6k to clear credit card, which I cant shift, no matter how hard I try. 

My teenagers have part time jobs so they do contribute. I hope to consilidate First Active loans, and borrow €12k.

Appreciate any advice, thank you


----------



## adox (22 Jul 2008)

I`m sure others with more knowledge than me will give you advice but one thing I would say with confidence is take out a loan to clear your credit card.
As it is, its probably the most expensive way to borrow money.


----------



## ACA (22 Jul 2008)

6.1% for you mortgage seems VERY expense when you consider your LTV. (My home is worth approx €350k with €150k left to pay and I'm on a fixed rate of 4.99%)

Bit confused by the amount you say is charged a month tho - €290 with 27 months left only comes to €7830 but you say that you owe €35k.

Maybe your provider has become a bit complacent as you appear to have all your borrowings with them. Is it possible that if they thought that you were considering remortgaging elsewhere, they might offer a better deal?

As per adox, getting shot of the cc is the best way to go - maybe look to go to another provider who's doing free balance transfers...then if you can pay off as much as you can, after the free time is up, move again.


----------



## agapanthus (22 Jul 2008)

I would check again the term outstanding on your mortgage, if you top up has 13 yrs left then I would be inclined to think so has your mortgage.  The mortgage cannot run out before the top up, perhaps you extended the term of the original mtg in order to do the top up?


----------



## Elphaba (22 Jul 2008)

Thanks, yes I will do, I thought it didn't sound right either when I rang them. Ive been so busy running business, I haven't kept an eye on mortgage repayments. I understand LTV, but we also have a commercial
mortgage, with a higher interest rate Im sure. I think I will shop around before I approach First Active. Theres definately a better way to restructure these loans, possibly over 10 years


----------



## ClubMan (22 Jul 2008)

What is the investment property? A rental property or something else like a commercial unit? Is it viable? If not then perhaps you should sell it? What capital appreciation are you looking at to date and projecting into the future? What sort of rental yield are you looking at? You may consider it your pension but if it is not viable then you need to look at alternatives.


----------



## Elphaba (22 Jul 2008)

Cant sell it, its our place of business. It is viable, small ind. units in short supply. Likely to be worth 200k or more in 10 years when we retire. Bought in 2002 for 45k (pounds) at the height of celtic tiger, when biz was booming, not so booming now...


----------



## ClubMan (23 Jul 2008)

Elphaba said:


> Cant sell it, its our place of business. It is viable, small ind. units in short supply. Likely to be worth 200k or more in 10 years when we retire.


Are you sure? Think objectively and crunch the numbers to verify this.

I don't know about commercial units but on rental/investment properties there are good reasons for going interest only rather than annuity/repayment (capital plus interest) on the mortgage. Maybe that would be relevant here too?

As mentioned above you need to see if you can get a better deal on your mortgages and other significant debts. 

You may also need to cut your business and personal cloth to meet your (new/leaner) measure. For example addressing the spending habits which led to you running up €6K in _CC _debt. The usual spending diary and budgeting stuff covered in detail elsewhere.

Ultimately this, it seems to me, is your problem:


> spend more than we earn.


----------



## Complainer (4 Aug 2008)

45k gross for 2 people is pretty low. Given the downturn in the business, perhaps one or other of you could get an outside job, while the other runs the business?


----------



## Elphaba (19 Aug 2008)

Yes, has come down a lot over the last 2 years. I have more time on my hands to pursue other areas of work that I have long wanted to do, that will generate more income. We were going to consolidate, but we were refused because of arrears on our mortgage, (which Im sorting) This was a blessing in disguise, as it has forced us into taking action. (Applying for an innovation grant for biz is one) When I think of the way Ive managed money in the past, borrowing etc. Ive now set up a savings account, which I should have been doing all along. I'm glad the days of easy credit are gone. Our home is valued at about 500k, our other property 150k, our debts 146k, we could be a lot worse off. This forum has been a great help, particularly the snowballing your debts thread, paying small amounts each week does give you a psychological boost.


----------



## dmos87 (20 Mar 2010)

Elphaba,

I understand wanting to facilitate your child's education but as you mentioned your children work part time and contribute. €5K is a lot of money, would you not perhaps ask your adult child to get a student loan and use the contributions they supply to you to pay off the loan?

Interest rate is v.low on student loans and in theory your child is giving you money to get money back for education. There are a lot of college students managing and of course you could act as a Guarantor for the loan so if they default you will know about it.

This might relieve some stress from you and your partner.


----------



## ajapale (20 Mar 2010)

Hi Dmos,

You do realise that this thread is over one and a half years old?

What are the rates for student loans these days?

aj


----------



## dmos87 (20 Mar 2010)

How on earth did I come accross this? Still not used to the searches on this website, I thought this was new!! Not sure myself as I havent had to apply for one recently, but my sister did mention that hers are v. managable and it is variable too.


----------



## Elphaba (21 Mar 2010)

Shocked to come across this old post of mine. Pleased to say got our finances in order, have had various part time jobs in addition to running business. I could write a book on my experiences. It is a relief our c.card debt is with a collection agency, no interest. I've discovered its not the end of the world when this happens contrary to a lot of opinions on this forum.The student in question is financially independent (has a job & saving) and is off to study in the u.k. in sept.


----------



## PaddyBloggit (21 Mar 2010)

well done Elphaba ... nice to hear of a happy ending


----------



## Firefly (26 Mar 2010)

Elphaba said:


> I could write a book on my experiences.


 
Whatever about a book - could you post a few pointers/bullet points on your experiences which may help others?


----------



## MaryBe (26 Mar 2010)

PaddyBloggit said:


> well done Elphaba ... nice to hear of a happy ending


 +1  Always great to hear the outcome on the threads on AAM.  Well done Elphaba.


----------



## Elphaba (27 Mar 2010)

PaddyBloggit said:


> well done Elphaba ... nice to hear of a happy ending



Thanks. It hasn't been easy as we nearly lost our business, still ticking over though and we reduced our overheads.
I worked on checkouts in a local supermarket before xmas to earn extra money. I was shocked at how rude customers can be. Had great fun with the other girls working there. My contract expired on xmas eve and I was sad leaving. I was a great source of gossip at the time. We had a great xmas though! Business has picked up a bit, but I now work part time as a music teacher as well, which keeps the wolf from the door. At one point the wolf was on our kitchen table eating our dinner.
I really think getting into debt is a long process, you go through a period of denial, shame, guilt and then anger and then you face up to it and deal with it. Bottom line was we needed more money as Clubman (God be good to him) pointed out. He was right although it was difficult to face up to then. 
Even though I'll be years paying back my c.card debt, we are managing. 
I now have more good days than bad days.


----------

