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.

New min salary from April will put you at just short of £24k for 40 hours or just over £22k for 27.5hrs so looking for a new role may help? Or at least your part time wage will go up a bit more at the very least. It’s all well and good saying it but obviously it’s your life and you will know what will work for you and your family

Please take your campaign elsewhere and stay your own thread about people living beyond their means, I’m not interested.

Yes I will look for a full time position and recalculate childcare costs and go from there. I have seen some free government courses so I might do one and try and retrain

I am sure you can earn more than minimum wage and it's sad to see how negative you are about yourself.

Chat to someone who knows you well about what they think you're good at

I’m not hugely well educated and I don’t have many skills or experience to my name, so I don’t think I’m a good prospect for many businesses. I’m going to try though, there must be a career for me out there

Why do you think that? Employers will always pay as little as they can get away with, nothing personal that’s just how it works. Whenever you change roles you have to negotiate to get the most you can. Like haggling at a market.
Definitely look into government skills courses because those will give you more leverage to ask for a higher wage (but experience does that too even if you don’t have a single qualification!). If you don’t have GCSE English and maths I believe you can also take those for free.

A large flat with two double bedrooms will be less than that and with around 50 000 you will be very comfortable

I really believe there is the right career for everyone out there.

No one has no skills at all, they may just not be obvious to you. If you chat to someone who knows you well, you might be surprised what they say.

One of my close friends dropped out of school early with no qualifications because academic stuff just didn't work for her. She became a gardener and is now worth over a million because she runs a great landscape gardening business. Not saying you will definitely become a millionaire but there will be something that suits you

Unless dh earns over £50k you will get cb

I don't know if they will back date it ?

How old is your child ?

Not sure what you do as you don't want to say but if did full time and that's £20k it's obv not paying well

You don't want to increase hours due to paying childcare

Tho unless you earn £7/8ph so under nmw which obv is illegal - even if you earn £11ph nmw and have to pay a cm £7ph you are hopefully going to earn £4ph diff so will be extra money each week/month

Many people I know have extended their mortgage and even gone back to 20-25yr after paying it for 5-10yrs as payment so high

It's not forever

You can over pay and once child at school /less childcare to pay - you can over pay

It's not ideal but better then moving costs to a cheaper area and going to a one bed place

Equally once dh is home you go out and do an evening job whether cleaning pub sains shelf stacking macdonalds etx to earn extra money

Get a weekend job rather than upping your weekday hours to FT. Not ideal by any stretch at all but you'd not have to pay any extra on childcare.

We were saving for a bigger house a few years ago and I was a SAHM at the time. Took on one evening a week after DH got home and one weekend day in order to save.

Hi OP, don’t be negative, lots of options here before you move to an unsafe area. Work more, get a part time (evening/weekend) job, claim all your benefits, look for better paid work etc. plus in a year your DS will be at school and you only have to pay for after school care (which in my area is £15 per afternoon).

even if you did the occasional evening babysitting, you could earn £50 extra a week for example.

It’s very sad but I think the reality is £50k is not enough for a family to live on now.

I don’t know why people always suggest downsizing - moving is expensive and you’d spend close to the saving of mortgage interest. Especially if you would want to upsize again in future!

Also please get someone to help you understand all the benefits you can claim.

Totally depends where you live. I'm in the south east, not a particularly nice area, & flat with two double bedrooms is easily £1400+ per month.

How seriously have you looked into retraining? Not all training requires a financial outlay. Good tip is to research which jobs are in reasonable supply near you, with the wage you need and work it back from there to see exactly what the impact of retraining would be.

Never understand why people just say downsize as if buying/moving house is a simple stressful and cheap solution ..because it isn't.

Op you need to stay calm and ignore most posters.
Speak to your mtge company and or broker. There are things they can do.

The 50k limit for child benefit is on individual salary, not joint, IIRC

OP, definitely take on board about putting some time in to researching things - the Money Saving Expert website is great, they have a "money makeover" & budgeting tools which could help you save on your outgoings & lots of info on things like child benefit, tax free childcare etc.

My DC is with a childminder 4 days a week, & that costs me around £850 a month after tax free childcare. I earn more than minimum wage, but if I was earning minimum wage for 4 days a week I currently work I'd take home around £1250 a month - so even with childcare costs, increasing your hours could be enough to close the gap? Especially if you are eligible/will soon be eligible for the funded hours too.

If you can work around your DHs hours & not incur childcare costs then that would obviously go even further, but childcare doesn't have to cancel out your earnings, even on a lower wage.

Also, instead of saving for the roof, if its urgent (as it sounds) it might be worthwhile seeing if you can extend the mortgage term & borrow a bit more, so you can get it fixed ASAP (before it causes more issues) & then you will only have the mortgage, rather than the mortgage + trying to save up. It's not the most cost-effective option in the long run as you'll pay more interest over the life of the mortgage, but it might help until you are out of the tough childcare cost years (at which point you could overpay to reduce the term).

Bar job, Friday and Saturday nights, or Sunday lunchtimes. You could do 8 hours a week at £15 gives you the extra £480 tax free without needing child care.

If your dh is making any pension payments at all, you'll still get all your child benefit which is nearly £100 a month.

I've cut back on everything to make mine work. Food for me & teen DS is £60 a week. No alcohol. Heating is off all day if I wfh, wrapped in a blanket. Positively tight-fisted on clothes. PAYG phone. Minimal broadband. No subscriptions, ParkRun instead of gym.

It's only for another year, and then your dc will be at school and childcare costs fall.

There is ever so much you can do if your basic lodging start eating up all your income. How are you going to fund the rest of life's needs? Time to downsize anyway you are able to

We both work full time and DC3 went to nursery full time when she was little. With 30 hours funded and using tax free childcare it was much cheaper than me missing out on my salary.

Now she is older and at school, we use after school club and holiday care, again using tax free childcare. And again, I earn more than these things cost so we are better off. Plus, my pension etc.

I work in the public sector and have made this work. Working full time is the one thing you could easily do to increase your income and should look into.

I enjoy working, love my job and none of my DC have missed out on us working full time and am extremely close to the older ones who don't even remember me working when they were little and at school as I always took leave for sports days etc and we made the most of our holidays together and weekends.

2nd job to do evenings / weekends, ironing, cleaning, bar work, night receptionist etc? It's shit but it will get easier once you aren't paying for childcare.

There's a few options - work in the evenings / weekends (a friend of mine does some taxi work, another delivers takeaways), move to a cheaper area (£1300 a month for a mortgage on a tiny house must be quite an expensive place!) or make some more drastic cuts.

We got rid of the cars on finance, I did a bit of work for a friend's business in the evenings and DW took on a few hours over the weekend at work - it all added up.

Good luck

You’ve already answered the points about child benefit and the 30 hours funding @MonsterTrunk but I haven’t seen you respond on when people have asked whether you’re using the tax free childcare account? Using this system means 20% of your childcare would be funded by the government.

I agree with the comments that moving house/ downsizing isn’t the best option due to the costs involved, and I expect renting is more expensive than your mortgage- it is here!

If your child is in nursery and using the 30 hours, it must only a year or two before they go to school and childcare costs drop. We had a similar income and the nursery years were expensive, but we managed to live frugally for those years. It must be harder now with the cost of everything going up.

Well at current we aren’t using any more paid for childcare as it’s now free but I didn’t know about it previously so we never got the money off.

Im so uneducated about all of this stuff.