Biggest debt you've been in?

Un Croissant · 09-09-2014 9:59am

12,000 Euro for college fees

UCDVet · 09-09-2014 10:00am

Biggest debt - my parents for sure.

I could give a flying feck for the people that own my mortgage. It's just business. If I don't pay, they can take the house and tell people I didn't pay. Fair enough. But let's not pretend like any bank ever did anyone a favour. It's just a calculated risk designed to maximize profits.

My parents - they sacrificed a lot for their kids. More so than a lot of parents do. And never asked for anything in return.

UCDVet · 09-09-2014 10:01am

Un Croissant wrote: »

12,000 Euro for college fees

Everyone on the internet keeps telling me college is free in Europe. What's up with this?

ronjo · 09-09-2014 10:41am

Barely There wrote: »

There's nothing unfortunate about it - the vast majority of people need to borrow money (or go into debt) in order to be able to buy a home.

Thats true but its not what I meant was unfortunate.

ulinbac · 09-09-2014 11:01am

bigroad wrote: »

Mortgage for the next 35 years already did 5 and that was 20k.Bummer.

This just amazes me. If you have to take a mortgage out over more then 20 years then how can people justify it? Surely, it is not affordable? It can't be worth it to be in debt for that long!

Not giving out about you bigroad, more a general question.

Maximus Alexander · 09-09-2014 11:03am

porsche959 wrote: »

Around €350,000, give or take.

http://www.independent.ie/business/irish/irish-debt-total-at-164-trillion-new-figures-29615178.html

Doesn't really count though since you can just leave the country and wait for everyone else to pay it before you come back.

o1s1n · 09-09-2014 11:12am

ulinbac wrote: »

This just amazes me. If you have to take a mortgage out over more then 20 years then how can people justify it? Surely, it is not affordable? It can't be worth it to be in debt for that long!

Not giving out about you bigroad, more a general question.

There are different variations to mortgages though. The term is not indicative as to whether someone 'can afford it' or not.

Someone could earn 50k and be paying €1500* amount over 25 years
Someone else could earn 50k and decide they'd rather pay €1250* over 30 years

Both people can afford the same property, they just chose to pay the mortgage off in different ways.

*figures plucked out of my head for illustrative purposes.

Maximus Alexander · 09-09-2014 11:14am

I must look at things in a warped way because my thinking is that if it's going to take me 25+ years to pay for something, I can't afford it.

Thargor · 09-09-2014 11:29am

Do most of the people in debt in this thread have no savings in their thirties then? Or do you get in debt but keep a savings regimen going on the side for rainy days etc?

Zubeneschamali · 09-09-2014 11:43am

Thargor wrote: »

Do most of the people in debt in this thread have no savings in their thirties then?

There's no point in having savings and credit card debt: you'd pay off the credit card first.

Once that's paid (and I don't mean the monthly minimum, I mean fully paid off zero interest payments) you'll have a savings plan: rainy day money, next car money, regular big bills, holidays, Christmas, and then put away money longer term for home improvements, college funds for the kids etc.

Mortgage debt you'll have it for 20-30 years, organize around it.

Personal loans/car finance/hire purchase is somewhere between the two: not as urgent to get paid as credit cards, but the sooner paid the better.

And don't forget your pension!

goldenhoarde · 09-09-2014 12:00pm

porsche959 wrote: »

Around €350,000, give or take.

http://www.independent.ie/business/irish/irish-debt-total-at-164-trillion-new-figures-29615178.html

Before reading this thread, I was in a manageable debt situation (mortgage) but with a rainy day fund and some savings but now that's gone(technically maybe not literally

) ! Darn internet Grrrr!!!!!!!!!!

Balmed Out · 09-09-2014 12:06pm

ulinbac wrote: »

This just amazes me. If you have to take a mortgage out over more then 20 years then how can people justify it? Surely, it is not affordable? It can't be worth it to be in debt for that long!

Not giving out about you bigroad, more a general question.

When I take out a mortgage itll be for as long a term as I can with the intention of paying it back in as short a time as I can. It doesnt cost any extra but gives you a safety net of if times become tougher being able to be pay less.

J Mysterio · 09-09-2014 12:30pm

€750 into my overdraft with a €1000 limit. That would be fine except my insurance has just paid out €1100 to a taxi driver i tipped (literally) last month.

Stressing on it now. The damage the taxi was literally a scratch and just needed some paint. He only claimed for €900 but they paid out more?

I had worse damage on my front bumper before and it cost €250 to repair. I told the insurance company it was a fraudulent claim but they ignored me.

I was made redundant in December but was only there for 1.5 years, so not long enough for a redundancy payment.

