Financial advice needed

H

higs

Guest
Age 28
Spouse’s/Partner's age: 28

Annual gross income from employment or profession: € 48000

Annual gross income spouse: € 32000

Type of employment: Both Public Sector employees

Expenditure pattern: Generally non savers

Rough estimate of value of home € 345,000

Mortgage on home € 269,000- paying for 16 months

Mortgage provider: EBS

Type of mortgage: Tracker, interest only, fixed rate -fixed 3 years

Interest rate 3.75%

Other borrowings – car loans/personal loans etc

Personal Loan Credit Union € 30,000

Personal Loan AIB € 13,000

Do you pay off your full credit card balance each month? No

Savings and investments: €5000 in credit union but tied up with loan

Do you have a pension scheme? Yes we both have

Do you own any investment or other property? No

Ages of children: 8 and 2

Life insurance: Yes

Net Monthly Income € 4400

Monthly Outgoings
Mortgage € 960

Credit Union €800

AIB €400

Creche € 600

Life and Car/House Insurance € 170

Health Insurance €220

Tv/Telephone/Broadband €160

Diesel/Tolls € 400

Food € 300

Misc €100

Other € 300 -€500


Hi all, my wife and I are both public servants,having moved into new house last year,got married this year.

Initially didn't take out enough of a mortgage,this is why I received the personal loan from the bank to finish the house.

We got married this year,hence the credit union loan.

The other refers to tradesmen and suppliers who are being paid the rest of money owed to them in monthly installments. I owe €4000 to these altogether,initially this was €12000.

I could seem to manage everything up until a couple of months ago,now its all getting on top of me.

There has been no money to pay tradesmen/suppliers the last 2 months,I just have not got it.

Christmas is coming and I dont think I have ever been this broke.

I was looking at my outgoings wondering where to cut back,the health insurance is expensive but have needed it on a few occasions during the year regards the kids so I think its worth it.

Diesel/Tolls is expensive but I do commute to work every day.

The Creche is top class and we have no inlaws to try and involve as they are in poor health.

The Tv/Phone/broadband is expensive,i'm in contracts up until the middle of next year so don't know whether i can break them or not.

I have approached both AIB and Credit Union asking them to extend the term of loans to maybe start the five year term again but both said no as I was making repayments.

I was thinking of approaching the EBS to maybe take a payment break for 6 months to get my head above water,but don't know much about them offering it to people who are making payments on time.

Just need advice regards what to do,i am making payments but just about at the moment. The whole thing has me stressed out and I don't really know which way to turn.

Thanks in advance
 
Think you have a short term problem but should be fine in medium term as you both have secure jobs and debt is not too high. Can you cut back in the "other" amount. 300-500 euro is a lot. I assume this is for weddings, unexpected medical bills etc?

Are you sure your house has that much equity if it was bought 16 months ago?
 
Is there a possibility of using public transport for a few months that would be cheaper than your diesel and toll costs.
Your tied in to the tv/broadband/phone I'd say but have shopped around for when the contract is over so you know what you want and get best deal.
What's the balance on the credit card and what repayments are you making.
I would try the CU again. Explain to them that while you can pay now it's putting serious pressure on you and by expanding will ensure you don't go into arrears. Also just make repayments on loans don't pay into shares to for a while.

No harm in approaching the bank. You can always ask for the payment break.
 
How about asking your mortgage provider to increase your mortgage as you're well below 90%. I assume with 2 guaranteed jobs that this shouldn't be an issue. You then pay off the AIB and Credit union. I would see this as a far better option than getting a payment break. If you ask for the payment break it will look bad so don't do that yet. In any case there are hefty penalties for breaking a fixed rate. Why haven't you posted how much your credit card debt is? It's worrying that you got work done by tradesmen and are only paying them by instalment. Also the fact that you mention you are not savers is not good. Is there a lifestlyle choice built into your debt that needs to be tackled. On the plus side, your salaries mean you can get out of the current situation, it's the same for all us who started out married life with a mortgage and kids. The early years are the hardiest. Face the pain now that's what you've got to do and it will get better. You shouldn't do the remortgage (consolidation) if your debt was built up due to life style choices that you have not curbed.
 
we did a self build on the house,the valuer from the bank put that value on the house before we got our final draw down on the mortgage
i'm not sure if that value still stands because that value was put on 9 months ago.

