£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’ve got two different issues here, one is the financial side of it and then the other is obviously anxiety. You will financially deal with this and over time you will most probably find that these things tend to come in clusters and probably it will all settle down now, if it doesn’t you will cope with it. It won’t just keep going like this relentlessly.
I would speak to the GP. I was having an awful time and got put on antidepressants last year and my intense, totally rational and debilitating anxiety suddenly stopped, even though I was still dealing with the horrendous situation which had caused it. That sort of chronic anxiety doesn’t help your problem solve, it just gets in the way. I wish I’d done it sooner!
You are clearly resourceful, capable and sensible so you will deal with whatever happens, but your body might need a little bit of help right now.
And keep an eye on catastrophic thinking, again it’s just not very helpful x

15 quotes! Well done for achieving that alone, seriously.

OP you are going through a short term difficulty and stress. You are obviously good with money and responsible. Once this repair issue is fixed, you are in a good position to earn extra money through a lodger and build your savings up again.

If you have other people saying it should have been obvious that there was an issue with the roof, then you've got a good case to sue the surveyor. They should have professional indemnity insurance which would pay for this. Insurance will not cover the roof (they are there to cover accidents that cover damage, not ongoing issues caused by bad workmanship) but check if you selected legal cover and if so, check with them if they can help as it will help prevent further damage. If not, see if you can find a solicitor to help (and see if they will do it on a no win no fee basis). If they get a solicitors letter they will have to pass on to their insurers rather than just telling you to go away.

In the mean time agree that a loan is the only viable way and then after you can look at ways of maximising your income eg lodger. If you've done new boiler and kitchen there aren't many other large expenses that can go wrong that aren't covered by insurance (eg leak) other than fencing blowing down in wind or car breakdown. Also get a number of quotes for the roof.

It feels rubbish now but this is exactly why you saved and you will build it back up again

This I think. I often feel that just when I have money to spare I then have a huge bill and it is "unfair". But really it is nothing to do fairness etc - it's good I have the saving a because the cost would have happened anyway and I am only able to pay because I was sensible.

Well you have certainly done your home work. Get the roof fix as soon as you can.

Then see if you can claim for the water damage on your house insurance. Which maybe an option 🤔.

Then look at ways of increasing your income, including a lodger if that is a feasible possibility.

So take one step at a time. I know it can get quite stressful when you run out of savings (we've been there) but you will get back on your feet.

I would also look at a more traditional mortgage when you have a few more years under your belt with your business as it would give you more flexibility in the future. But you may have to wait a couple more years, I know my sister and BIL had this issue getting their First mortgage as he was self employed.

Good luck OP and I hope you get everything sorted out.

It sounds like you can't really afford to be a hom owners if you had to borrow from family. Millions of people are self employed home owners, of course it would have been possible to get a commercial mortgage. You can sue the surveyor absolutely otherwise why do we bother with surveys? Also your insurance should cover the damage caused by the leak, unless you had a third party policy. This is all fixable, but you need to make informed decisions. We are both self employed our mortgage is with virgin money. We used Charcol as the brokerage

Deep breath.

You will get through this.

I bought a 1930 house last year and the surveyor missed many things but there are so many caveats in survey reports that he got away with it even when I took him to the Ombudsman.

Unexpected costs included: new boiler, complete rewire, replacing some of the guttering and a broken kitchen gully outside, drain survey, leaky radiator, asbestos survey...and then I came home one day to find water pouring down the ceiling. Turned out the loo cistern had been leaking for month and the water ended up flooding parts of the ceiling...insurance paid up but I still needed to cover the excess. All of this happened in my first month of owning the property...

I thought I would never get through this but I did and a year later I am in a much better place and saving hard as I assume sooner or later my roof will also need work.

My point is there are always solutions even if you feel like things are hopeless.

People have made good suggestions: a loan if you can't get a mortgage, increasing your income with a second job or maybe even putting your freelance fees up, taking on a lodger...

But the priority is the roof so use your credit card and a loan, then work out a plan to start saving again.

Just to add - you seem very clear and logical. Like people are saying break it down into stages and focus on each next step.

I don't know re the surveyor - worth considering but there seems to be an additional cost to it so it is a balance.

If it were me I would be trying to protect my equity - but I am at a stage in life where I am focused on retirement and being mortgage free.

Keep your cool. Your savings are for things like this. If you are financially sensible you will build them up again slowly. Refuse to panic.

Of course she can afford to be a home owner she managed to save 50% equity and she's just borrowing from family and paying it back monthly instead of the usual route of having a mortgage from a bank.

OP I know you have a mortgage deal with your family but you may be able to essentially take a "second" mortgage out with a bank considering your huge equity and they will see a £20k mortgage as nothing.

Then maybe get a lodger in to help pay off the second mortgage. Xx

I don’t think that financially you sound too badly off and you obviously have supportive family . The issue seems to be your anxiety about having no savings and the what ifs and frankly that is how lots of people live so get the roof done and get some help / counselling for your anxiety about money . The problem is you are used to having savings and it is stressful when you don’t but you need to look at your house and remember that that is your savings and your asset . Also once you’ve done the roof there isn’t much more that can go wrong ! Best wishes @badmoneyluck , you can do this and get back to saving so don’t let anxiety make you catastrophize every thing .

