Any suggestions to help reduce mortgage payments to allow me to be SAHM?

ScarlettsMum

Hi everyone,

I'm here to ask advice to see whether or not it is possible to fulfill my dream of being a Stay at Home mum until my daughter starts school.

I am currently off on maternity leave and can't imagine having to go back to work and leave my daughter with someone else, however that time is getting closer and closer.

The major problem with me staying off work is our mortgage. We currently owe £155,542 at at stupidily high rate of 6.08% which is a fixed rate until 30th September 2012. I would guess the value of our property is in the region of £178,000.

Our monthly repayments on this amount are a staggering £1088.70, which is where the huge problem in me giving up work becomes really apparant. My partners take home salary is £1389.94! It's impossible for us to pay all the other bills etc on his wage plus the child benifits, tax credits we recieve.

I've been trying to find a way we could make this work and have come across a couple of suggestions about changing the mortgage. I'm not even sure if our mortgage company would agree to it but there seem to be a few options:

1. Take a payment holiday - not really an option for us as this is probably going to be a long term problem.

2. Switch to interest only for a while - this sounds scary the thought of not actually paying anything off the mortgage just doesn't sit right with me.

3. Ask the lender to increase the term of the mortgage - we currently have 21 years 5 months remaining. Increasing the term to 30yrs only reduces the payment to £931. Although this may be achievable with very careful budgeting.

4. Try to remortgage to a lower interest rate and pay the early repayment charge of £4643

I really don't know if any of these are an option or whether I should just give up on the idea and start planning my return to work

Any opinions/suggestions??

ScarlettsMum

AnnaV

I'd be wary of increasing the term - as you say only slightly reduces the mortgage payments and you'll end up paying a huge amount more in those extra eight years.

Is there no way you can go back to work part-time? Or find a weekend/evening job?

shop-to-drop

I don't think you could do it without selling up. How about starting a business as a childminder would that be possible?

Thrugelmir

Sometimes in life you have to make hard choices. As its just not possible to do everything.

The interest rate isn't the issue, but the amount you owe.

Any possibility of downsizing in property size?

CloudCuckooLand

Become a child-minder..? What other work could you do from home?

This is why couples that use joint income to get themselves the best house they can, should think very hard about taking on a commitment that lasts 25 years - any number of things can change during such a period.

Some people may decide that the house is not that important. Sell up, get something smaller, so the mortgage is manageable, and enjoy 4 years as SAHM ?

To answer your specific options;

1) Period you need makes this unworkable. And may count as arrears, so should be a last resort.
2) You will struggle to convince you lender to switch to IO, without an alternative repayment vehicle, which would cost much the same.
3) Least worst option, if you are under 30. Still only defers the problem. And when you decide you need a bigger house, will you extend the term again..?
4) What deals do you think you might get? At 90%-ish LTV, you may be at 5%+ anyway. Not likely to make up the £4,643.

If you have £5k to pay the ERC, put that against your mortgage, to dent the debt...

ScarlettsMum

Thank you all for your replies.

They will lead me to investigate two possibilities before giving up on the idea completely.

Firstly the idea of childminding is appealing - I am actually a primary school teacher so surely that would mean that parents looking for a childminder would see that I was well qualified to look after their children/help with homework etc if required. I'm close to two local primary schools but I'm not sure how much work there would be around here. - we live in a predominantly council owned housing estate and that might put people off. I'm certainly going to look into how difficult this would be and whether I could earn enough money.

The second idea of selling and buyng a cheaper house is probably not possible around here - properties under 200K are rare in this wider area and we could only afford to buy at all because of where we chose to buy. It's also not exactly a large house - 2 up, 2 down terrrace. But there is the option of selling and finding somewhere to rent I suppose. I haven't looked at rental prices for ages but when we bought I know they were similar to our mortgage payments! It's worth considering anyhow.

But I really have to face reality. I take home more than my partner every month. We would be more than halving our income - it's just not practical. I suppose I just find it hard to think of paying someone else to look after my chid while I go to work and look after 31 of other peoples! But that's the way life is

cathh70

Can you ask about working part time at your school? At my kids school we have two part time teachers who have young children doing a job-share, one does 2 days, the other 3 days.

shop-to-drop

Child minding would be perfect. Look into it asap as you have to have all the set up checks done. Could you also do 11+ tuition or catch up tuition? A friend of mine was a teacher and set up as a child minder at home she always seemed to have loads of kids taking to school and picking up as well as little ones in the day as well as her own. She's a hard worker but loved it and won't go back to teaching. She now has set up a nursery and has premises is doing really well.

liz-paul

Sorry t obump an old thread but how about having your partner stay home with your lo? You would still be home during all the holidays and maybe your OH could work during the hols to supplement your income? Otherwise childminding might be good but if you onlt have a small house you might only get registered for 2 preschoolers (who make up most of the money because they're full time) and your own lo would be included in your allowances.

makemesumdosh

Have you got any family in the area, supply teachers get a decent daily rate so maybe one or 2 days a week could be worthwhile.

As another forum member has mentioned private tutoring in the evenings/weekends could be another option.

Have you got a spare room for a lodger, this would provide a reasonable source of income

sismith42

ScarlettsMum wrote: »

But I really have to face reality. I take home more than my partner every month. We would be more than halving our income - it's just not practical. I suppose I just find it hard to think of paying someone else to look after my chid while I go to work and look after 31 of other peoples! But that's the way life is

If the idea is that your child is looked after by a parent until school-age, why don't you look into your partner (as the one with a smaller take-home salary) being the one to stay home?