Help? :s

Joe_Bloggs

It is difficult to work things out in total without knowing the interest rate on the secured loan. Can you pay this loan of early, without penalty, if you sold your house/consolidated mortgage ? If you went to 5.1% on the £120K then expect to pay £636 per month on that over 33 years. Interest only on the £120k would be £510 per month. This is just like renting the £120K from the lender. You could sell up, realise the £30K+ equity in your property and rent somewhere if you feel you are going to struggle beyond your means for an extended period.

J_B.
If I were Halifax I'd try and sell you some insurance to make things even harder to afford.

lisyloo

The new baby on the way was not planned. But he/she is coming now and I have to deal with it!

Yes I appreciate that, but what would the situation be with only 2 children? Would your partner be working and paying for childcare?
How does the 3rd child affect this?
Does it mean it's not worth your partner/spouse working any more? or is the salary good enough that she can return to work sometime after the birth?

I'm not asking to be nosey or critical, but people can sometimes offer suggestions if they understand the situation better.

For example have you put in a claim for working families tax credit?

If it's a temporary situation i.e. partner can go back to work, then certain temporary solutions may be appropraite (I/O mortgage for example).

If the situation is more permanent e.g. she can't go back to work as child care for 3 is prohibitive, then the situation is different and a different solution may be appropriate. Something more long term would have to be considered.

Have you compared the costs of renting with paying your mortgage? (it may not be cheaper to rent so might not be an option, but perhaps worth considering).

Voyager2002

I must say, I wonder what the mortgage lender thought they were doing when they gave you a loan that so greatly exceeded your capacity to repay.

Yes: make sure you are claiming tax credits and any other benefits out. Could you rent one of the rooms in your house? (Any income from that is tax-free.) Otherwise you could explore moving to a cheaper part of the country and/or getting a better-paid job.

Summer_Rain_5

Joe_Bloggs wrote:

It is difficult to work things out in total without knowing the interest rate on the secured loan.

I dont have the paperwork with me at the moment but I reckon it's around 8%.

SR

Summer_Rain_5

I currently have a little boy aged three, a little girl aged one and a bit and a newbie due in March of next year! Tricky...

lisyloo wrote:

Would your partner be working and paying for childcare?
How does the 3rd child affect this?

Costs appear to be prohibitive for this and with the little ones being, well....little, it does not seem an option

lisyloo wrote:

Does it mean it's not worth your partner/spouse working any more? or is the salary good enough that she can return to work sometime after the birth?

Tis probably five years at least before she can return to work....

lisyloo wrote:

For example have you put in a claim for working families tax credit?

certainly have

lisyloo wrote:

Have you compared the costs of renting with paying your mortgage? (it may not be cheaper to rent so might not be an option, but perhaps worth considering).

From my initial look at things, renting a similar sized property would cost more!

SR

Summer_Rain_5

Voyager2002 wrote:

Could you rent one of the rooms in your house? (Any income from that is tax-free.) Otherwise you could explore moving to a cheaper part of the country and/or getting a better-paid job.

All rooms are taken unfortunately.

Maybe it might have to be selling up......*wonders off deeply worried*

SR

Summer_Rain_5

Maybe I could work part time at the weekends....

Hmm, any suggestions for this?

SR

lisyloo

Do either of you have retired parents living nearby.
Would it be possible to get cheap (or free) childcare from either set of parents?
It might sound like taking advantage but I'm sure they would want to help you and it's not that uncommon these days.

Was the rate you got from halifax a variable rate?
If so I would suggest asking them if they can offer a fixed rate. It might be cheaper.

meanmachine_2

I wouldn't sell up. You mortgage payment is approx 50% of your take home pay, so it is do-able, espesh with tax credits. As a family New Labour seem to look after you, much better than single people.

That loan is the sticking point.

With three kids, I wouldn't want to sell up and rent. I think you have to hunker down and ask your friends/family for a bit of help. Maybe they could give you cash as a present for the new baby?

I'd also get the snip if I were you mate!

Go on the debt-free section and look at ways of cutting back.

And don't get a weekend job - you'll never be able to see the kids!

Joe_Bloggs

I reckon you are paying £196 per month @8% for the £25K over 24 year term. This is not a good rate and it is secured on your house. I hope you got good value for whatever you spent the money on.
If your wife is going to be locked into child care for five years then she may as well study for recognised child care qualifications. The benefit of this is you may be able to 'bank' the hours caring for other children and your own with similar people in this situation. This enables child care 'free' days. There may be better ways of organising peoples child care skills with their child care requirements than my description of a rural child care setup.

J_B.
If the cost of single child care is extortionate then it makes sense to become a qualified child carer and look after your own and other children.