If you own your house

[rainbowbaby2]

If you owned your house outright but struggled with daily cash flow, what would you do?

Equity release is an expensive mortgage. You could take a mortgage on your house and invest the lump sum and take the income.

You could still the house and downsize.

But in reality the easiest thing is for your both to get better paying jobs.
Start now in your new careers and you will eventually see salary growth as you get more experience

You can't really get a mortgage with no income to pay it.

You can rent out a room in your home & earn up to 7k tax free per year

Here is link

https://www.gov.uk/rent-room-in-your-home

Husband should take paid employment, or he becomes SAHD and you go back to paid employment, you need regular guaranteed income with young children

Do the money makeover at monersavingexpert.com. There is also advice about maximising your income as well as minimising outgoings.

If you've got the brains to run a business you should have the brains to be able to live more cheaply for a while.
Lots of people have tunes when they have to struggle. Make a list of outgoings, incomings and where you can save. Look for bargains when shopping, go to cheaper shops like Lidl, Aldi, if Tesco get a club card and. Buy things on Offer. Join a site called Feed yourself for £1a day. If others can do it so can you. We all struggle at times. Sell stuff you no longer need, outgrown clothes etc on Vinted

Spend less money. Avoid getting another mortgage if you can help it

Could he sell the business instead of closing it? That would earn money and there are websites where you can sell it.

This is a really difficult one for you, but I very much doubt you would be eligible for equity release as you are both so young. I would try to manage on a day to day basis for as long as possible using foodbanks, charity shops if necessary in the short term hoping the business will pick up eventually. If you fall into arrears with credit card payments, utility bills etc contact Stepchange for advice who will consolidate your debts so you don't have to pay any further interest, and ask you to repay a monthly sum which you can afford who they will distribute between your creditors over a few years if necessary. The only downside with using this system is that whilst on it you cannot get any further credit, but this may be an advantage. However, in the longer term if the business is continuing to run at a loss, I would consider selling your house and downsizing rather than running the risk of bankruptcy and potentially losing your house.

evening job?

Downsize but whatever you do don't take out equity release. My parents in law were absolutely fleeced. Borrowed 27k ended up owing 90k.

Why should the taxpayer subsidise people that don't know how to run a business (no offense OP), have a stay at home parent and own their own home?

I sincerely hope they do not get UC and are able to get a job.

He needs to get a proper job op

I've no idea if this is feasible or not, @rainbowbaby2, but given that you are both so comparatively young, would it be possible to extend your mortgage term so that you have less to find monthly to pay the mortgage? Would that be helpful, or have I misunderstood or missed something? (I'm old and have luckily been mortgage free for a while, so am happy to be told my suggestion is rubbish.)

Get a lodger

Not appealing to have a stranger in the house with three young children.

If is company gives into demise and it's a Ltd Co, the lease would just be a creditor. If he doesn't have a Ltd Co, it's trickier. Talk to the landlord, get them to seek a new tenant. I think you could get benefits do the assessment on turn2us and find out.

If self employment isn't paying find a different job. Your DH needs to find a job. It sounds like you do too.

Seek out a financial management course to help you too.

Sorry, no idea about self employment etc, but I really think you'd benefit from small business advice.

For budgeting household expenses, Step change is great.
I defo wouldn't do equity release, but I might consider remortgage if I had a decent income.

We ‘owned’ our own house on a massive mortgage when interest rates were 16%. I wanted to be a SAHM but ended up working evenings n a supermarket and childminding during the day.

it was HARD work but it meant I got all day with my DC and we could pay the bills.

No, you've misread. Justonemorething82's referring to the fact that benefits don't pay people's mortgages the way it pays rent, it offers a loan towards mortgage interest BUT she's saying that OP won't have to worry about either of those things [because the house is already paid for].

Also a house with 3 young children is not attractive to many potential lodgers

It can be really hard to accept that a business you've put a lot into isnt successful but unfortunately thats the situation you're in. Self employment is hard! A business needs to bring in prohably double what a wage does (or more really) to allow for unpredictability, not having an employer putting into a pension, & not getting holidays etc paid.

Most people are not suited to self employment. You need to be both lucky, have an in demand skill or excellent idea, be good at running & managing a business, be exceptionally hard working.

You've got 3 young kids. You need at least one regular predictable income. One of you needs to get a full time job.

Self employed here x 2 businesses. The following is what I see with industry colleagues not doing well:

1. Advertising. Don’t expect work to come in if you are not beating your drum via various channels. In our business we find the older folk are the ones with the money to spend so we aim for written advertising in local papers. We do a bit online with links to website and social media pages, but it’s the print media where we pick up new clients.
2. when we started out in a new district, I backpacked the baby and did letterbox drops. Had a hit rate of 1 in 100 houses roughly that I targeted. Grows from there.
3. you (and I) think our DH’s work hard but I could introduce you to another whose reputation is crap, thus no work is coming through his door via recommendations.
4. Sell yourselves. Customers like knowing their trade/shop etc has been in the industry for many years.
5. Feed the business before you spend on yourselves. Pay invoices promptly and not at 20th of month. You will make your suppliers very happy and in turn they may well use your business too.
6. Budgeting and accounting. Have a good team around you. It sounds like you don’t maybe know how to read your business financials so ask your accountant for help. Ask and ask again questions and print these out. Use a good computer book keeping system which can show you reports as to how your business profit is tracking.
7. any business affected by COVID should have bounced back by now if it was successful to start with. Investigate why yours hasn’t. If we knew the industry we might be able to offer relevant suggestions.

wishing you all the very best on your investigative journey 🙂

Are you mortgage free?

Either way, try to keep hold of the house. Moving is very expensive (estate agents, legal costs and stamp duty) also, you may find it difficult to re mortgage if you are self employed and can’t prove a goood income. renting is very expensive and you wont pass affordability checks if you can’t show good regular income either.
write a strict budget and stick to it - beans and rice while you ride out the storm.
Do fun free things with the kids like flying a kite.
Good luck