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)

I don't think people need to be in extreme poverty to worry about finances and ask for advice- having to sell your house would be rotten, even if you're still well off relative to someone else.

I do think, OP, that you need to get a realistic view of the situation. I found it quite hard to follow your sums but it seems there are lots of things you're "rounding up" out of caution- while I can see the temptation to do this, it actually just makes your sums a bit meaningless. Better to use accurate figures in a spreadsheet to begin with and then run various scenarios for increases as a stress test. And make sure you are including everything in the right category (eg the £700 first covered just clothes and emergencies, then it was fuel as well, then it was fuel and food- I found this quite confusing as surely fuel and food are much more major expenses than clothes? Getting all this straight might help you feel less stressed.)

Finally, your financial arrangement with your husband makes no sense and is completely unfair on you.

You should be fine. My mortgage is £1,800 pcm and my take home (single parent) is half your household’s due to long Covid restricting the hours I can currently work. It’s not fun, but it’s manageable with care. Work out a budget, have a spreadsheet of spending etc., meal planning. It all helps!

I don't think people need to be in extreme poverty to worry about finances and ask for advice- having to sell your house would be rotten, even if you're still well off relative to someone else

i don’t think o/p’s in any danger of losing her house. She has £700 in disposable income, and could easily free up another £500 by cancelling private healthcare and various non essential insurance packages, at least until kids are out of nursery.

private healthcare and life insurance for your kids are not an essential cost, especially if you’re risking your house over it.

that and her dh is keeping her short as well and needs to contribute more to the household.

@AchillesLastStand has your DH looked at increasing pension contributions? This can reduce his taxable pay so you don’t lose child benefit plus he gain the tax relief.

Just get a longer term to reduce the monthly payments, you can always then overpay. We're looking at getting at least 30 yrs+ mortgage

£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

This is MORE than sufficient if you budget well.

This is a budgetting issue rather than 'you can't afford and are going to lose the house' issue.

£1500 a month on mortgage with a joint income of £93k even with children you should be able to afford. Plenty of people on that income have bigger mortgages already and manage.

You really need to calm down and look at your outgoings. How much are you spending on food. Do you properly budget on that, because from what you've said I'm willing to bet you don't budget food either.

£700 a month for extras and savings is A LOT.

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

Looking at how you could have worded your title might have helped you look less insensitive.

Of course I understand that if you're living within your means and the financial outlook changes dramatically then it's a worry, but having a gross income of 65K means you will not be homeless.

well, when I worked in financial advice it was one of the things that became apparent to me, because if something happened to my
kids, realistically I’d be off work for a long time, and as we get 10 days compassionate leave it wouldn’t be enough, I’d probably struggle to go back to work, so having that burden lifted mortgage wise would be super helpful. Same with crit illness, friends child has cancer and she’s had to stop work due to the care requirements, having CIC in place for the mortgage is one less burden

as an aside, I’d recommend for most people if they can afford.

In the almost same position, our fixed ends next October, so we are going from a 1% rate to who knows, it’s going to be a huge struggle. Will also be in negative equity thanks to the housing market tanking.

just stay calm, you can only control what you can control.

I just am gobsmacked when I read these posts on MN, you are so wealthy compared to most. You shouldn’t have got your big huge house really, you clearly didn’t have enough of your own cash for a decent deposit and you’re overextended. Well… not really because you can easily afford to cover the increase you’re worrying about. I cannot believe someone so privileged that their family has health insurance!! and has income protection, and a big fuck off 4 bedroom house they pay very little for- try renting a house like that- has the audacity to come here and say they’re terrified of ‘losing’ their home. I’ve moved more than 20 times because I rent. Interest rates are too low and have been for too long. Sell your house and get a smaller one. That way you can keep all the luxuries you’re unbelievably fortunate enough to have.

oh and the above person saying we’re in a mess while she saves £1,000 a month. You people live in some bubble. Jfc.

Precisely.
🙄
How the other half live……

My one child has additional needs, so things get stained and sadly some don’t come out, but thanks

So go to charity shops! I almost exclusively clothed my kids that way. Seriously wtf stained clothes means £700 a month is gonna be tight… Jesus.

