To ask how to come to terms with this financial situation

[Justcaant]

I’m 40 soon and last year separated from a long term partner. I now have our DD all week and he has her EOW. CMS is sorted but the real issue is that I now own a home alone (we rented previously as were saving for a house).

I have a 240k mortgage to pay off. I may never actually pay it off. I feel completely financially stuck. I am constantly worried about my job and bills. I have 1.5k in savings and try and add 100 a month but it’s hard. I never thought at 40 I would be in this situation. My parents are reasonably well off and I was brought up in a way that is now totally different to my daughter and I feel terrible about that too. I keep thinking I will be old and alone and unable to pay bills so end up on the streets. I am waking every day at 3am for some reason and just going over and over this and there is no way out. I wish I had made better financial decisions when younger and now it’s too late to fix it. How do I cope with this and accept where I am? I don’t want this to rub off on our child.

These fears are all in your head. Push them away and keep doing so whenever they reappear.

Think about how much your life has changed in the last thirty years. There will be just as many changes in the next.

If, when you retire, you haven’t paid off your mortgage, you can downsize then. Your daughter will no longer need to live near the school…

Every year that you manage to provide a stable home and school life for your daughter is a year of achievement. Congratulate yourself for what you’ve achieved and for every additional year you get under your belt in the future. Her childhood will pass more quickly than you expect and suddenly you’ll look back and realise that you’ve made it - most or all of her childhood was spent in a stable home environment, provided by you.

Yes, something might go wrong, but that’s true for everybody. All we can control is what’s happening at the moment.

If something did go wrong, I’m sure you’d still manage to be a source of stability and love for your daughter.

A stable home and school life is all that matters. Everything else is just glitter and garnish.

You take out an equity release to pay off your existing mortgage. You don’t have to make repayments on an equity release. They have their disadvantages (eat into inheritance), but you will not need to make repayments.

You're only 40
Don't worry about the next 30 years, just be grateful you have a stable home and can meet the mortgage payments.

In the future who know what will happen. You may meet someone else who can contribute. You may inherit lots of money. You may downsize. Move to a cheaper area. DD might decide stay living at home and contribute.

Might be worth getting income protection cover if you haven't already.

I know many people who are in a couple at 40 but they have a 400k joint mortgage with huge monthly payments. At least yours is affordable. You have a three bed home. One day you will be mortgage free. You’re financially self sufficient.

If it makes you feel better OP I'm in the same boat but 10 years older and haven't even bought my post divorce house yet!
Downsizing and reducing mortgage is my plan,as many people on here have said. Having a dd who is 12 you will feel like it's miles away but honestly the teen years fly in
I am very worried about my financial future but for right now I'm grateful for a roof over my head and a job. Take it one step at a time!

Let’s say you own a farm worth £2.2 million – that’s about the average net worth of a farm in England, according to figures from Defra.
If you’re single, the Treasury states you’ll be able to pass on up to £1.5 million of this to children or grandchildren tax free. That’s the one million pound allowance for farm owners, plus the normal tax exemptions that everyone has, which are worth up to £500,000.
£2.2 million minus the £1.5 million in tax exemptions leaves £700,000 that could be taxed.
Under the new government policy, that £700,000 would be taxed at 20 per cent – rather than 40 per cent as non-farmers pay.
This leaves a theoretical tax bill of £140,000. Your child or children can pay this off in instalments over ten years, interest free. That’s more favourable than inheritance tax bills non-farmers pay, which face a 7 per cent interest rate.
So that’s an annual tax bill of £14,000 for ten years, in our hypothetical example.
Now imagine that you’re part of a married couple and are passing on a farm of the same value – £2.2m.
The Treasury states “two people who jointly own a farm will be able to pass on land and property valued up to £3 million to a child or grandchild tax free”. This is because you and your spouse could each pass on a £1.5m tax exemption. (Spouses don’t need to die at the same time for their heirs to benefit from the combined £3m exemption.)
That means, in this example of a couple passing on a £2.2m farm, your children should pay no inheritance tax at all.

Moreover with each year the debt is diminishing in real term value.

i would not be protesting - I would be saying ‘thanks’. It’s a great deal.

Eh? Where does OP say she owns a farm?

You get better rates when you remortgage if your loan to value goes under 60%.

Honestly stop panicking. Mortgages are usually the cheapest form of debt you can get. There is no point downsizing in the shortterm as moving is so expensive. Look at your budget, do your best to have enough saved for emergencies & avoid expensive debt (credit cards, store cards). Listen to the Martin Lewis podcast! He's great and very positive about saving money.
Your mortgage debt will go down & its's highly likely your house value will go up longterm.

