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Financial problems, mortgages and inheritance - my money mess!(26 Posts)
Please can someone give me some advice.
I am a single parent with 3 teenagers although the oldest is now 18 so technically not a dependent (working but still living at home). I work for the NHS and have an ok salary but work long hours and shifts. When my partner and I parted I took on the house, now in my name only but have a crippling mortgage and a number of other debts.
Until recently my mum was giving me £400 month to help and I received £650 from my ex in maintenance. Then my mum died and my ex announced he had lost his job and wouldn't be paying anything more. Overnight my income dropped by £1000/month. Despite scrimping every penny I can I am still about £500 month short and am currently buffering this with some money left from my mum but it will only keep me going a few months. My mums flat is on the market and when it sells I can clear a load of debts and reduce my mortgage to a more realistic level but in the meantime......
I have spoken to my mortgage provider but they wont do anything until I go into arrears when I can agree a reduced repayment plan but it will wipe out my credit score which is currently good. My local adviser suggested interest only but they have told me that unless the flat is in my name they can't use this as a "plan" so won't consider interest only even though this would reduce my mortgage by £500/month. The flat has gone through probate - there is a small amount of debt (£10k) owed for care fees but the rest will come to me.
I am so frustrated. I have tried to be proactive in pre-empting the crisis but feel my provider is unsupportive. I don't know enough about probate and wills to be able to argue with them. Can anyone suggest a way to manage my situation without getting bad credit. The ex could get a job or the flat could sell at any point but equally I could still be in this position in a years time in which case everything will fall apart. I have fought so hard to hang onto our home and manage everything but I feel like there is a huge axe swinging above my head. Please advise.
If you have probate can you not put the flat in your name?
On mse you can do a statement of affairs, why don't you fill it in and copy it into here, we cann have a look and see where you could save.
Another suggestion (and this is what I do) is overtime. I work, on average, an extra week in a month. Yes, I'm exhausted and haven't got much of a life at the moment, but I have a definite plan, I need to clear some arrears in the next 2 and a half years.
I earn enough to pay the mortgage, bills, emergency savings and two food shops. All the extra shifts cover the debt and overpaying the mortgage. Perhaps you could buckle down for a year?
I've been doing this for two and a half years, it's not easy, but you get used to it after a while.
8fencingwire believe me I have been scrimping for the past 3 years. I do work extra shifts when I can. I have been known to do a 60 hour week before but with staff cutbacks the shifts are few and far between and as I am full-time there is not much I can do. We don't get overtime we are paid a bank rate which is band 5, to do a band 6 job. My mortgage is £1100/month which is half my income. When I received maintenance I could manage but its hard to suddenly save £650/month. I have cancelled my sky, broadband and landline. I buy meals only, no snacks (my kids say I am starving them). I don't socialise. But its still not enough.
Ferrisday I have just been looking at the land registry site and struggling to work out costs, forms and timescale for transfer of title. If it would mean they would allow me to go interest only it would be worthwhile I think but what I don't want to happen is get half way through the process, get an offer and then it cause delays. If it takes a few weeks it would definitely be an option although the only other potential problem is that its a retirement flat so as i'm 45 I might not be "allowed" to be the owner IYSWIM but I will definitely look into it thank-you
You shoul be able to transfer the flat in to your name through land registry:
Meanwhile is it likely you could airbnb the flat for a few days a week? This could still work well with viewings on the vacant days.
Is the 18 year old paying rent for staying home? (If he/she has an income, that is.) Can you sublet a room to someone? Or depending on where it is bed-and-breakfast? If the house is too expensive, it's better to realize this sooner than later, before you fall into a debt trap and have no options left.
Your message is temporary which is good. Concentrate all your free time and brain space on getting the flat sold as this will sort the mortgage. In your situation I would consider taking short term loans / credit cards to pay the mortgage assuming you are 100% sure that the flat will sell for a reasonable amount of money. And I'm someone who would never say to take a loan. Just make sure you pay it off when the inheritance comes through.
Is your eldest DC contributing if he/she works? Sure you can't get anything from your ex?
Does the 18 year old contribute to bills ? I'm assuming you are a Nurse - would agency work pay better for the extra shifts, I guess you would probably get taxed more so may not be worth it.
I wouldn't normally rcommend this but perhaps put living costs on a credit card for a while if you can be certain you can shift it around on zero interest deals.
Sorry it's so hard. We are waiting for deceased fil's house to sell to ease our financial situation ( 4 teenagers) but it has been on the market 18 months and no interest !
If the flat doesn't sell within a reasonable timeframe could you consider renting it out and put that towards your mortgage?
Are you claiming any tax credits you may be entitled to ?
Yes eldest is making a contribution of £200/month (on minimum wage) but it still leaves me £500 short. Have contacted ex to explain situation but he just ignored me. Haven't gone through csa yet as I understand that its based on his income and he hasn't got one, or at least is only doing small private jobs so will be hard to prove. Makes me so angry but that is another story! House is a bit too rough around the edges for lodgers and I'm not sure I'd be happy with my 2 teenage girls here with a stranger when I am out so much. But thank-you yes it is a temporary situation. I just wish I could get that flat sold as it will solve so much and hopefully that will happen. I was just hoping to do better than crossing my fingers. Perhaps transfer of title will appease the mortgage people. Its just so stomach churning in the meantime.
