Hello Dear Reader,
As an avid reader of Elaine's Mortgage Free in Three; her post today asked people to set a date when they would stop using credit. I too would ask anyone to do that as I wasn't in the position to choose to get out of debt but forced to as the bank refused my mortgage. I had to get rid of my debt and you may be in the position right now where you need to get rid of debt too.
If you want to get a mortgage. Banks and Building societies are really fussy. They will want a 25% - 45% deposit if you want a decent mortgage rate. The current 5% deals with government loans (stupidly sub-prime in my opinion - if you can't afford the full deposit then you really can't afford the full loan) don't offer the low mortgage rates. Also, if you have any other debts, you are unlikely to get a mortgage! The before you save for a mortgage deposit, then you need to clear the debt you have first so you can secure the very best deal.
If you want the freedom to move to a different rented property, as agencies will run credit checks, you will also want to get rid of debt. If you want to move on and get your first home, rented or otherwise, you will need to get rid of debt too or you will carry it for years to come.
Just like Elaine, I'm going to ask you to set a deadline. Elaine asked when it would be that you stopped using credit. I'm going to ask a similar question and ask by what date do you want to be debt free? Say, write it down, blog it, Facebook it but make a public declaration and stick to it. We set the date of being debt free by the London 2012 Olympics and actually managed to be debt free a year earlier. We made that happen as both of us took on extra work and sacrificed every penny beyond mere survival to do it. We are now frugal but we used to be deeply deeply frugal and didn't let up for one second until all our debts were gone.
Give yourself a swift kick in the butt and make that promise right now! It's going to be difficult but never as difficult as never starting at all!
I'm on Radio Cornwall tomorrow talking about managing and getting rid of debt. If you would like to share how you are managing your debt or how you got rid of yours then email tracy.wilson@bbc.co.uk and we'll share your stories on air. If you would like some confidential advice (we'll not mention any names or locations if you ask us not to) the the Truro Branch manager of Christians Against Poverty will be in the studio with us to answer any calls or give advice on debt management. You can also call on 01872 22 22 22 between 11 - 12.
You can make a pledge right here! When do you aim to be debt free by? Who is debt free and is able to say how long it took them to be so?
Until tomorrow,
Love Froogs xxxxxxxxx