I get €185 a week on social welfare.

ulinbac · 09-09-2014 12:34pm

o1s1n wrote: »

There are different variations to mortgages though. The term is not indicative as to whether someone 'can afford it' or not.

Someone could earn 50k and be paying €1500* amount over 25 years
Someone else could earn 50k and decide they'd rather pay €1250* over 30 years

Both people can afford the same property, they just chose to pay the mortgage off in different ways.

*figures plucked out of my head for illustrative purposes.

But the additional interest over an additional time must be quite significant no? It must cost more over a longer period. The additional risk of something happening over a 5 year period e.g losing ones job, health issues etc. would cause greater risk when trying to pay off the mortgage. I still think anything above 20 years is crazy but each to their own.

Balmed Out wrote: »

When I take out a mortgage itll be for as long a term as I can with the intention of paying it back in as short a time as I can. It doesnt cost any extra but gives you a safety net of if times become tougher being able to be pay less.

I did a quick calculation on HSBC Mortgage calculator there.

Mortgage for £250k.

25 Years:
- £1767 p/m.
- Total Paid (incl. Interest) £530,100

30 Years:
- £1663 p/m.
- Total Paid (incl. Interest) £598,680

For a safety net of not paying an additional £104pm its costing you £68,500 in interest. If you get into trouble you can always restructure, so still believe the quicker you pay it off the better.

As far as I know in Ireland (correct if wrong), you cannot pay ad-hoc payments for the first X amount of years of the mortgage and additional payments can be subjects to charges.

bear1 · 09-09-2014 12:35pm

J Mysterio wrote: »

€750 into my overdraft with a €1000 limit. That would be fine except my insurance has just paid out €1100 to a taxi driver i tipped (literally) last month.

Stressing on it now. The damage the taxi was literally a scratch and just needed some paint. He only claimed for €900 but they paid out more?

I had worse damage on my front bumper before and it cost €250 to repair. I told the insurance company it was a fraudulent claim but they ignored me.

I was made redundant in December but was only there for 1.5 years, so not long enough for a redundancy payment.

I get €185 a week on social welfare.

The best advice I can give you is to go and talk to your bank manager.
They are a lot more accommodating than you would believe.
It is better to tackle this problem head on rather than piling everything up.
Just take a look at my post to see what I mean.
Unless you live out in the sticks then I would consider halting the insurance and tax for a while and declaring the car as SORN'd.
Or even better, sell it and use the proceeds to clear the debt.
Stay strong and you pull out of it but you need to start making the sacrifices.

Balmed Out · 09-09-2014 12:40pm

ulinbac wrote: »

I did a quick calculation on HSBC Mortgage calculator there.

Mortgage for £250k.

25 Years:
- £1767 p/m.
- Total Paid (incl. Interest) £530,100

30 Years:
- £1663 p/m.
- Total Paid (incl. Interest) £598,680

For a safety net of not paying an additional £104pm its costing you £68,500 in interest. If you get into trouble you can always restructure, so still believe the quicker you pay it off the better.

As far as I know in Ireland (correct if wrong), you cannot pay ad-hoc payments for the first X amount of years of the mortgage and additional payments can be subjects to charges.

Various mortgages have different rules but any ive inquired about going variable from the start its irrelevant. In your example if you took the 30 year mortgage and paid it back in 25 years (to the same schedule as the 25 year mortgage) you end up paying the same as someone who took out the 25 yr mortgage.

beks101 · 09-09-2014 1:00pm

Feck all debts, feck all investments either.
Live in London and hate the ridiculous rents, but as a newcomer I’m not settled enough to think about buying either.
Savings were wiped out by the move and recently buying a new car too.
Borrowing slightly scares me, despite its inevitability down the line.

FURET · 09-09-2014 1:06pm

My biggest debt was 15,000 euros for a Masters, long since cleared. Currently have zero debts of any description and have gone beyond the stage of having to borrow for anything other than a dwelling. However, I won't buy a house or apartment unless I have the cash.

People saying they paid 250k for their house isn't quite accurate if they're paying back a 25-year mortgage at 3% per annum. Do the math.

I don't understand people saying that a mortgage isn't a debt. Of course it is. You're paying back a loan with interest aren't you.

ytpe2r5bxkn0c1 · 09-09-2014 1:16pm

Grayson wrote: »

You said that if people were sensible they wouldn't be in debt. If you're talking about people living half a century ago, then it's hardly relevant.

We're still living you know!

o1s1n · 09-09-2014 1:20pm

ulinbac wrote: »

But the additional interest over an additional time must be quite significant no? It must cost more over a longer period. The additional risk of something happening over a 5 year period e.g losing ones job, health issues etc. would cause greater risk when trying to pay off the mortgage. I still think anything above 20 years is crazy but each to their own.
.

