OH refuses to have anything to do with finances

Gra76

When I first met my wife we were both in debt. Probably more me than her.

We decided to have a joint account when we got married. After letting her run the finances for a couple of years we were getting nowhere in terms of sorting the debts out. I offered to take over and with a bit of planning and some cutting back I managed to get all the debts paid off and got us into what I now consider to be a fairly comfortable position.

We decided to pull our finger out and get our house on the market recently after spending months getting it ready.

The 'For Sale' board finally went up last week.

So we're looking at houses we can afford to move to. This is where things get difficult.

My outlook is "Interest rates will rise. Plan for them and make sure we can afford to pay them".
Her outlook on life is "If we can afford it now I don't see why we can't have it".

This has led to some interesting conversations as it means I'm looking at houses lower down and she's looking at significantly more expensive houses.

When we first got a mortgage interest rates were 5.5% for the product we bought. That mortgage is now paid off so we need another one.

She believes that interest rates will not go up past the 5.5% we used to pay even though at the time it was the lowest interest rates had been in years. I believe she is the most niave person I've ever known.

When I try to humour her and show her what the mortgage will cost should interest rates go back to 5.5% she looks at me like I'm a lunatic, because she's convinced the BoE base rate will sit at 0.5% forever. I'd rather plan ahead for the inevitable rises.

When I try to talk through figures with her she tells me she's having panic attacks and then argues with me and storms off in a huff.

I don't want to take sole responsibility for the decision on how much we budget when we come to getting a new house, I want her to say something other than "Well if you say we can afford it I'm happy with that".

How do I get her to sit down and talk about money without it turning into a huge arguement? It's not just the mortgage, it's pretty much any large financial decision. Answers on a postcard please!

SuzieSue

Gra76 wrote: »

I don't want to take sole responsibility for the decision on how much we budget when we come to getting a new house, I want her to say something other than "Well if you say we can afford it I'm happy with that".

This happens in a lot of relationships - one person is often much more knowlegeable about finances than the other. I know you don't want to take sole responsibility, but from what you have said, she isn't really much help so you will have to. You are taking a sensible, cautious approach and if she is happy to listen to you, then you should be happy too.

Caroline_a

I can remember mortgages being 17%... but then I'm old!

Monsternextdoor

Do you live round the corner from me, this sounds eerily familiar !!!

Tbh if it was me id be telling my partner this is what we can afford and thats it, if you dont like it then we can stay here tough tit ! If then she still refuses to listen then I dont know what else to suggest.

ash28

I usually make the financial decisions in our house - OH is never very interested.

He is a bit like your wife in that he will say - if you think we can afford it then get it -

He is good with money - actually better than I am.

When it comes to houses, I've always been the one to say "we can afford it" and he's just gone along with it.

I would just do it and tell her what you think you can afford. Years ago we used to base our affordability on the amount we had to repay a month and as interest rates were so volatile then - I always worked on the premise of - if the mortgage payment doubled (it happened to us and lots of others in the 1980s) could we afford to pay it - if the answer was yes - then the house was a go-er.

OH just glazes over with anything regarding finances....

londonsurrey

Your taking over the finances from her and making a success of it is a good indication to her that you have a better hold of these things.

Is she really incapable of understanding, or is it more that she doesn't want to?

If you bought a more expensive house, and interest rates go above 8%, what suggestions does she have?

Is she willing to cut down on (shoes, eating out, car, clothes, holidays)?
Is she willing to empty out a couple of rooms, and put up with lodgers?
Basically, ask her, what will she do other than just wait for the money to run out?

JimmyTheWig

Gra76 wrote: »

I don't want to take sole responsibility for the decision on how much we budget when we come to getting a new house, I want her to say something other than "Well if you say we can afford it I'm happy with that".

How long do you plan to stay in the new house? Quite a while? Then why not go for a long-term fixed rate?

I'm not quite sure what your current position is. Are you increasing your existing mortgage and keeping the term the same (if so, what is the term)? Or increasing the term? Or do you not have a mortgage currently?
In other words, what term are you considering?

What are your long-term job prospects? Obviously many people aren't getting much of an increase in wages currently, but over the next 5 years most people can expect their wages to increase. But obviously that's not the case if you will be retiring in that time-scale. Or going down to one salary to have a baby, etc.