So they wear stained clothes! They are a child. This is NORMAL.

Whats not normal is replacing everything the second it gets stained!!!

If you're terrified about losing the roof over your head, trust me critical illness cover for anyone isn't even in the top ten of priorities. You're worried your lifestyle will have to change. The two problems aren't remotely the same thing.

How the other half lives, indeed.

93k, 65k after tax? Our combined income is about £55k after tax, we don't have little luxuries and are in the same shit show of a boat as most low earners, so I'm sure you'll be ok if you cut your cloth to suit your needs! If you f=go through your Direct Debits and STO's you'll probably find loads of little subscriptions etc that you really don't need. We've just cancelled Amazon Music, Prime, Postcode lottery, etc, saves about £20 per month but it all mounts up.

Unfortunately I’m not talking solely about food stains

You're worried your lifestyle will have to change. The two problems aren't remotely the same thing.

This is it exactly. And really you could change things in that budget that wouldn’t affect your day to day. I get life insurance if you can afford it. But Income protection isn’t worth it, save up to cover 3 months loss of income and you’ll be way better off. Health insurance isn’t needed here at all.

I grew up poor. We had girls with period stains. Mum soaked things in stain remover and bleach. In any case, go to the charity. Incredibly cheap and good quality kids clothes.

Sorry you are getting a pile on OP, it’s all relative and everyone has the right to be worried as things have gone downhill so quickly.

Try to work out all your outgoings without all the rounding up, sounds like to you have rounded everything up and that will be quite a discrepancy.

if you have a ‘rainy day fund’ - this is the kind of rainy day these things are for, if you have top notch health insurance.

It’s just a case of prioritising what’s important, house is surely top of the list.

as an aside, I’d recommend for most people if they can afford

precisely, if they can afford. If you are facing losing your house you can’t afford it.

while I get you have big outgoings, whining about losing your house while paying huge amounts of private healthcare and insurance is unreasonable.

you are no where near that point. The above would be classed as luxury spending for most. Work out your mortgage, childcare, electric, council tax, water and phone. Estimate fuel and car costs, food, basic house insurance .Anything over and above that is non essential spending and gives you a huge budget.

private healthcare and all that insurance is your choice. You seem to think you can afford it, so what’s the problem?

OP I know you've had a bit of a bashing from some, but I do understand a bit of how you're feeling. Our joint income is exactly the same as yours (93k) and our mortgage is currently £1150pcm. Due to our high LTV (85%), when it comes time for us to remortgage in 2 years, we could end up at above £2000pcm just for the mortgage. The thought of that is terrifying, especially as I'm about to go on Mat leave and I wasn't planning on returning to work at all - now reconsidering that given how much things have gone up! And however, unlike you, we have no savings at all - we did have 16k, but decimated it in order to buy our current home which we recently moved into.

We've just moved out of our first home which was a HTB property. I'd use the money you have in savings to pay off the remaining loan as you've considered. Then draw up a worst case scenario budget, and begrudgingly accept that your lifestyle will have to change, maybe drastically, to afford continuing increases in cost. You can't look too far into the future and catastrophise that the house will eventually become unaffordable - I know it's hard not to, I do this too and have spent most of the last 2 weeks panicking about money.

You will be fine. As will I. But living on less money will require some planning and thought. x

PS

Others have 'kindly' pointed out that many people manage on much less. I get it, having grown up in absolute poverty and lived early adulthood at the lower end of the income scale. However it might be useful for people to show some actual kindness - it's always a shock when your financial situation changes drastically. OP is asking for reassurance and help, not an earful.

However it might be useful for people to show some actual kindness - it's always a shock when your financial situation changes drastically. OP is asking for reassurance and help, not an earful

if o/p was genuinely struggling I’d have more sympathy. But anyone paying out over £500 a month on non essentials like private healthcare and life insurance for their kids is not struggling.

How are you getting a cost of living payment??

@forevercooking I wondered that too!