Irresponsible lenders

[Deleted]

Hi all

I've just had the worst week of my life, culminating in a complete emotional meltdown yesterday. Fortunately, I have been able to partially retrieve the situation and I hope things will be back to normal soon.

As you know from my "cheerio" thread, we were supposed to be having some building work done. I arranged a further advance of £60000 to get the work done and to pay off some other borrowings.

The building society was more than happy to give up the money, which effectively doubled our mortgage. They even said that we could have borrowed up to £92000, rather than just a further £60000

Anyway, I don't know where or when I lost my common sense and agreed to take the money and get the work done but to be honest, I had misgivings right from the start. When I worked out the sums, we simply wouldn't have had enough money to live on. Not by a bloody long way.

I've managed to pull the plug on the builders (who were not happy but who have agreed to refund most of the money I paid them in advance, thankfully) and I have regained my sanity (vaguely).

What is most upsetting is that the building society were quite happy for us to plunge ourselves deeply into debt to get this work done and they never really offered us any advice or assistance in planning our finances apart from the usual "your home may be at risk if you fail to keep up the mortgage payments". Is it any wonder this country has huge debt problems (£3trillion of personal debt in this country) when lenders are willing to chuck money at you without any thought as to how you are supposed to pay the bloody thing back.

Fortunately, doing the job I do, I am pretty good with figures and when I sat down and worked it out properly, I was able to see that it was a completely wrong move for us at this time. I'm hoping to pay most of the money back to the B.S. sometime this week (as soon as I have the balance back from the builders) and then, hopefully, I'll be able to sleep at night !

Sorry, I just needed to let off a bit of steam.

FA x

[Jasmine]

Thank goodness you took the time to really look at what it was going to cost FA. I have to be honest but I glaze over when maths is involved (something left over from school and maths lessons ) and leave OH to deal with all that sort of thing. You are right about banks and building societies throwing money at folk - you've only got to look at the amount of unsolicited credit card forms that come through the door.
It must have been worrying you sick - sleep well!
Jxx

[Biggles]

FA--Just awell you have your head screwed on the right way and can work out figures. It just goes to show how some people can get into huge trouble especially if they are not very good at Maths. The Lenders are quick to give credit with no thought of how it can be repaid.
Harping back to "Years ago"--- Credit was very hard to get--even an overdraft from the Bank was impossible--we managed (but only just) Everything we got had to be Saved for--
Extending the Mortgage for an extention was not easy--we had to fill in a Form and prove with wage slips etc. Your Savings Bank(if you had one) that it could be repaid without hardship---
Even paying off a Minimum amount each month takes years -and think of the Interest that is charged!.
I feel so sorry for the Younger ones who can be tempted-into huge debt and re-payments with huge interest repayments-I know I would have been if I could have got credit then.
Having said all that--Andy I am sorry your plans are on hold at the moment and you are deeply disappointed-but you will have peace of mind--that you have escaped the Debt Trap.-
-Bigs

[Deleted]

Thanks Jasmine

Put it this way - I've lost a stone in weight this week through not being able to eat because of the stress and I've had less sleep in a week than I usually get in a night or two (and I only usually sleep 6 hours or so a night)

(Not quite so) FA x

[grannyjanny]

Hi Andy. Hope you have a better week next week. Piece of mind is priceless. Hope you feel better soon.
Janet.

[nightowl]

Oh FA, thank heavens you came to your senses just in time!!! . I'm surprised that The Voice of Reason let it get that far!!!

Yes, money is far too easy to borrow, specially when your home is put at risk! Nearly every spam email and letter through the door tells you that a pile of dosh is waiting for you somewhere!

[Plocket]

Thank goodness you worked everything out BEFORE you got yourself in to such financial difficulties FA. It's a disgrace that these financial instutions are allowed to almost pull the wool over our eyes.

[Weeterrier]

Banking is not as much of a 'service' as it once was. Now it is a business looking for big profits for its shareholders and wagepackets for its hierarchy. They want you to be in debt, so that you can pay them interest. They don't want customers like myself because I have no borrowings and no overdraft.
But this is not a criticism of you Andy. I grew up when it was still possible to save up for things, and also, I have been downsizing for years, so haven't needed to find money from anywhere.
I worry about families like yours. Everything is so expensive that borrowing is, in most cases, a necessity.
Nothing chews away at the soul quite as much as debt.

[blodau]

What worries me are the number of adverts on television encouraging people to take out loans. You can even take out a loan to pay off your other loans.

There's even one at the moment for an equity release type arrangement where one of the suggested reasons you might want to do this is to pay for a holiday. The advert cheerfully explains that the company will rent your house back to you for 10 years. What happens at the end of the 10 years?

Maybe we need more of those programmes that Alvin someone used to do on managing money. He seemed to have a very down to earth approach. We need more of that to counter the adverts encouraging us to borrow.

Glad to hear you're feeling a bit more relaxed now FA. It's a minefield out there.