Basically, what I am saying is that if you go for a 5-year (say) fixed rate over a relatively short repayment term (20 years max) then in 5 years time
(a) your outstanding balance will be lower, so an increase in rate will be less harsh
and (b) your income will be higher, so you will be able to afford an increase in rate.

Then you just need to work out how much you can afford each month and that will determine how much you can borrow on a 5-year fixed rate for that monthly repayment.

Gra76

londonsurrey wrote: »

If you bought a more expensive house, and interest rates go above 8%, what suggestions does she have?

I've got a spreadsheet set up that works out what the mortgage repayments will change to if they go up to any percentage. I'm making sure that if interest rates went above 10% we'd still be ok. She's convinced we'll all be paying no more than 5.5% like we were on our first mortgage. I told her to ask her mum what interest rates were like at their peak but she just ends up slamming doors.

She's looking at properties significantly more expensive than I am. Don't get me wrong, I'd love to move to some of them but I don't want to be another repossession statistic in years to come.

azzabazza

Caroline_a wrote: »

I can remember mortgages being 17%... but then I'm old!

Me too!

My OH is the financial wiz in our house and has been for the last 40 years. While he is slightly cautious with our finances, he has always made the right decisions (apart from Railtrack shares)! I have always deferred to what I consider his better judgement.

It doesn't sound like your OH is adverse to you holding the reins on this and it certainly looks like you have dealt with your financial situation well. I think you should set your maximum house price, explain why again and go with that. My OH's tack was that if we don't overstretch on the mortgage then we have more disposable income for holidays etc! It worked for me.

Gra76

JimmyTheWig wrote: »

How long do you plan to stay in the new house? Quite a while? Then why not go for a long-term fixed rate?

I'm not quite sure what your current position is. Are you increasing your existing mortgage and keeping the term the same (if so, what is the term)? Or increasing the term? Or do you not have a mortgage currently?
In other words, what term are you considering?

What are your long-term job prospects? Obviously many people aren't getting much of an increase in wages currently, but over the next 5 years most people can expect their wages to increase. But obviously that's not the case if you will be retiring in that time-scale. Or going down to one salary to have a baby, etc.

Basically, what I am saying is that if you go for a 5-year (say) fixed rate over a relatively short repayment term (20 years max) then in 5 years time
(a) your outstanding balance will be lower, so an increase in rate will be less harsh
and (b) your income will be higher, so you will be able to afford an increase in rate.

Then you just need to work out how much you can afford each month and that will determine how much you can borrow on a 5-year fixed rate for that monthly repayment.

The house we move to next will be the house we bring our 3 kids up in. We'll be staying in it for a good 20 years I expect.

I'm basing my initial calculations on a 5 year fixed rate as it is, with overpayments while interest rates are still low.

We don't have a mortgage at the moment, it was paid off last year thanks to a critical illness policy I had that covered the mortgage. Got diagnosed with Hodgkin's Lymphoma in September 2011, paid the mortgage off soon after that.

Job prospects aren't bad, I've been with the same company for 12 years, it's doing well and hopefully it'll stay that way. My wife works part-time as an NHS nurse. I'll probably see small wage increases but I know she's unlikely to see much, and they've frozen her hours so she couldn't currently go back full time anyway.

Maybe I'm being a little too cautious, but I remember how much we struggled years back and I don't want to go back to that.

Azzabazza - Your hubby sounds like he's a brother I never knew I had! That's the exact same theory I keep using on my wife to make her come round to seeing my way that cheaper = more holidays, new cars etc etc!

JimmyTheWig

Sorry to hear about your diagnosis, OP. Not something I know anything about, but hope that it is something that they can sort out for you.

Gra76 wrote: »

The house we move to next will be the house we bring our 3 kids up in. We'll be staying in it for a good 20 years I expect.

I'm basing my initial calculations on a 5 year fixed rate as it is, with overpayments while interest rates are still low.

Sounds ideal.
Lets have some figures.
Basically, what would be a comfortable amount to pay each month (i.e. what would you top your monthly repayment up to each month with overpayments)?
What would be the maximum you would be able to afford each month if you cut back (i.e. at what monthly repayment level would your lifestyle become compromised)?
What mortgage repayment term are you looking at?