I don't disagree with you at all, I'm just saying that term of contract does not indicate whether someone can afford it or not. I'm not commenting on value for money/who pays more in the long run etc as I thought that would have been obvious given how mortgages work.

Person A wants to get it paid off quicker so they pay more.
Person B wants to have more disposable income each month, so they pay it over a longer length of time.

Both people could be on the same salary and have the same level of 'affordability' if you get me.

Legion. · 09-09-2014 1:25pm

Took out a 1500 loan yesterday so I could afford to go back to college (I'm 19).

Ihatecuddles · 09-09-2014 1:25pm

<2k before I got married.

Thankfully we're not in debt now, my husband has never been in debt!

Balmed Out · 09-09-2014 1:32pm

o1s1n wrote: »

I don't disagree with you at all, I'm just saying that term of contract does not indicate whether someone can afford it or not. I'm not commenting on value for money/who pays more in the long run etc as I thought that would have been obvious given how mortgages work.

Person A wants to get it paid off quicker so they pay more.
Person B wants to have more disposable income each month, so they pay it over a longer length of time.

Both people could be on the same salary and have the same level of 'affordability' if you get me.

By taking out a mortgage over a longer period you usually have the option of overpaying and not actually paying more at the end of the reduced term compared to someone who took that term to begin with.

I cant understand why anyone taking out a variable length mortgage wouldn't take out as long a term as they can.

bear1 · 09-09-2014 1:43pm

I have an 80/20 mortgage.
20% I coughed up and 80% the bank.
after 25 years we will have paid just over double the amount borrowed.
I was told however that I'd need to wait 2 years before I could start paying off more of the loan that needed, can't remember now the reason why.

Zubeneschamali · 09-09-2014 1:50pm

Balmed Out wrote: »

I cant understand why anyone taking out a variable length mortgage wouldn't take out as long a term as they can.

Discipline.

It's all very well to say you'll pay off more than the minimum per month and get finished early, but many people are tempted, month by month, to pay only the minimum, so they end up paying more over a longer period than if they had the discipline of a higher monthly payment.

A bit like the credit card minimum: "If you pay only the minimum payment, this bill will be cleared in 2038".

Berserker · 09-09-2014 1:53pm

In my mid 30s. I don't have a mortgage nor will I ever have one, as I have no interest in becoming a property mogul unlike most Irish people, it seems. I have never taken out a loan, as I have always paid for cars, holidays etc from my savings. I upgraded my car last year and looked into the cost of taking out a car loan. I was gobsmacked by the interest rates.

ulinbac · 09-09-2014 2:22pm

Berserker wrote: »

In my mid 30s. I don't have a mortgage nor will I ever have one, as I have no interest in becoming a property mogul unlike most Irish people, it seems. I have never taken out a loan, as I have always paid for cars, holidays etc from my savings. I upgraded my car last year and looked into the cost of taking out a car loan. I was gobsmacked by the interest rates.

well done with that!!!

Out of curiosity, do you plan to rent for the rest of your life or are you saving for a apartment/house?

Barely There · 09-09-2014 2:34pm

Berserker wrote: »

In my mid 30s. I don't have a mortgage nor will I ever have one, as I have no interest in becoming a property mogul unlike most Irish people, it seems.

I think 'most Irish people' prefer the term 'homeowner'.

Berserker · 09-09-2014 4:59pm

ulinbac wrote: »

Out of curiosity, do you plan to rent for the rest of your life or are you saving for a apartment/house?

Rent for most of it but I'll have enough savings put aside to buy myself a nice one bed apartment in the countryside or abroad when I retire. I could afford one now but I wouldn't be comfortable buying the rubbish that's available now, i.e. the dregs of the boom, given that I would be living there for the next 35+ years, looking at the average life expectancy. Also, I think that renting and saving is a better option for me, as it allows me the freedom to move, if work dries up here. If you own a house or apartment, you are largely tied to the location.

Barely There wrote: »

I think 'most Irish people' prefer the term 'homeowner'.

I disagree. I think a most Irish people, not all, buy property for use as a form of wealth, as opposed to a home. If they didn't, the term 'negative equity' wouldn't be used so frequently, as the individual/family would have no interest in the value of the home. It would solely be a place of residency and the value of the home in relation to the current market value would be of little relevance. There is an unhealthy obsession with property in this country. Take a look at the news and the pending property bubble as proof. It's only a matter of time before I have the "You need to get on the ladder or you never will/Rent money is dead money/House prices are only going one way and that's up" conversations.

lukesmom · 09-09-2014 8:25pm

Maximus Alexander wrote: »

I must look at things in a warped way because my thinking is that if it's going to take me 25+ years to pay for something, I can't afford it.

Me too.

Biggest debt you've been in?

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