I had thought of putting stuff on cards but seemed so risky. However would certainly buy us a few more months. I have 2 existing cards that I' transferred to 0% card and a loan that I'm hoping to move to a lower rate. I get £10/month tax credits as on paper I earn quite well. Its just I'm paying out so much for mortgage and loan thats there is not much left over. I think renting the flat would be an option if no interest by end of summer but want to keep it easy to sell in short term. Its so difficult to know what is the best strategy!
I'm not sure about all your questions but I had my dads house transferred into my name after probate, I rang the land registry directly, they told me the correct form, it cost £40 and took less than a week (the cost depends on house value I think?). You couldn't possibly release equity or get a secured loan to tide you over until the house sells?
Can you rent a room out to female nursing/physio students, or female juinor doctors whilst they are on placement?
Put a note up in the staff room.
I'm a conveyancer. I'll happily guide you through the land registry forms if you like? It should be quick if the property is registered and there are no charges on it?
Oh just read your post fully. You won't be able to if it's a retirement flat. I think you have to be over 65.
Could you rent the flat out via the council? They may be looking for places to sent as temporary accommodation for people who are homeless. Not sure if it's allowed for a retirement flat though. Could you rent it out privately to someone who meets the criteria for the flat?
Good luck. Sorry for the loss of your mum.
Thank-you all for your advice. Some fab ideas on here. Orangeseed that was just what I need to hear thank-you.Busyboysmum thanks I will do as orangeseed did but might get back to you if i struggle with the forms. Looks like that might be a bit part of my solution. Fingers crossed. Antihop - thankyou x
Just to prewarn you that if it is a retirement flat there may be restrictions meaning you couldn't transfer it into your name. I'd be happy to look at the title for you if you can scan a copy over. If you're looking yourself see if there are any restrictions in the lease or speak to the management company about it.
Sorry about your mum .
How long has the flat been on the market? Is the price realistic?
Given the situation that you are in, and how much of a change receiving the inheritence will make, would it be worth dropping the price or auctioning the flat, even if you don't get the best price for it?
Alternatively, might it be worth letting your mortgage go into arrears, so you can go onto a payment plan for a few months? If you have a mortgage and are expecting an inheritence, why do you need to have a good credit rating or borrow money anyway? It won't be for ever, just a temporary blip.
You could keep some money aside when you receive your inheritence if you need money for big purchases like a car or house repairs.
The are restrictions about who can be resident but don't know about ownership so have contacted the property management company to find out and also make sure they don't have hidden charges if I do it. Spoke to land registry. They were fab, told me the fee and the forms and I've already had an email through with all the links I need. Confirmed it would take a week.
Barbaraofseville: thanks for your message. I understand what you mean its just frustrating that I have managed so far and am now being proactive in trying to avoid a bad situation and they are being unsupportive. My local branch advisor was really shocked. But if they won't help people avoid getting into debt there is nothing I can do other than keep saving as much as I can and buffer the rest with the remaining savings. Once that has gone there will be no choice other than arrears but like you say hopefully it will be a temporary situation and you gave me some sound advice there. Flat is on at a competitive rate. Don't think the election is helping with any of this. But if it doesn't go in next month I will reduce further.
Just a quick additional question busyboysmum you might know - if I can put the flat in my name are there any other implications for doing this? in terms of council tax liability for example? Don't want to solve one problem just to create another!
If you own one property (your main home) and sell a second home I think you may have to pay inheritance tax. You would need to check what level you start paying
Or if you rent out the second property I believe you have to pay tax on the income
If you have a spare room in the main house, I believe you can earn up to x amount before paying tax
Can you sell your main home and downsize ?
If you ring your local council they will advise you, in my area we get 6 months zero council tax rate from the date probate is granted, as long as the property is unoccupied, it gives you time to sell, or rent the property.
They should have advised regards inheritance tax as part of the probate, my dads estate was small so non due.
I would spk to mortgage people again as you can go interest only if you state how you will fund the final payment tell them you will be investing in a stocks and shares ISA at X amount each month for X years (work out how much you'd need to put away) then they will give you interest only.
Does the mortgage offer a payment holiday?
Ferrisday I have just been looking at the land registry site and struggling to work out costs, forms and timescale for transfer of title.
We did this very form last night op - DH had to work on it with instructions on site, depending on value of property there is a fee to pay ours was under £150 thousand so we paid, £60 fee, filled in forms, and they said it should take a week ( to get it in my name) as long as there is no problems with the forms.
^^ Oops sorry op.
If you need any help with forms my DH may be able to help - the confusing part for him was the bits he didnt need to fill out.
Re probate - who is sorting it out for you? are you doing it? You will need ot send LR sealed grant of probate form.
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