NR - What a mess!!

st@rdust

Hi,

me and my partner bought a flat in nov 2007 the flat was valued at 94,000 and we borrowed 105,000 in total on an interest only from NR we are n neg equity and our fixed rate runs out in nov 2009 over a year i know but ive just found out IM PREGNANT!! so will be on materenity and then only returning to work art time we are really worried now as when the fixed rate ends we cant afford the rates we pay £670 a month now on interest only and im so scared about bieng homeles with a baby.

We have some debt (see siggy) and are already finding it a struggle we should be back on our feet by xmas tho but can really afford to pay extra off our debt or even to save to prepare for the high intrest to maybe bys us some more time. I dont want to get rid of the baby because of the finacial mess and cant wait to be a mum but im so worrie about the future as me and my partner can live without but i cant do that to a baby.

ANY help or advice is really appreciated.

Thanks .... Sarah

Conrad

All I can say is spend as little as possible.
In my job I meet people on £15k pa that have lots of savings and no debt, whilst at the same time I meet people on £100k with lots of debt and no savings. One girl on £16k pa has repaid 2 largish mortgages and shes only 30!

Our cautious clients are natural savers that dont seem to be taken in my TV adverts, or designers trying to make thier families even richer by flogging thier clothes to sheep that just line up and do as they are told.

They dont buy all the brand new baby paraphenalia (sp), but buy from the local paper.
They make stews, dont eat Macdonalds, they eat well for less, and not Mums gone to Iceland chavvy junk food.

Importantly they also dont fritter money each day. The fritters dont realize how much they pee away every day on cans of coke, magazines, snacks, hair products, dvds, travel and so on.

It really is a case of learing to live cheaply, and not buying that Mamas & Pappas £250 pushchair - knowone really cares what a pushchair looks like - if they do, they aren't worth knowing.

Best of luck, dont get stressed as your baby may be affected by the stress chemicals / faster heart beat and so on.

Dont worry, it;'s always realy hard, but if you keep focused you will be fine.

I think mortgage rates will fall.

Ian_Griffiths_Halifax

You can't have taken an Interest Only mortgage of £105,000 on a £94,000 house, so I suspect that you have the Together Mortgage which is an Unsecured Loan (on a Repayment basis) and an Interest Only mortgage on the Mortgage element (max 95% or the purchase price).

You have until Nov 09 to plan so I would suggest you start making adjustments as Conrad has said, starting now.

When the baby comes along, you would be able to take payment holidays so long as you haven't been in arrears.

Once you've been with them 9 months (you've already done that) you would be able to miss one payment (you have to ask them for the holiday, don't just cancel your direct debit) and once you've made 18 payments you can miss 2 if you haven't missed a payment within the last 12 months, so save up your payment holiday facility until you really need it. Once you've made 27 payments you can miss 3 but that's the limit if you haven't overpaid in the past, but I suspect you will need to have used the holiday facility before then.

Start shopping at Aldi/Lidl/Freezer shops and 2nd hand shops. You'll be surprised at what you can find and they aren't always used. You may even be able to earn some money by buying some stuff and selling it on ebay when the baby has grown out of it. What's better than buying stuff for next to nothing then selling at the same price or maybe a bit of profit once you've used it?

Make sure that you apply for Working Families Tax Credit and Child Tax Credit as soon as you can and visit the Benefits pages on here.

Good Luck.

meester

Sarah_lou_21 wrote: »

Hi,

me and my partner bought a flat in nov 2007 the flat was valued at 94,000 and we borrowed 105,000 in total on an interest only from NR we are n neg equity and our fixed rate runs out in nov 2009 over a year i know but ive just found out IM PREGNANT!! so will be on materenity and then only returning to work art time we are really worried now as when the fixed rate ends we cant afford the rates we pay £670 a month now on interest only and im so scared about bieng homeles with a baby.

Is the maternity pay lower than your current salary?

It's a bit early in pregnancy to be considering such things, but after the baby is born you will get a fair few benefits (child benefit, tax credits).

We have some debt (see siggy) and are already finding it a struggle we should be back on our feet by xmas tho but can really afford to pay extra off our debt or even to save to prepare for the high intrest to maybe bys us some more time. I dont want to get rid of the baby because of the finacial mess and cant wait to be a mum but im so worrie about the future as me and my partner can live without but i cant do that to a baby.

From your other post

http://forums.moneysavingexpert.com/showthread.html?p=12602809#post12602809
it looks like you have a fairly healthy joint income, you just need to control your spending.

My income used to be about £1600/month net, with £850 rent, and a child, and we paid off our £6k debt in a couple of years.

Your total debt/rent cost of £820 is very manageable.

