What would you do?

Eliseydoesit

Its looking like my other half and myself are to be made redundant,we both work for the same company. We've worked hard all our lives so unemployment and benefits are going to come as a total shock. The only thing thats really worrying us is the fact that we might have to sell our little house or worse still that it might be repossessed:eek:.

We have 12 years left on our mortgage and we presently owe £86,000 the house itself is worth around £170,000. We would get approx £20,000 in redundancy payments but most of this would go towards paying off loans cards debts etc.
I have an income insurance policy that will cover our outgoings for 12 months. We are aged 44 and 54 we have no dependants and nobody to leave our house to when we die.
The chances of anything other than min wage work is pretty remote but we're happy to do work of any kind so long as we can see out our years in our house.
What options do we have and what would you do!
Thanks for any help/advice

luckyfool

Who is your mortgage with, what rate are you paying, and are you on a Capital and Interest basis or interest only?

Will the income protection insurance you have cover your full current mortgage payments for the 12 month period as well as other outgoings?

Mortgage - you might be able to extend the term if suitable, or switch to interest only in the short term. If you are on the Standard Variable Rate with your current lender, you might want to consider investigating whether it would be worthwhile fixing your mortgage for 4 or 5 yrs, so you can budget going forward, this is assuming you did not want to sell up and downsize or rent.

If you had no other outgoings to credit, and were both earning c. £15k salaries in new jobs, then I think an £86k mortgage would be supportable. Check when claiming your income protection, whether starting a new less well paid job would stop payment of that insurance.

Eliseydoesit

Principality mortgage fixed at 5.99% until 2013, bound to be get out clauses, although I don't know off the top of my head what they are. Income protection stops on getting new employment but does cover everything.We won't have any debt other than the mortgage.Also should have said that we would even sell some of the equity in the property if need be.
Thanks for the prompt response

pennystretcher

...do you have a spare room that you could let? The annual tax free limit is £4250 if I remember it right... Or you could see if your home could be used as a film location...

(good article about film locations etc http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article4219904.ece)

ps. in Budget 2009 they have now promised:"Homeowners who lose their jobs will be given an additional six months of mortgage payments to cover costs while they seek employment"