How do people do it? Can’t afford mortgage

[MonsterTrunk]

Hello,

We are a family of three - DH, myself and our 3 year old.

So our current income is just under £50k with DH working full time and me part time. Our current mortgage Rate runs out this year and it was £900 a month and current rates are around £1300 a month. With energy rates and petrol and food and savings as we need a new roof we’re okay at the moment but that loss of £400 is going to make things very tight. Very very. As I I don’t know if we will be able to afford it.
The answer would be me working full time but then we have to pay for childcare - we have no family to help so I’d have to pay for before/after school club and holiday care, so the extra money would possibly be gone.

What do people do? The mortgage rates are a killer. We’re going to go through everything and tighten where we can and will hopefully be okay, but this situation is just awful. I didn’t realise the jump would be so high. We’ve been very lucky with our last mortgage and I realise that now.

I really feel for you. I think the early years when the dch are small and your mortgage is new are the hardest. My credit card bill was high every month then, occasionally with the weekly shop. When they go to school you have more options for work. It's funny how certain Tories have got richer and everyone else is struggling, isn't it? I really feel for the charities, animal sanctuaries etc that rely on donations. (Sorry. Am ranting.). Talking to the mortgage company or a broker who could get you a better deal is your best bet.

It's not your fault. It's the government's

You only start losing child benefit when one earner earns more than £50,000 a year. It’s not based on household income (which is why it penalised single parent families so much)

What really gets me about the whole ‘get a better paid job, ‘retrain’ schtick, is this: So do we as a society really accept that whilst a lot of jobs need to be done (teacher, nurse, cleaner etc.), those people doing the jobs don’t deserve to be able to afford to live?!

Childminding registration costs are £££ it requires a strong understanding of the eyfs, you have to plan and resource activities to further their development and document your observations. Your setting has to meet ofsted standards and offer a good variety of educational opportunities. You need risk assessments, policies and be willing to access cpd. There's are several mandatory courses/insurances/registers.

Babysitting could work tho.

Anyway. Rant over! Moving is expensive: selling fees to estate agent, legal fees for selling, legal fees for buying, moving company costs, stamp duty, problems with new house that cost a fortune to fix… When I found myself in a right pickle, I extended my mortgage term, am now paying till I’m in my 70s. Terrifying but was the only way. That was the main way of reducing monthly costs, even though longer term it costs more in interest. I slashed spending to the bone, we don’t have paid for days out or holidays. I don’t but clothes for me, and only for Dd when she’s actually outgrown things. Obvs I then sell on her old things, but that is minor in the scheme of things. Mortgage was key. Plus, hopefully in 5 years time you won’t have such high childcare costs, and interest rates won’t be so high. You just need to get through the next few years. The suggestion someone made of childminding sounds brilliant if you can make it work, more income, no increased childcare costs, time with your children! Though if, like me, you can’t stand other people’s children, more hours at work and paying for childcare even if it does only make a small difference financially each month might be the answer..

I agree with you, it’s disgusting but equally I don’t have time to fight the issue of capitalism when I have a family to support. I do think it’s awful that basically teachers and nurses are to be seen as jobs that earn keep money with hopefully an investment banker husband on the side.

This.

This isn't a bad place to start.

https://www.moneysavingexpert.com/

https://www.moneysavingexpert.com/family/child-benefit/

I would

See if I can increase hours/do evening work.
Shop at Lidl/aldi /home bargains
Non brand food
Cut meat to a couple of times a week
Look for offers
Do cashback
Shop around for utilities
Cut subscriptions
Have freeview
Consider going down to one car
Sim pnly phone deals
Trips out to parks/free museums
Try to walk more
Don't use a dryer
Turn lights off/ limit showers/limit heating

Please read up on things properly,

Funded hours can often be used on before/after school clubs, holiday clubs etc

Thanks @Sonora25 and @RhubarbGingerJam , I am definitely lacking in the knowledge department. I get confused and overwhelmed and often misunderstand - the joint income over £50k, believing you could use free hours over the holiday period.