You need to keep much better track of what you are spending, because you are spending too much. I used Microsoft Money, and everything we spent went into it, at the end of the month it shows spending by category, and spending versus income. Most of the time income exceeded spending, and I'd review each cost to try to reduce my spending (e.g. I'd nag at my wife about the cost of her phone bills and try to find cheaper phone solutions). We didn't have any satellite TV, mobile phone, car, etc.

You've got a pattern of spending more than you earn (e.g., borrowing well over the price of your flat), and it needs to STOP. Unfortunately it can be quite difficult to reduce your lifestyle, but you have no choice.

mooseandhobbes

Hi Sarah_lou_21

Most important thing - Don’t panic.

People can and do live very economically and bring up perfectly happy and healthy children on a tight budget. Don’t be conned by advertisers into thinking that you’d be a bad parent if you child doesn’t have all the latest price-inflated baby blah. It’s just not true.

I think that you should try to pay of as much of the loans as you can before the baby is born, and while you‘re still earning a full salary. Baby equipment is probably not that difficult to come by without having to pay full whack , as there are always people looking for homes for things that their child has grown out of. You might not even have to pay for some things. For example, right now on my local Freecycle (http://www.freecycle.org/), there is a drop-sided cot being offered. Cost = £0. Check you local free papers and cards in the newsagent windows too.

You can also eat very well without spending a fortune. Concentrate on buying only the food that you actually need to minimise waste and unnecessary expense. I have found that for fruit and veg, my local grocers are around half the price of supermarkets. The supermarkets would like you to believe that they are the cheapest, but don’t believe the hype.

As the others have said, start making adjustments now. You may even be pleasantly surprised at how we can do without a lot of the stuff we accumulate. We don’t really need half the stuff we spend money on. Half the time, we don't even really want it!

I wish you all the best and hope that it works out for you. Keep posting on MSE for advice and encouragement. This really is the BEST site.

Mooseandhobbes x

teapot2

Hi SarahLou21,

I'd agree with earlier poster, it can take a bit of adjustment but it is do-able to live on less. Start immediately by paying off what you can now and planning - hopefully this will help the panic to subside a bit.

Read some of the other boards on here - the old Style One has lots of ideas re shopping and budgeting and saving on food costs. Maybe post an SOA on the debt free board if you haven't done so yet and get ideas on where to make savings now on your outgoings.

Like MooseandHobbes I'd also recommend Freecycle as a great place to get equipment and clothes for a baby and once they are outgrown you can Freecycle them to someone else. Or maybe you have friends who can pass on used stuff to you? Try not to stress too much [easy for me to say] and remember there's lots of help available here so you're not on your own.
Teapot

pm2326

hi, just wanted to point out that aslong as you have not been in arrears you can apply for 6 months payment holiday on your mortgage to coincide with your maternity leave.

but you need to understand that you will still be charged interest so the mortgage balance will increase over this period, the same thing happens with a normal payment holiday (mentioned earlier)

neverdespairgirl

Conrad wrote: »

It really is a case of learing to live cheaply, and not buying that Mamas & Pappas £250 pushchair - knowone really cares what a pushchair looks like - if they do, they aren't worth knowing.

£250? Dream on, you can spend £700 on a pushchair without even trying (-:

We bought a Maclaren, pretty basic, and it was perfect, not heavy or bulky, but toughly made and useful.

Ian_Griffiths_Halifax

neverdespairgirl wrote: »

£250? Dream on, you can spend £700 on a pushchair without even trying (-:

We bought a Maclaren, pretty basic, and it was perfect, not heavy or bulky, but toughly made and useful.

Does it hug the corners at 110 mph

st@rdust

Thanks for all the replies, the advice is always great here, i havnt missed any mortgage payments and have looked into the payment break option were going to miss a payment in nov and use the money to catch back up to speed pay a few things and make sure where not behind anymore, yesterday my dad took me to a cheap fruit shop which sells almost out of date stuff and i made some lush soup and peas pudding were gonna do our shop next week and im going on a tight bdget to get as much as poss..... Things dont look so good at the moment but i think ive hit the bottom and could be on my way back up the thing i was most worried about was not bieng able to get a new mortgage in nov 2009 and having to ride out the huge rates with NR or loose our home, i also checked my credit file (one of martins tips for free yey) and it looks ok only one late payment showing on it everything else looks ok. Am i better saving money into an account to use as a deposit for when my rate runs out or paying the debt? thanks again everyone

st@rdust

PS - on the bright side my BF has some bank charges he is waiting to get back and we have some money about £3 grand off a car accident coming hopefully soon..... i dont like to count these until there here tho as until its in my bank its not mine