The 'other' refers to paying tradesmen and suppliers that amount each month.
I have not been able to meet these for the last two months and they have been getting impatient.
Just telling them that they will have to wait for a couple of months doen't go down too well.


With regards the public transport to work this would be difficult as I do shift work,starting early and finishing late and have a long commute to work every day.

I don't have money to meet the unexpected child/car costs that prop up from time to time.

The short term debt seems to be crippling the finances.
Forgot to put into opening post I have a credit card debt of €1500 paying maybe €100-€150 per month off this.

Is there an option there for consolidating debts into one payment ie remortgage?
What is the max LTV offered by banks at the moment for remortgaging?
Or do they even do remortgages in todays climate?

Thanks for your replies
 
higs said:
The 'other' refers to paying tradesmen and suppliers that amount each month.
I have not been able to meet these for the last two months and they have been getting impatient.
Just telling them that they will have to wait for a couple of months doen't go down too well.
Click to expand...

Personally I'd pay them before anything else. I've more to say about that but as you're a first time poster I'll refrain.

If you meet the banks criteria they may allow you to consolidate. It will be based on your house valuation, your job situation and also how you came about having so much personal debt.
 
First supplier owed €1200 (has received around €25000 so far)

Second supplier owed €400 (has received over €3600

Third supplier owed €1000 (has received above €7000)

First tradesman owed €300 (has received over €30,000 waiting for him to come back and finish one small job)

Second tradesman owed €1100 (has received over €18000)

I'm not in the habit of not paying for goods/services so I have been paying these.
I just have not been able to meet them the last 2 months
that is why I posted here, i'm not looking to renage on paying people.

I contacted each person owed and explained that money was not there before house finished and they agreed on doing work/supplying goods for monthly payment.

The two short term debts were used for finishing house-walls/gates,kerbing driveway,lawns,and wedding so nothing lavish like new cars,foreign holidays etc.

Thanks for your advice, I checked my mortgage lenders website and I think the most LTV available is 80% which would not cover the debts based on the value of the house,but do other lenders offer more?
 
Thanks for your advice, I checked my mortgage lenders website and I think the most LTV available is 80% which would not cover the debts based on the value of the house,but do other lenders offer more

Other lenders might give a higher LTV rate but most have recently announced that they are not taking on any switchers.
Remember this is the rate offered for new business - it could be that if you approach your bank they might offer you a better LTV rate than the one published, as you have an existing relationship with them.
Overall, I think if you can "tough it out" you would be better off paying the personal loans off rather than consolidating them into the mortgage, it's MUCH cheaper in the long run. But of course if it's absolutely needed - do it.

Dont worry too much about this - you are both young, have a good income and have secure jobs. Work together and you will get through it.

Best of luck
 
Bronte said:
Personally I'd pay [the tradesmen] before anything else. I've more to say about that but as you're a first time poster I'll refrain.
Click to expand...

Personally, I'd pay the banks first and put the tradesmen to the back of the queue. Tradesmen don't affect your credit rating - if you don't pay the banks so that you can pay the tradesmen, you'll do near permanent damage to your credit rating.
 
RIAD_BSC said:
Personally, I'd pay the banks first and put the tradesmen to the back of the queue. Tradesmen don't affect your credit rating - if you don't pay the banks so that you can pay the tradesmen, you'll do near permanent damage to your credit rating.
Click to expand...

That's true, but OP has now explained it and he didn't order the work and not pay but instead negotiated in advance with the tradesmen who agreed to take the money by installment which is a perfectly solution to getting work done.

My coment was in that context and also based on the OP's original post which stated that the loan of 30K from the credit union was for a wedding but that has also been clarified.
 
higs said:
I checked my mortgage lenders website and I think the most LTV available is 80% which would not cover the debts based on the value of the house
Click to expand...

First step is with your own lender. You have good jobs so they may be open to 90% if you explain it properly.
 
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