Thanks everyone, I appreciate all the responses

You can get child benefit, the £50k limit is per person not joint. I'd look at extending your mortgage term to reduce the monthly payments - yes it will mean more interest overall but better you can afford it. Otherwise, look at working evenings or weekends when the other parent is around for childcare.

Work more

If you haven’t yet signed up for a new mortgage rate with your current provider - try a IFA, and they might get a slightly better deal for you. Granted it won’t solve the issue but it might make it slightly less painful. Then try to hang on until school age? Maybe pick up part time evening work?

We bought a house that was very comfortably affordable for us, cost was £95,000, mid terrace ex-council house, not in the south east. We have a similar income to the OP and we paid the mortgage off last year, seven years after we moved in.

It could be the OP lives in a much more expensive area so either the south east (which would make moving difficult if there lives are based there) or in a desirable area which would mean they could look at living in less desirable locations within the same general area if they can't afford where they are.

I know quite a few of our peers turned their nose up at our house due to it not being in a particularly desirable area neither quaint countryside or hip and urban. Many preferred to over stretch themselves on a mortgage they could barely afford prior to interest rate rises or stay renting into their 40s. Many now are having to reconsider their options as they can no longer afford their mortgages or rent.

I see it all the time people complaining about the cost of housing in our area but they are 9 times out of 10 referring to the cost of houses in flats in the nicest and most expensive areas where everyone would like to live if they could afford it and they don't want to consider less expensive areas because they aren't as nice or cool as their preferred locations. People need to get real about what they can actually afford and stop moaning about not being able to afford to live in the nicest areas where in fact only a very few can afford to live.

Yup!. Doing these 2 should solve the problem

Look at jobs cleaning offices in the evenings, it won’t cost any childcare!

@whathappenedno
Yes I did mention it costs

We don’t live in a posh or desirable area, it’s not great, but we could move to somewhere very rough which would be cheaper. We can’t move up north as someone else suggested as my husbands job is very specific and it’s available anywhere else in the U.K. except for one place which is even more expensive than here with no salary increase.

So we are real, thank you. We are not living beyond our means as we could afford to live here up until now. I’ve admitted I’ve been naive and will look into moving into the rough area. I didn’t want to as I worry for my son growing up which is why I said I feel like a fucking shitty parent, but needs must.

Please take your judgment elsewhere, I’m already sat in tears, I don’t need you telling me off on top of it.

Can you work from home. It's not ideal especially as your child is only 3 but if it means saving on wrap around care it might be doable? Or even do a couple of days a week at home, partner does a couple of days working from home, one a day at week pay for wrap around care?

£20k full time is a very low salary, for context minimum wage from April for over 23s will work out as £20.8k for a 35 hour week. If retraining isn’t an option is it possible to progress within your existing role/sector? For example, if you are a care worker could you work towards progressing to care manager? Even changing to the same job at a different employer usually leads to a pay increase.

In the short term, if you can’t afford the new payments then one thing you can do when remortgaging is extending the term back out. So say you have 10 years left, extending it to 15 years again. That brings the monthly payments down although costs more over the life of the mortgage.

@MonsterTrunk be realistic about the costs of moving home though - it may be a false economy and take years to balance out. Conveyancing fees, stamp duty, removal costs etc can cost a fortune - we worked out that it would set us back £12k because we'd also be paying an early redemption fee on our mortgage.

Have a good read of the MSE website and get acquainted with what you're entitlements are. Are you claiming UC?

Sounds like you've already done the obvious things. You're probably both due a, pay rise, but probably won't get it unless you move job when they have to pay market rates to recruit.

Absolutely speak to mortgage adviser. Extending the term so you pay less for longer or releasing some equity to tide you over until kids don't need wrap around care.

This list only be temporary, it feels like half the population can't afford to live, something will have yo be done.

I think you will find that I say in my OP that if a person lives in a generally expensive area then it would be difficult for them to move. Try reading properly before you go on the defensive.

I’ve never learnt more than that. I’ve just figured I’m not worth anything more to be honest.

I currently earn minimum wage in my part time job.