Would they give you a repayment holiday?

It must be scary when you're used to having money set aside, but this is why you had the £20k buffer.

Overall you're doing a lot better than many people.

You own your home.
You are working.
You're not ill and have no reason to think you will be. (Maybe look into whether there's insurance cover that might make you feel safer on this).
You gave supportive family that are willing and able to help you financially if needs be.

If more unexpected bills come in, you'll just have to do what other people do and take on debt or go without or sell up.

You're far from ruined.

Is the surveyor a member of a governing body you could contact regarding a claim? Might be listed on their website. Or you can also contact Citizen's Advice re. your rights on the survey. I've found them very quick and helpful for any any legal type advice.

If you’ve been in the house two years and SE then surely that brings you into a mortgageable bracket by now? Get the mortgage on a higher ltv (eg 80%), pay the ‘private mortgage’ back and just have the one loan. Worth at least speaking to a broker if you’re this stresssed
find a better paying job rather than increasing hours
take on lodger though tbf I’d hate this but needs must perhaps?
additional long term loan for the costs you have now to ensure you cover it all and know exactly what you need to repay.

a horrible run of bad luck

Can only empathise over the useless surveyor. I had similar— pointed out some tiny, cheap to fix things ( garden fence panel!) totally missed a huge thing he should have seen. And you can’t claim against them afterwards.

Can only suggest rent a room, it’s largely tax free I believe. And if you put a fixed time in it, say a year, then it’s a means to an end.

I am sure you could get a mortgage with 50% equity.

I know you said you needed three years' accounts but a 50% mortgage is much less risky for a lender than the usual 90% or so.

I think you are being too negative. There are solutions here.

Replace the family loan with a mortgage

Take a loan for the roof

Get legal advice about the survey

Contact your insurer

@badmoneyluck

if you were a nice person, the water issue wouldn't have stopped me renting a room off you. Obviously it would have needed to be cheaper than rooms to rent in pristine houses, but I would have been happy to increase payments as the house improved.

Don't discount the idea now.

ive read everything you've said about your mortgage situation, but when you hit the 3 years, you should definitely try again. I know your books don't look great, but your savings history looks great, even on that. It's worth trying. Ask around for the best broker for SE.

Will the £10000 cover roof repairs?? I'm a knock it all out & start again person. But somethings I should have just repaired 🙇🏻‍♀️

with the survey, proceed as others have advised. Hopefully you'll end up with some money.

hang tight, as bad as it feels right now, you're still in an ok overall position

That's pretty much home ownership - saving money and having to spend it when something else breaks - again. Sorry.

As others have pointed out you are in a pretty ok position even though it feels scary.

Get the roof done first, then breathe. Everything else can wait a bit.

You're not in a bad financial position overall, so don't panic. There are two main issues:

1. Your current cash flow, you do have short term options. You could take out a loan or a credit card. You could look at transitioning your private agreement to a mortgage and release equity. You are not immediately about to go under. Also don't forget to check if you can claim UC if you have no savings.
2. Your long term income. This is a bigger issue. By the time you account for employment benefits like holidays and pension you're probably making about minimum wage. That's going to mean things will always be tight. You definitely need to consider a lodger even if that means initial outlay. Then you need to look at how you can earn more in the long term - career development, retraining. It's great that you enjoy what you do but it's not going to give you the financial comfort you need.

I dont see the issue here tbh. It seems you are doing everything to avoid having a mortgage that would make life so much more predictable for you. Is there a reason you would rather borrow off family (Other than to save interest).

You have proved you are good with money and you have good equity etc. Just work out how much you owe family and how much to clear the costs and take out a mortgage for the full amount over 25 years. Pay the family back straight away saving you that monthly cost and it probably wont be much more for the balance on the mortgage. Get back on top of things and make sure you have a mortgage you can overpay and clear quickly.

Job Jobbed. Dont owe family anymore. Probably not paying much more monthly and back in control of finances.

Once the roof is done , the other repairs can be done more slowly , A dehumidifier will dry the house out and roof and heating are the two biggies . If you think of this in terms of years rather than the here and now , you haven't made a big mistake . it's just a really unfortunate run of events and will get sorted in time. If it's dry you can live with cosmetic damage for a while , use stain block , repaint etc .

Juts because you couldn't get an initial mortgage doesn't mean that you wouldn't be able to get one now that you actually own the home and have a large amount of equity in it. Plus you've been working for yourself for longer now.

Your post is why financial literacy needs to be taught in school from primary to college. I can’t believe the decisions you’ve made here

If you had a full house survey done you might have a claim against the surveyors. Or neighbours actually did this because a problems with the windows had been missed and they were successful. It's a bit of a pain but it might be worth looking into

And it's nothing to be ashamed of. Most of us would be either wiped out or see a very significant drain on their savings if faced with unexpected costs like that and loads of people just wouldn't even be able to start paying it