How can I solve my debt problems and get a mortgage?

I currently live in council accomodation with my husband and 3 children. We both work but cannot get a mortgage as we both have debt problems.





I desperately want to change our situation and get on the housing ladder but I need to solve my debt problems.





Any tips would be great.





I currently have a repayment plan but it is going so slowly at this rate I%26#039;ll be paying it off in 15 years time!

How can I solve my debt problems and get a mortgage?
HEre are the steps you need to take:





1) Start keeping track of where your money goes. Yes, this means starting a budget.





2) When you realize where your money is going, find ways to shave costs. Look for way sof consolidating costs if you can, like instead of having insurance on each individual debt, have one individual term policy. Or instead of dealing with seperate people for cable, internet and phone, see if you can switch somewhere and get some bundle discounts. Also, assess your spending into things that are manditory and things that are not manditory. Manditory things are the basics for living. Power, water, shelter, food (not steak and lobster every night either), clothing (within moderation). Stuff like entertainment, cable TV, internet are all things that are not manditory. All non manditory things get split into 2 catagories %26quot;life enhancing%26quot; and %26quot; non-life enhancing%26quot; Life enhancing things would be things like internet...makes things more convenient. Life enhancing things might be going out for A beer and wings with your buddies once a month. Non-life enhancing things would be things like Sataleite TV with 600 channels...even anything more than basic cable isn%26#039;t nessasary, there are better uses of your time. The goal is to eliminate ALL non-life enhancing expenses.





3) once you%26#039;ve freed up some cashflow we get cracking on the debts. Let%26#039;s say you were able to get rid of $200 of expenses that you didn%26#039;t need. Take that $200 and apply it to the payment amount for your smallest debt amount (these are ussually the credit cards or things with the highest interest rate as well). for example, if your smallest debt was a $2000 credit card with monthly payments of $50. Now you will be paying $250 a month to pay it off.





Once that first debt is paid off, take the entire amount you were paying (in the example, the $250) and apply it to the paymnets you are currently making on the next smallest debt. Let%26#039;s say that%26#039;s a loan for $5000 and the payments are $300/month. Now you are paying $550/month on that one. As you can guess by making almost double the payments, you will get this paid off far sooner.





When that one is paid off, take the entire amount and apply it to the nest debt. Let%26#039;s say it%26#039;s another loan for $8000 with payments of $400. Now your payments will be $950 (the previous $550, plus the $400), so this will get cleared up in less than a year, rather than the 5 or 6.





Continue doing this until you%26#039;ve cleared up ALL your debts. When they are all cleared up, you will be used to making those regular payments so you might as well put the money into a savings account, or put it towards a mortgage payment.





This snowball repayment plan will rapidly increase the amount of time it takes to pay down your debts and it will also give you a sense of accomplishment becuase you are picking off debts along the way, rather than scattering payments and not seeing debts going away. This strategy is promoted my most financial professsionals like Richard Kiyosaki (author of Rich Dad, Poor Dad series), Dave Ramsey (don%26#039;t waste you money on the book, you just got the jist of it), and credit consultation companies all over the world.
Reply:I%26#039;m about to embark upon a DMP with the CCCS. It will take me 9 years to clear my debts and then it will stay on my credit score for a further 6 years. It does seem so long away and I too would like to buy a house one day. I am considering applying for an IVA. These last 5 years and you get a lot of your debt written off and it only stays on your record for 6 years - start to finish.


Have you considered an IVA or bankruptcy? They may seem extreme, especially in the short term but after 6 years you are completely free of debt with it off your credit record.


Also, my debt advisor at the CCCS said even if you have old bad debts on your credit score you can in time find a lender, although most likely at a higher rate than others.


I suggest you call the CCCS (Consumer credit counselling service) which is a charitibale organisation. They will advise you.


Good luck, and I know its hard but try to remember that money isn%26#039;t everything - you have a husband and children - that%26#039;s priceless. It will work out in time :-)
Reply:I started in the same place you are in and am still working to get out. I didn%26#039;t start making any headway until I started doing a written budget. It can be very simple to put one together. Mine are on paper for the most part.





Outline your expenses on a sheet of paper. Estimate what you will need to spend each month for things like food, clothes, utilities, and even a little fun money.





Subtract these expenses from what your income for one month is. If there is money left put it on an expense, maybe extra principle payment. If you wind up spending more than your monthly income in a given month you may need to cut back somewhere.





Start by putting as much money as you can on the smallest debt until it is paid off. Once it is paid off roll the entire payment amount over to the next debt and keep going. Beware though, with some lenders you have to tell them explicitly in writing what to do with the extra funds you are sending them. Otherwise they will assume you want to pay the interest which won%26#039;t help you get out of debt any sooner. Tell them you want all excess funds applied to the principle of the loan.





If you go to http://www.cashinfull.com you can find some budgeting sheets and other advise on making a budget/cash flow plan work.
Reply:Hi Missy C





The suggestions of building a budget planner are very good and do work. With regards to your existing debt, depending on what it is, you may be able to have a lot of it written off under government rules. I know someone who tried this and had a huge chunk of her debts cleared which left her a LOT better off. She managed to get a mortgage after too with a specialist lender. Call 01245 350749 and ask for Richard. Tell him Andy recommended you.


Good luck
Reply:Get an appointment with Citizens Advice,





The Citizens Advice service helps people resolve their legal, money and other problems by providing free, independent and confidential advice, and by influencing policymakers.





They helped my sister clear £20,000 of credit card debt.


It did take a while though.





Good Luck to you and your family.






Reply:Hi Missy C,





The first I did was cut off my credit cards in half; now I pay everything in cash or with my debt card. Not too long ago I was overwhelmed with my debt too and after extensive research I found a company that was the answer to my problem (neither bankruptcy nor debt consolidation). Call Shane Massey at (888) 562-9952 x 718, he is a debt specialist, I’m confident he will be able to help you. Tell him Jonia recommended you. Take care!



Reply:I suggest you read Dave Ramsey%26#039;s The Total Money Makeover. It sounds like you aren%26#039;t American but his advice is good solid advice no matter what your nationality is. He lays out a plan on how to do a budget and why you need to do a new budget each and every month. He also details out how to save, etc.
Reply:I agree with Matt.





Making a budget and writing down your income and outgoings is the best place to start. You can then see what you%26#039;re spending too much on and start to chip away at the things you don%26#039;t need.





I use http://www.budget-planner.co.uk - It%26#039;s free and I can access it from work or at home.
Reply:


first,you should collect some resource by searching the relevant keyword in search engine,if you got good luck there ,then your problem solved.however,if you are not able to find the ideal answer by doing that,here http://www.DebtFreetips.info/debt-free.h... is the resource i recommend.



Reply:You need to get your credit card and personal loan agreements checked. If they are unenforceable you will not have to make any more payments so saving you a lot of outgoings.
Reply:You can look into various non-profit debt consolidation/elimination programs that you can read about here: http://gettingthroughdebt.blogspot.com
Reply:GET A HSBC WORLD BANK ACCOUNT


GET YOUR HOUSE LOAN WITH THEM


WORLD BANKING JUST TOOK OVER WITH OBAMA VICTORY
Reply:make a pie chart and start cutting off expenses spent on miscellaneous items and wants