Blod

[Barbara]

cant you buy a house thats bigger but needs work, its what we did, only nearly straight with jobs, but when you own your house its never ending any-way. and we only do it when we can afford to
but i'm glad you got out in time

[farmersboy]

Jul 7, 2008 10:23:50 GMT Weeterrier said:

Banking is not as much of a 'service' as it once was. Now it is a business looking for big profits for its shareholders and wagepackets for its hierarchy. They want you to be in debt, so that you can pay them interest. They don't want customers like myself because I have no borrowings and no overdraft.
But this is not a criticism of you Andy. I grew up when it was still possible to save up for things, and also, I have been downsizing for years, so haven't needed to find money from anywhere.
I worry about families like yours. Everything is so expensive that borrowing is, in most cases, a necessity.
Nothing chews away at the soul quite as much as debt.

Me and you both Weet,no borrowings or overdraft,never been in debt,i was brought up in an age where you never bought anything until you had saved up enough money for it,you cant go blaming banks,they are only trying to make money,thats their job,it stands to reason that if you borrow hundreds of thousands of pounds,it will cost a lot more to pay it back,its up to the individual to stay out of debt.

[prodigal gardener]

Once bitten twice shy - thats me. Still smarting from the stinging I got with credit cards. I will NEVER have another as long as I live. If we cant afford it we manage without. Debt can destroy lives I know I have lived through it and learn't the bloody hard way. Think VERY carefully before any type of borrowing, circumstances can change so easily and you find yourself up sh1t creek without a paddle. Thats when the banks show their true intentions and you are left to struggle There speaks the voice of bitter experience

[Plocket]

I personally think people need to be educated better where money is concerned - you can't use a credit card to pay off a credit card type thing. Credit cards are a good idea if you can pay it off each month, but if you can't then there's no point having one at all.

I had a friend who had a store card, and she'd pay it off with her credit card, and then she got a loan to pay off the credit card, but the loan was big so she decided to have a holiday as well. She got into SERIOUS difficulties because she didn't think of the future or the consequences. She was about £20,000 in debt eventually, and quite honestly she didn't need any of the stuff she bought.

Luckily FA you are canny with figures and were able to realise that you were going to be in serious trouble if you went ahead with the loan. It's a great shame you aren't going to get your extension done, but at least you won't be out on the streets in a few years time because you can't pay back the loan.

[farmersboy]

Jul 7, 2008 17:33:44 GMT prodigal gardener said:

Once bitten twice shy - thats me. Still smarting from the stinging I got with credit cards. I will NEVER have another as long as I live. If we cant afford it we manage without. Debt can destroy lives I know I have lived through it and learn't the bloody hard way. Think VERY carefully before any type of borrowing, circumstances can change so easily and you find yourself up sh1t creek without a paddle. Thats when the banks show their true intentions and you are left to struggle There speaks the voice of bitter experience

You are a very wise young lady,KL

[prodigal gardener]

I am now FB

[Weeterrier]

She certainly is.

[Deleted]

I'm so glad that things have turned out for the best with you FA, debt is such a destroyer.

My step son is 23 and went mad with all the credit cards and loans he as OFFERED a few years ago, then he had to go on the sick for 5 months, his employer only paid him SSP and non of the lenders insisted he took out insurance, so for the last 2 years his life has been made a misery by money worries, and ours too, being hassled on the phone by sarcastic rude debt chasers because he once gave out our telephone number, despite telling them countless times he does not live here.

While not making it the responsibilities of schools, I think our youngsters need some basic advice/education on money before they can get into debt. Some parents cant give this advice cos they dont know it themselves, and banks need to be reined in from sending out credit card applications as 18th birhday pressies.

[Deleted]

Thank you all for your support at what has been an extremely difficult time. I know I have done the right thing for my family but Mrs FA currently hates me for having pulled the plug at such a late stage. I know how desperately she wanted the extensions - I did too - and that is part of why I went along with it, because I didn't want to have to say no to her and upset her, but I know that with the recession starting to bite, food and fuel prices on the increase and a potential office move happening in the next 6 months (possibly up to a year), I would not have been able to sleep at night for the worry of it. I've had debt problems in the past and I well remember going to the cash point, trying to take £10 out and having the message "sorry there are not enough funds in your account to cover this transaction" flash up on the screen. It's heartbreaking and soul destroying to be in such serious financial strife and I'd rather she was angry with me for a while but sees that I'm right eventually than go along with it to keep the peace and end up arguing over money the whole time and possibly losing our home.

To help ease the pain a little, I intend taking her away for a pamper weekend and booking a reasonable holiday next year (I fancy camping in France for a fortnight), which will we hopefully be able to do now that we are not having the work done.

I know I've been an idiot but I'd rather be an idiot than in serious debt.

FA x

[Biggles]

You are Not an idiot just very sensible-I only wish I could have helped you.
Peace of mind is much better than worry-and I am sure your dear OH will understand after the disappointment eases--Bigs

[beanie]

I'm sure your wife will agree when she cools down that it's better to have your health and peace of mind than a few more bricks and mortar.
with house prices falling, if you have to move because of work you may have fallen into the negative equity trap with all the problems that would bring. hubby recently couldn't have a credit card renewed because he didn't spend enough on it, you think he would be rewarded for being a sensible user. THE WORLDS GOING MAD

[nightowl]

The world's GONE mad Beanie - see Lunatic thread

[Susie Snowdrop]

FA, YOU ARE NOT AN IDIOT! You have most certainly done the right thing just in time. These bloody lenders are too quick to give you money without a second thought . We've been offered ridiculous amounts of money on loan and it's bloody obvious that we couldn't pay it back!