Would you be willing to get a flatmate when your daughter is no longer at home? I get that flatmates in your 50s probably wasn't what you had in mind, but sticking anything you clear from it into paying down the mortgage would definitely help, and you might feel a bit more secure now, if you have a plan for the future.

You’re worrying about something that will likely not be a problem for you. You don’t know what will happen in the next 2/5/10/20 years. You might meet someone and decide to buy a house together and then bills and mortgage etc will be shared. Just focus on the now - you will be fine. You own your own home and that is great. You can afford to put food on the table and you are giving your child a stable life- you can’t compare to your own upbringing and your child can’t compare to that as they weren’t around then.

If it was me, and I know someone that did this due to divorce too, I would buy a 1 bed maisonette and turn the sittting room in to a bedroom for you. Have a kitchen that you can put a table and small sofa in. See if you can become mortgage free that way.

Or a female lodger?

If you earn less than £50,000 you will probably be able to claim universal credit as a single parent. Have you looked into that?

You'll be surprised at how much your mortgage will be reduced by over paying by saying £20 a month. Use chat gpt to put in your mortgage details and ask it how much it would reduce your mortgage by if you overpayment £20 a month for 2 years.

Put dc in box room get a female lodger

If it makes you feel better I’m 47 and am about to get a mortgage for £300 k 🤦‍♀️ but I’m proud of myself and you should be too ❤️

I suspect her earnings are too high for that.

What is your annual salary?

It feels scary being on your own, and the future being uncertain. But you do have lots of options. I'd see a free financial advisor, save as much as you can, consider downsizing, and consider options to progress your career. I was in the same boat and when my kids went to uni got a better paid job. More stressful and demanding at a time when many friends are retiring and 99% are part time, which can feel isolating and unfair, but independence and purpose are upsides. You have many possibilities ahead of you so try to get some help with anxiety and slow down this thinking. Good luck ❤

Appreciate as a single person its all on you but your rationale doesn’t make much sense.

If it wasn’t a mortgage it would be tent, so you have to pay for a roof over your head whichever which way.

Ditto paying a mortgage until 70. Well you’d also otherwise be paying rent if you don’t own. The hope might be a small increase in house value means you can pay off earlier/get equity out if it.

I can completely understand how you feel, I am in a very similar position and similar age to you. Marriage came to an end and having been fairly comfortable before when bills etc were shared, I am now in a completely different position and watching every penny despite having a 'decent' job (or what used to be considered a decent job)
XH was very crafty in the divorce and was so incredibly difficult that I effectively walked away with the bare minimum rather than spend a further 2 years battling with him in court and losing money in legal fees anyway. For the sake of my mental health I cut my losses and walked away with very little. What I did have was just enough for a deposit to buy my now home. It has been so difficult coming to terms with starting over effectively at 40, and at times I feel overwhelmed with responsibility. In addition the house I bought needs a lot of work which I have taken on due to it being in the right area for DC re school, friends etc.
I try to comfort myself with the thought that I have provided stability for DC and in time things will get easier, the house is far from perfect but it's MINE and no one can take it away from me as long as I continue to work at my job and work at being the best parent I can (the other parent having checked out of responsibility)
What I don't have on my side is the chance of inheritance in future(apart from perhaps a very small sum).I would find that very reassuring for the future if I was you, although I appreciate it can't be relied on completely, a very small % of people actually end their lives in care homes.
Sending solidarity and peace. Feel free to PM if you wish to chat.

Yes I think so too. I was offered a maximum of £240k mortgage on my own and my salary was over 50k.

You are completely wrong about this OP.
You will likely inherit half a million as your share of your parent's house and their other assets and investments.

Where do you get the idea that inheritance tax will leave you with nothing? The RS only payable on estates over a million and even then anything above a million is taxed at 40%.

Kindly, you are not thinking straight at all and seem to be in panic mode. You have been through a lot and I would focus on getting some psychological support, you can self refer for counselling on the NHS.

I think your username says it all. You just can't. Your mindset is anxious and you're now panicking about something you have achieved and feels permanent. Change your username to "ever the positive ".

To have any savings and being able to add to them monthly is something I dream of. Also single parent..of a teen. I rent and can't see will ever be able to buy unless have a lump sum input of money.
You're paying your bills and looking after self and child. Be proud of that
I also feel sad that I cant give my child the lifestyle I had..nice big house and garden but life changes and we're better off than a lot of people - go on hols to Europe every year etc.
Plus I am proud I've done it all on my own..no matter how tough it is at times.