£20k of unexpected payments in 9 months... feel like I'm going under

[badmoneyluck]

New username as I feel so ashamed to be in this position.

I've had 9 months of back luck after bad luck which has completely depleted my finances. I was always known as being such a good responsible saver with loads of savings but I've had £20k of unexpected costs so far this year and I'm now absolutely ruined. I'm not on a high wage, about £35k per year before tax, and self-employed so no protection.

Maybe it's my fault somehow but it all feels like bad luck and bad timing.

I bought my first home just under 2 years ago. I had done so much saving I was in a position to be a cash buyer (I put in 50% of costs and a family member loaned me the other 50% which I am paying back monthly). I got the L3 survey like you're supposed to and it picked up nothing significant. I kept £20k back to ensure I had some savings and a bit of money to do cosmetic changes.

Then in January I had to get a new boiler as mine completely broke (approx £2k).. then even, worse water started coming through in almost every room in the house and it turned out the roof had been badly constructed but the surveyor hadn't picked it up. A whole new roof is needed and because of the attic conversion, which makes it more expensive, it's going to be £15k.

I've already been having constant sleepless nights about how to cover the cost. The work needs to be done asap because it's causing more and more damage internally. Then today I've had a sudden dental issue which is also going to cost £500+ The unexpected costs just keep coming. My anxiety around what costs are coming next is unbearable.

Much of the original £20k savings is gone because I spent some on the new kitchen before the boiler and roof issue came to light. I've found family members who are willing to lend me up to £10k which feels horrible but is essential. Even then though I will be left with £0 in savings (excluding my tax money which I have kept aside) and completely vulnerable to anything else happening. I'm self employed so if work dries up or if I'm unwell no money comes in which always made savings so much more important.

I'm just at a complete loss of what to do and terrified for the future. The surveyor accepts no responsibility so can't claim any more from them. It will take me forever to save the £20k again as my outgoings have increased so much with the house and I'm just terrified what's coming next.

I don't understand what I did to deserve this.

You can get a mortgage? Depends on how much you're paying your family member back but a mortgage over 25 years may be less per month which would help now.

You're in a good position on the long term really. Good equity.

Can you focus on increasing income? You must be a good saver already, keep applying the same principles and you'll get back on your feet.

I'm really sorry to hear this.

Does your home insurance not cover the repair work? Apologies if I missed this.
Possibly worth looking into whether the surveyor is liable - they should have insurance so it would be their insurer paying out, but of course it depends on the details of whether they were actually negligent.

Sounds like it's worth seeing if you could get a mortgage - you might not need it but it could give you some peace of mind that you have access to money if necessary.

Oh god. I'm no help on financial matters I'm afraid, I just wanted to post for moral support. That is awful, what a shit run of much. I'm so sorry.

I’m sorry to hear you’re so stressed. You need to breathe and take a wider perspective - you are in such a good position compared to most first time buyers OP. 50% equity is amazing.

as others have said, I’d get a mortgage.

Thank you but the payments to the family member are essentially a mortgage in terms of the legal agreement and their size.

I have been working all the hours I can since I found out about the roof 5 months ago but I'm starting to burnout and then had to take time off, so I think I need to have a balance. It's not something I could sustain long-term.

I know there probably aren't any answers other than spend less and earn more but just feeling so low and anxious about more costs coming

50 per cent equity on house owned for less than two years? Get a mortgage!

Thank you but the insurance won't cover it. It seems like they'll only cover damage.

I tried to start a claim against the surveyor but they shut it down pretty quickly. The problem with these L3 reports is that they have so many caveats in there's no way of challenging them if they miss something really.

I'm not sure if I could get a mortgage. Because from a legal / financial point of view the repayment agreement I have with the family member is essentially a mortgage. And I also couldn't get a typical mortgage in the first place because of being self-employed, hence the cash buyer thing

Can you renegotiate the terms of your loan repayment to your family member? They probably have your best interests at heart and could maybe take a lower monthly payment to allow you to save more.

Feel like I need to stress, I can't get a mortgage because I think technically they class the agreement I already have as a private mortgage (i.e. from an individual rather than a bank).

And I'm also self-employed and couldn't get a traditional mortgage from a bank in the first place which is why I went down this route.

Get a mortgage, get a lodger or two, take in foreign students.. you've got plenty of options.

I can't take in a lodger until I get the roof done and then fix the damage to the place from the water leaking.

It's just weighing things up, like whether it's worth trying to get a loan to cover the cost of fixing a room to take in a lodger.

TBH they're the one already lending me the bulk of the £10k for the repairs and they can't afford to do more :(

I know there are limited solutions for this situation but I'm just wondering how people protect themselves against unexpected costs like this.

Because my biggest fear is that something else is going to come along.

It just feels like costs like this can happen, especially if you're a homeowner, and somehow you just have to get the money, even if it's a huge amount.

Hi,
You should be able to get a loan - as you are self employed the best place to try first would be who you have your current account with as they have an existing relationship with you and can see your income.

My husband got a 20k loan from HSBC (who he banks with) and it was in his account pretty much instantly. If you take a loan you can pay for the roof but still have some savings for peace of mind. We're paying £300 odd a month for 7 years. The loan appears in his banking app so it would be possible to make extra payments to cut the interest down if we were in a position to.

I know you don't feel like it right now but you are doing really well financially - getting your own place with 50% equity. This is a glitch but you can get through it.

As others suggested try to get loan from your bank. You could also take out a 0% credit card and use this either by taking cash up front (there will be a fee for this but still cheap debt. Or use it for all purposes to help you build up cash

Is self employment working for you? An income of £35k for 'working all hours' isn't great as a NMW employed job would pay nearly £24k for a 40 hour week and you'd get paid holidays, pension contributions, sick pay entitlement etc.

What would you earn if you worked for an employer? Would you be able to do a bit of self employment on the side to top up your income?

You should have got a mortgage in the first place rather than taking money from a family member to be honest. That would have given you more flexibility and meant you could have released some equity. It's not too late though. Take out a 60% mortgage, repay your family member and use the rest to get your house in good order.

And to be honest most people use loans or credit cards to pay for unexpected things like this. Sometimes not ideal but it's what they're there for. Do you have an issue with taking out debt given you also don't have a mortgage?

As others have says, get a mortgage. In fact get a mortgage for the whole thing and pay off your family member too.

it’s what 99 percent of the house “owning” population does. You have 50% equity, you are by no means broke.

hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-to-complain-about-your-surveyor/

Are you sure you can't pursue this? It doesn't just stop with your surveyor. Read the report they did again. Can you get some one to give a second opinion on whether the roof issues should have been visible on inspection?

Frame it differently. If you had not had those savings to deal with those emergencies you'd be far worse off. Isn't this one of the reasons we save, to deal with unforseen events. You'll be able yo build up some savings again eventually.

Is there no room at all that's liveable? A lodger would be a good shout as it's tax free to a certain amount.

Have you got legal expenses cover on your home insurance? Worth checking in with them for a proper legal position on the survey. If they think you have a chance of winning they will take it on.

This is what you need to do. Self-employed people get mortgages all the time. With the equity you have it won’t be an issue for you to get a 60% mortgage, clear the debt to your family member and get your head above water.

There really isn’t any need for you to be relying on family to lend you money.

I don't really understand why you can't get a mortgage as there are thousands of people self employed with one. Go through a mortgage broker, they will be able to assist you.