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How bad could this potentially get?
Katem
Posts: 126 Forumite
We have a potential financial "situation" arising and I need to know what *may* happen if things don't improve.
Partner was made redundant from a well paid job. We have a large mortgage and quite a bit of living expenses plus three children. Obviously we have cut down massively but there's no getting away from the fact that our mortgage is very big.
At the moment there are no jobs for my partner, despite huge effort on his part. He has done some consultancy work for a while which excluded him from contribution based Jobseekers allowance and excludes us from any benefits, as well as his redundancy payment. This consultancy is now drying up with no sign of anything on the horizon. We do have some savings. As he was doing some consultancy the MPPI on our mortgage wouldn't pay out for redundancy as he started doing the consultancy almost straight away after he was made redundant. They then told us that he was self-employed (true) and the MPPI wouldn't be valid so we cancelled it (not much point in paying for something which wouldn't pay out). We do have life insurance and critical illness cover.
Once our savings are exhausted (which won't take long), what could happen? As I see it, we would have to sell our house, but where would we go from there? As we aren't entitled to any benefits and would have nowhere to go (e.g. family etc). Presumably with no income we wouldn't be able to get a private rent?
Somewhat worried, but best that we know the full extent of what might happen and start collecting cardboard boxes to live in
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Partner was made redundant from a well paid job. We have a large mortgage and quite a bit of living expenses plus three children. Obviously we have cut down massively but there's no getting away from the fact that our mortgage is very big.
At the moment there are no jobs for my partner, despite huge effort on his part. He has done some consultancy work for a while which excluded him from contribution based Jobseekers allowance and excludes us from any benefits, as well as his redundancy payment. This consultancy is now drying up with no sign of anything on the horizon. We do have some savings. As he was doing some consultancy the MPPI on our mortgage wouldn't pay out for redundancy as he started doing the consultancy almost straight away after he was made redundant. They then told us that he was self-employed (true) and the MPPI wouldn't be valid so we cancelled it (not much point in paying for something which wouldn't pay out). We do have life insurance and critical illness cover.
Once our savings are exhausted (which won't take long), what could happen? As I see it, we would have to sell our house, but where would we go from there? As we aren't entitled to any benefits and would have nowhere to go (e.g. family etc). Presumably with no income we wouldn't be able to get a private rent?
Somewhat worried, but best that we know the full extent of what might happen and start collecting cardboard boxes to live in
If you haven’t already, join the forum to reply!
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Comments
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Firstly, sorry for the situation you find yourself in. It sounds like a re run of what happened to me 22 years ago.
I can only suggest hubby keeps looking for a job, but takes on whatever additional work he can find. I did an insurance round and magazine subscription selling in addition to my self-employed work for more than two years until I found another job.
Keep cutting costs. Go to Aldi or Lidl instead of Tesco or Sainsburys. Do you work? If not, maybe you should consider getting a job.
Good luck."There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock0 -
Thanks for the kind reply
I was sort of expecting to be given a kicking for being so stupid as to have a large mortgage.
Yes, I do have a job, starting in September. Hopefully that'll be a boost, but even with my salary, we have no way of even nearly meeting our expenses after our savings have been exhausted.
Obviously partner will still be looking for a job, and we already go to Aldi/Lidl and our shopping has been massively cut back - I think it's about as cheap as it could possibly be with a family of 4 adults and a child. Every little expense is pared back and using the tips on here I have managed to save loads per month, compared to how much we were (embarrassingly) spending previous to redundancy.
Our savings could possibly buy us a year, more likely 9 months. I know compared to lots of people that's great, but I needed to know the worst case scenario. Just in case......0 -
This is why my policy is to be able to comfortably pay the mortgage and all bills out of one partners salary amount, despite being able to 'afford more' - just in case the other does lose their job or the worst happens.
This means that if either me or my husband became unemployed, we would still be able to keep a roof over our heads in the meantime.0 -
You need to look at all areas of your spedning to see where you can save money.
If you are a family of 4 adults, are your two children working? If they are, you need to start chargng them rent.
Post up an SOA for help with where to cut costs.Non me fac calcitrare tuum culi0 -
This is why my policy is to be able to comfortably pay the mortgage and all bills out of one partners salary amount, just in case the other does lose their job or the worst happens.
It's a good policy.
But not one many follow. If I had got a mortgage 5 years ago I'd have got the nicest property within my budget at the time (when my partner and I were doing well).
And I'd have probably lost the house by now...
We hit rock bottom in January, completely changed my perspective.
Feel for you OP, falling on hard times is never something you can predict.0 -
Could you do something involving the house to fill the gap?
Take in a lodger?
Move out -rent out the large house for a year or so to cover the mortgage and rent something small whilst things blow over?
Better to lose it short term for 2-3 years than permanently.
-oh and you should post one of those SOA things0 -
It's a good policy.
But not one many follow. If I had got a mortgage 5 years ago I'd have got the nicest property within my budget at the time (when my partner and I were doing well).
And I'd have probably lost the house by now...
We hit rock bottom in January, completely changed my perspective.
Feel for you OP, falling on hard times is never something you can predict.
I see people on these property programmes taking on £2k mortgages and cringe. Yes, it's a lovely house, yes you can afford it now, but what if your circumstances change?0 -
If you will be working then you may well be eligible for tax credits so that is definitely something to look in to.
It may be worth asking your mortgage provider if you are able to switch to interest only for a short while, whilst your husband is looking for work. This and cutting back on all non essentials should help you extend the amount of time you can manage with your savings and a reduced income.
Even if you do have to sell the property at some point you should be in a position to rent somewhere (depending on your income or with help from housing benefit).
Do you have equity in the property?
May well be worth posting up a statement of affairs on here to get some suggestions on what extra cost saving measures you may be able to take.
I am sure that Katem probably wishes that her circumstances were different but don't think others posting about how they feel they've managed to avoid this particular situation happening to them is very helpful to this thread.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
I see people on these property programmes taking on £2k mortgages and cringe. Yes, it's a lovely house, yes you can afford it now, but what if your circumstances change?
By the time I have a deposit for a mortgage (aiming for when I'm 35 if all goes to plan). I'll be so used to budgeting and so fearful of s*** hitting the fan again that it'll never happen to me. But even then, you never know.0 -
Can you do a SOA?
We can help a bit more if we know the mortgage and house value.
It sounds to me like you are trying to come to terms with downsizing. If that is the reality, the sooner you adjust to this the better.0
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