Should we change our mortgage payments?

Cathyandtwins

Hiya,

This is my first posting, so sorry in advance if I am posting about something incorrectly or waffle on too much!

The background:

My husband and I had always planned to have a family and the idea was that we would have one child, I would do stuff like cleaning and work part-time while a friend looked after the baby, in return for me looking after her baby a couple of days a week so that she could work.

However we were lucky enough to be blessed with twins (identical boys - double the love and fun NOT double the trouble!), so the childcare plans have totally gone out of the window, as, understandably, unless you are a parent of multiples people are a little nervous about looking after them, as they can be rather a handful!

We now find ourselves with an approx. £200 shortfall each month when my maternity pay stops in December. Paid childcare is not an option - we very much want the boys to be looked after by me (or a friend if needed) not a stranger, we don't have any family living nearby and the cost of putting twins into childcare is too high (even with tax credits to supposedly help). Also a lot of the places locally don't take children under the age of 2 and those that do have long waiting lists!

The question:

We bought our house in August 2002 and have a 5 year discounted rate with Standard Life Bank. The get-out payment would be £3,000+, so a switch isn't feasable. Our present monthly payment is £790 and Standard Life have offered us the option of lowering that. We can pay interest only at approx. £571 per month for the next 2 years (for example), with a £30 admin fee to set it up and then another £30 admin fee to change back. When we change back to paying the repayment of the loan amount + interest it would be approx. £818 per month. We have £121,200 left on the loan and if we sold the house we would definitely pay that back and make a profit, as our house is now worth about £170-180,000, but we are VERY nervous about stopping the monthly loan repayments and just paying the interest - even though it would solve all our money shortfall problems.

What do people think - is this a good idea? Any advice really would be MOST welcome, as we just don't know what to do or who to turn to for advice.

I also want to try to do homeworking, but can't find any legitimate companies, so any ideas on that would also be most welcome.

We just so much want to not get into debt (we don't have ANY others debts, other than the mortgage) and it is so important to us to be able to be the best parents possible to our little lads.

Looking forward to reading any advice or suggestions.

Thanks LOADS,

Cathy xx

Rikki

I can't offer advice specific to you be I'll tell you what I did and why.

I was struggling with my repayment mortgage high monthly payments. I changed to part interest only and part repayment. I have life insurance so this covered potential problems . This reduced my monthly payment to a more managable amount and any overpayments I make come off the interest only portion of the mortgage. I'm free to alter the amounts as I wish.

I hope this helps by giving you something to think about, another option. Convert part of you mortgage to interest only for a while.