Terrified I’m going to lose my house

[Hangrysaurus]

ever since this shit show of a mini budget and the economy and mortgages spiralling into chaos, im so so worried about losing my home.

2 kids in childcare to work, will be switching providers to save but dh and I take home about 93k before tax and about 65 after (thanks student loan)

mortgage is due next late December. We have help to buy too, which comes to the end of the 5 year interest free end of next Dec too. We looked at switching when lloyds had their 3.7% rate but with the 4.5k erc it was an extra £700 per month, close to 1500, aka totally unaffordable, even the broker wasn’t sure it was a good bet.

if we pay off the htb (we have about 40k in savings for this) and depending on house value htb is about 75k, if we did this we’d need to add 30k to mortgage or borrow it from parents (although that’s the cash draw down from a pension that the government have also fucked). Then we’d have a 60% ltv provided the house price doesn’t tank too much as we lose our equity.

when we did our mortgage they stress tested to 4.5% as that was the highest rates mortgages had been in the previous 10 years. We were very comfortable in terms of affordability and we’ve done all the right things in terms of future proofing, aside from having kids. It shouldn’t be this way.

i know the banks last resort is to take the house but honestly I’m spiralling. We both recently got new jobs, a combined about 15k a year increase but it ‘only’ amounts to be 400 after tax. Will it all be ok?

(if this comes across as insensitive im really sorry don’t mean it to be)

Firstly stay calm!

Secondly, do the figures, write down all your ins and outs and work out what you can actually afford.

Sorry I can’t be more helpful but you’re not in the boat alone unfortunately.

honestly I’m spiralling

You are.

None of what you’ve said makes it sound like you won’t be able to pay your mortgage.

This is a whole year away - yes? Not this coming December? Things will look different then- whether it’s better or worse we can’t accurately know so stop worrying.

Thanks koala!

we’ve done all of that and if our bills stay as is and that’s a big if fuel and food wise, and our mortgage does go up to just shy of £1500, we’re left with about £700 a month extra but that’s to cloth ourselves, the kids (who of course grow like weeds and ruin everything) rainy day fund and any ad hoc or emergency spends. Whilst it sounds ‘ok’ I’m not sure it is

if our bills stay as is and that’s a big if fuel and food wise, and our mortgage does go up to just shy of £1500, we’re left with about £700 a month extra but that’s to cloth ourselves, the kids (who of course grow like weeds and ruin everything) rainy day fund and any ad hoc or emergency spends. Whilst it sounds ‘ok’ I’m not sure it is

It is. Yes you’ll be poorer than you prefer and your lifestyle will take a hit. But you won’t lose your home or starve.

I’ve just got this put in my stomach that says it will likely be worse, given gov wise things seem to be going from bad to worse and I even work In banking and the tagline seems to be ‘brace yourself’

£700 for all that is plenty. We have a very similar income to you, child in childcare and another on the way, paying £1400 rent and everything else as well, plus trying to save for a deposit, and it’s fine. You’ll be fine.

£700 a month spare. Jesus Christ. You're fine.

If you’d like to feel more in control Id recommend YNAB, it’s a brilliant budgeting tool that’s changed my life and you can put money away for all those surprises and rainy day things so they’re not so surprising

£700 for clothing/extras/rainy day fund is more than we’ve ever had and we do absolutely fine. And your situation is short term as you won’t have two children in full time childcare forever. You’ll be fine.

£700 a month spare? Honestly, families survive on much less.

The brokers we spoke to sais due to responsible lending they wouldn’t really lend to us at that sort of monthly payment but you’re probably right, it’s just so awful all around, it’s almost unbelievable how many people with ‘good jobs’ will be struggling

£700 a month for clothes and emergencies

And 40k in savings 🫠

Thanks! I’ll look into that!

So basically your spiralling cos the amount of money you'll have left over for savings or your rainy day, emergency as u out it will be less than it is now.

Cos if that is what ur saying, u need to have a long hard and think how your fortunate u can still save.

I am in say boat where the amount I can save is being cut I to but I accept that I'm still lucky I have a huge buffer that can absorb any future increases

£700 is OK. You'll be OK.

Get NT membership to save on carpark fees and days out. (Or English Heritage. Whichever suits)

Download Vinted for clothes (even kids shoes are on here!)

Only buy 2nd hand books from World of Books (bought a almost new DK encyclopedia for £8 instead of £22 brand new!)

You'll be fine, promise x

That will go though, has to clear the htb or the mortgage is around 2k

Is there a back story here in terms of anxiety or other mental health issues that is causing you to be unable to rationalise?

Well with a year to spare could you cut back to bare minimum and really watch every penny, you might be able to save a little pot for if and when? And also then if costs spiral again you will have got used to living on less anyway!

£700 disposable income is plenty, I would do a proper budget and write down all incoming/outgoings, it will make you feel calmer about the situation.

I'm sorry your feeling so panicked, unfortunately you are going to get a bashing on here because so many people are in actually disastrous financial circumstances. Make a budget, work out where you can make savings and cou t your blessings.

You'd probably do well to work out what your budget will look like when your mortgage goes up and try to live on it from now on, so you'll build a bit of a cushion and also see what it feels like before committing to any new mortgages or making other big decisions. WIll your childcare go down significantly any time soon, eg free hours, starting school?

Also try to stretch your budget as far as possible, check your broadband costs, cut out any subscriptions you don't use etc, to see if you can free up more spare money to live on.

Have a look at Moneysaving Expert and do everything that is relevant.

www.moneysavingexpert.com/family/money-help/

But on £93k (most people pay tax and many pay student loans, it's not necessary to talk about these as you're the only ones affected by them) you're in a better position and have more options than most people who have a lot less coming in.

Yeah I do struggle with anxiety ( from child abuse and I’m actually getting support for it, but it’s early days but I do realise I catastrophise) and my husband and I our finances are separate and he’s the bigger earner so the bulk of that £700 (which i forgot to say has to cover fuel and car stuff too, and some necessary home improvements) is his, about £200 is mine and I buy most of the kids stuff

Can you extend the term? If you stretch it from say 20 to 30 years you'll drop the monthly repayment. If things improve in the future you can overpay to bring the term back down.

This.

I understand the apprehension given lots of uncertainty but you are in a good place.

Remember that banks make money off people who have mortgages via all that lovely interest. It is not in their interest to have people default. If something catastrophic happens you talk to them, extend the term, interest only, mortgage break etc. but sounds like these are unlikely to be needed in your situation.

Chill.

Sounds like you need to pool the £700 and agree budgets for everything it covers. 2nd hand clothes for the DC are cheap.