Mortgage panic- what to do?

[lalalawhitenoise]

I’ll preface this by saying I will be seeing a mortgage broker to get advice. Please no, well you shouldn’t have got htb- I did so with mortgage advise. I’ve / we’ve done my best to save and have done so but a few things happened, mat and redundancy back to back (had been in role 2 years so didn’t get a lot)

My 2% fix is coming to an end (1st jan next yr). I have a htb equity loan on my house. House purchase price was 300k, houses selling lately for around 390k. I have 40k available cash (well technically 60k but I don’t think it’s wise to get rid of every penny I have, part of that is a ‘loan’ from family to be paid back later phrased as ‘whenever/ if you can’). At end of fix, outstanding loan will be 210k.
i have quite high childcare costs relative to income. Current mortgage is £750, childcare more than that.

so I’ve worked it out that I have a few options. All assuming a 6% interest rate which when I’ve been looking up seems to be ballpark where we’ll be looking.

option 1)-use £40k to bring down the outstanding balance to £170k and then pay interest on htb for 2 years until things calm down, property prices crash and then take some additional borrowing and port at a later date. So there is the money borrowed from family here too, it’s more additional borrowing at a later date? Monthly cost for this (roughly) £950

option 2). Use 40k to pay off half of htb then half of the that 20k to bring outstanding balance to 200k, pay interest on half ouf htb and take out additional borrowing on 10% of property value to pay off outstanding htb and a bit more to pay family member back. Monthly about £1050

option 3). Payback family member now, and switch deal for balance as is and then pay interest on htb. Monthly cost £1150/1200

option 4) add it as additional borrowing now and payback family member about £1500- this is double what we’re paying now so feels very tight for me- manageable but with very little contingency.

option 5) going on that 6 month payment holiday that’s apparently been introduced- but that seems like kicking the can down the road as I don’t imagine anything will have drastically changed by this time next year?

option 6) going interest only, but with house prices bound to slump won’t we risk losing equity as we won’t have been gaining a share of the house as you could in a capital repayment mortgage.

our term is already 35 years and we can’t extend it further i don’t think as it would be well into retirement age?

(the money as been lent for the sole purpose of helping housing wise not just as a gift in case of emergencies)

there’s limited options for savings to be made, we’re a one car household (really need a second tbh but won’t be getting) no cheaper childcare (oldest is in school but it’s the wrap around childcare still adds up which we need for work) no subscriptions aside from Netflix, already shop at lidl/ aldi/ asda, dh has a penchant for being lazy and outsourcing ‘blue’ tasks such as mowing lawn or building things - this will stop and obviously takeaways are an easy one to cut away- but it’s not £700 worth of savings.

we could switch to the new SO deal on energy? Anyone seen that we’re currently on the price cap tariff.

im trying to solutionize to stop myself freaking out. What does anyone think? are there other options that I’ve not thought about?

How is that actually being considered as an option? My university age children don’t even want to share. I can’t even imagine allowing anybody into my children’s home. I’d sell kidneys before it came to that.

In the nicest possible way, when did you book these hols as interest rates have been rising for the last year, this situation can’t have come as a surprise to you

😂😂😂 you sound so unhinged! Having a lodger is a perfectly normal thing to do.

If family member is not in a hurry to be paid back, delay that - it isn't a priority debt.

The money is OPs. Its a verbal inheritance. Family member doesnt consider the money theirs at all, and would only need it if something bad happened.

Take the family member at face value. If they have given you such a sizeable amount towards securing your home, trust that they don't need it and want you to have it because they love you and want to help make your life easier.

Is it fuck. Having some random person living in your house with your children ? Can you imagine if that went wrong? The daily mail headlines.

The OP really isn't at the stage of needing to consider a lodger...come on now...

aaah you are a ‘paedo round every corner’ type, explains a lot!

It’s a bit of a complicated one but it was booked before the person passed but postponed as were the rest of the payments so we’ve paid it off over the last year. But honestly at work in September last year when we put a date down to go (been postponed twice due to circs) the predictions at where I used to work was the BR to top out at 4% and for a while there were some mortgages under the BR so we thought it might be ok to just pay half the htb or kick it down the road a bit and then just not use savings or money to reduce balance, sadly this has changed

While I am definitely NOT in that camp, having a lodger is very intrusive.
And I say that as someone who DOES have a lodger.
She knows that once I have a baby, she needs to move out. And I wouldnt consider another lodger ever again, unless I was facing repossesion on my house if I didnt get that extra help.

probably not a lodger but I’ve been debating getting a second job, not sure what though as I don’t think i could hack waiting tables with 2 young kids. I’m bilingual in a European language but truthfully there’s not a lot of appetite for language tutors, im on all the sites.

Let your double and be really choosy about your lodger. I was a Monday to Friday lodger for a bit, I was a nice, late middle aged, very housetrained lady. I turned up on Monday evening and buggered off on Friday morning. I paid £500 a month. You want someone like me. There are websites dedicated to week day lodgers.

Fair enough. I really don’t think you need to panic though. You have a lot of wiggle room

couldn’t fit the 2 kids in a single room, one is still in a cot

You really shouldn’t need to, even if you had a 2000 payment that should be manageable and you are nowhere near that. How
much wiggle room do you think you need ?

I’m super wary because during truss gate we spoke to a broker (can’t remember the name of the company) but he said we would struggle due to affordability, the size of the loan and our dependents and outgoings- that’s panicked me a bit

I thought you’d got two singles?

Then childcare of 1k and we spend about 600 on food (allergies) and by the time all bills are paid it’s leaving us with very little for adhoc expenses (the annoying type that come up every month) and savings

2 double and 2 singles, but we need an office space for work

Sounds like a pretty awful broker, your borrowing is only about 2.3 times joint salary. Your HTB is at a really low rate so overall you are in a sound position. My concern would be that they do to the HTB loans what they did to the student loan interest rates and they stop being ‘ the cheapest loan you’ll ever get’ and shoot up in cost. But there has been no mention of that so far I don’t think. Realistically 750 a month was never going to be your rate for 35 years

There is a mortgage crisis, a refugee problem, a cost of living crisis and a lack of housing.

Have you never shared a bedroom?

Many people rent out a room, my husband did, in houses with children, ny brother did, in houses where the women needed help with the mortgage, as a first year student I did, in digs, with a family.

It’s a perfectly logical thing to do. My brother, a married man with children never saw his working ‘landlady’ . She and he were working, he had his lunch out, stayed Mon to Friday and it worked brilliantly. He had a bowel of cereal and coffee for breakfast, never cooked.

If you are still factoring having money to put into savings each month then you are definitely not in a place of panic!

No, I have not shared a room. Bloody hell, the very idea.

Exactly what my brother and I were.My brother negotiated no bills, so one price, so there was no messing. He has an ensuite too, so no need for him to go to the family bathroom. He worked late or went to the gym. Only used the place to sleep.

When we bought our first home I had lodgers. The only one was a problem was the young student who was working in McD. He brought home a different girl every weekend and the springs on the bed were very noisy! I’m older now so that wouldn’t be allowed.