Mrs FA will see things clearly in a few days time when she realises all of the things she couldn't do if the work had gone ahead. I'm sure you can all cope with your surroundings for a while longer until the time is right.

Get that holiday booked and have something positive to look forward to. You deserve it!

S x

[blodau]

It's never very easy when we end up not doing something we'd really wanted to do and we usually take it out on our nearest and dearest. Lovely idea of yours to take Mrs FA away.

Unfortunately the whole area of personal finance is a bit of a nightmare at the moment. In fairness to the banks and building societies, some of the bigger ones are trying to develop more responsible policies. They have also been talking about sharing information which would help stop people taking out multiple loans when they couldn't afford to do so. But this is a minefiled for them in terms of data protection. And, of course, people lie to them. Not everyone is as sensible as FA and steps back when they realise they're getting in too deep. And one man's sensible enquiries about affordability would be another man's interference in private life.

Before I get shot though, I do agree that there is a need for more help with financial awareness.

Go and enjoy your holiday FA safe in the knowledge that you'll live to fight another day (hopefully not with Mrs FA!)

Blod

[Plocket]

FA you are NOT an idiot, and deep down you know it. Mrs FA might be a tad put out at the moment but she will eventually realise that you have done the sensible thing.

A weekend away is a lovely idea - just pick one when it's sunny!!! ;D

[Tig]

Sorry to contradict everyone - FA you are an idiot! With your background you should have worked it all out in advance, what you were borrowing, what the repayments would be and what impact that would have on your finances!! I am sorry not to be sympathetic, but we should all know what our debt limit is, otherwise it is so easy to get sucked in when money is lent so freely! The bottom line when you can't repay is you lose all that you have!! Mrs FA would not be happy having no home and going to stay in council paid B & B when the debts had got out of hand

It may have been a difficult decision, but better late than never FA

Never mind the holidays - save up for what you want - owe no-one if you can x Tig

[farmersboy]

Jul 9, 2008 23:11:20 GMT Tig said:

Sorry to contradict everyone - FA you are an idiot! With your background you should have worked it all out in advance, what you were borrowing, what the repayments would be and what impact that would have on your finances!! I am sorry not to be sympathetic, but we should all know what our debt limit is, otherwise it is so easy to get sucked in when money is lent so freely! The bottom line when you can't repay is you lose all that you have!! Mrs FA would not be happy having no home and going to stay in council paid B & B when the debts had got out of hand

It may have been a difficult decision, but better late than never FA

Never mind the holidays - save up for what you want - owe no-one if you can x Tig

I agree with everything you say Tig,as i said in an earlier post,we should be in control of our finances,not go blameing banks for getting us into debt,if we cant offord it,dont get it.

[farmersboy]

Forgot to say,this thread could have been called,Irresponsible Borrowers

[Deleted]

You know what Tig & FB, you're both right.

I was an idiot to go into it without a thorough review of where we would be afterwards and I should never have done it in the first place. It's a sobering lesson for me. I'm usually so good at this sort of thing but I lost the plot on this one. I'm glad I realised my error before work started. It's better to call it off before they get going than to try and get them to stop half way through and then have to live with a building site.

I will be paying the bank back what I have left tomorrow and will then wait and see what the builder gives me back out of the money I paid him up front. I spoke to him today and he has incurred some expenditure on bricks - they've cancelled his order and refunded the cost of the materials but he is being charged a handling fee for them. I've agreed to pay that out of what I paid him up front (it's only fair, after all) and he has agreed to pay me back the rest when he knows how much the charges are.

My point about irresponsible lenders was that I borrowed only 2/3rds of what they were willing to lend me and can't even afford that, without any real discussion about whether or not we could afford the repayments. What would've happened if I'd just taken the lot ? They're willing to put people into serious financial difficulty to make a fast buck and some people are too reckless or stupid to worry about it until its too late. I think they should be forced to carry out a full review of borrowers circumstances and whether or not they can actually afford the payments before they hand out money.

The stupid thing is, all I've heard on the news this week is how difficult it is to get mortgages at the moment

Anyway, I hope it won't be too much longer before this is all sorted out. Thank you for being there to let me ramble on and thanks to Tig & FB for your comments.
FA x

[Jasmine]

I think the trouble is FA that if you have a house the banks and BS are more than happy to lend you money as they know they will get their money back regardless of what happens to the poor home owner.
You must feel like a weight has been lifted off your shoulders. At least you can rest easy now and hopefully soon it will all be over and behind you. Have you booked that holiday?
Jxx

[Deleted]

No, I haven't booked anything yet. I'm waiting until I know what my mortgage is going to be on a monthly basis and then I'll know what's what. I will only know that when I know how much the builder is going to give me back and I can then pass that onto the bank. I hope that by this time next week, I'll have some idea of how much all this is costing me and how much I'll have.

Cheers
FA x