Mortgage payment difficulty advice

Phlip_corter · 29 January 2009 at 6:24AM

Thanks to all of you for sharing here a very informative information about Mortgage.It will be helpful to borrowers who are seeking to get face Mortgage payment difficulty.

opinions4u · 29 January 2009 at 7:54AM

1. Can you get any parental support? Knock it off any potential inheritance?

2. Can you get an evening job? That way you can take the 'calls from agencies' during the day but pull some money in at night. (personally I'd review my employment altogether as you simply aren't earning enough in the good times). My wife did 3 hours a night in Somerfield for a few months (8pm-11pm) and brought in an extra £300 from this. Job in a supermarket also gives you a 10% discount!

3. Make a list before you shop, buy the economy brands and give up biscuits, cakes, decent coffee etc etc. We cut back on orange juice alone and saved £80 a month. If we attacked the luxuries I reckon we could save another £150 (family of 5).

4. Online surveys - while you're waiting for those calls, fill in the ones that pay. Typically you can earn around £3 an hour - I cleared £50 a month when I had "little to do".

5. Partner drives to work? Empty out the boot, drive slower and save a bit on petrol. Could they work from home 1 day a week to cut travel costs?

6. Move in to one room and heat only that one - wear a jumper in the rest of the house.

7. Turn anything and everything that's not being used OFF.

8. Cost anything and everything you do. Cancel the newspapers. Don't run the tap while cleaning your teeth. Walk the kids to school, don't drive them (you have the time!). Drink water instead of squash. Use Tesco washing up liquid instead of fairy. The list in endless.

9. Freeview ain't that bad. Kill the Sky. You've never watched all those DVDs more than once. Now's your time! Alternatively cut back to basic Sky and switch to their broadband (£5 a month I think).

10. If things break (e.g. toaster, kettle) people will have spares in lofts/garages, or replace them with the £3.99 ones in Argos until better times come along.

11. Do the supermarket shop online and track down discount codes at www.hotukdeals.com. You can usually cover the cost of delivery with these and often more. Use comparison sites like https://www.mysupermarket.co.uk or https://www.kelkoo.co.uk when you do have to spend. Use loyalty sites like https://www.quidco.com to earn money when you do have to spend.

12. Maximise your loyalty points when you do have to shop. If you need a day/meal out at some point use the Tesco Clubcard points to pay for it!

13. Get a paper round - my daughter earned £100 a month from a morning and evening round. You can get more by delivering the free weekly rags too!

GOOD LUCK!

beecher · 29 January 2009 at 10:28AM

I think that it is time for a reality check incogni. You are wanting to arrange your finances around definitely getting employment in the near future. You need to be spending according to what you're earning now, not what you hope you'll be earning in a few months. Opting out of pensions and deferring the mortgage payments should be the last things you do - cancelling Sky and other areas should be the first options. I just get the feeling that you're hoping this will all go away without you having to change your lifestyle, and that isn't looking too likely.

I really urge you to go onto the Debt Free Wannabee site for help with this.

getmore4less · 29 January 2009 at 11:09AM

THis realy is debt free wanabee problem but these stood out to me,

£700 per month may seem like a “huge gap”. In reality, it is the inevitable result of losing an entire wage combined with a lifestyle predicated on that income. Unfortunately, a certain amount of that ‘lifestyle’ may involve commitments which it is difficult to adjust to fit,

and

No gym, dining or vacations to cut back on but I currently spend £60.44 on Sky/Setanta per month. Obviously this is near the top of my list of potential savings but I’m worried that the lack would drive me into the pub to watch the football (which was the previous default state)

and

My ‘model’ (if one can call it that) has always been to increase income to meet spending which, although previously valid, is proving increasingly difficult to achieve

Reality check,

You are in danger of losing the house.

The bold is why you have had problems in the past and have them again.

With this stratagy it is too late when it goes wrong.

In general the mortgage and the Council tax are the last things to default on and are the only commitments you need to keep up. followed closely by other esentials like food, gas, electric and then by transport(for work)

The rest have to go if you have no money, I think you will need to explain these on your SOA if you think you have to be paying them, you probably don't.

Do the SOA and work out a priority of which you are going to stop paying/cut back on to get the budget to ballance.

Starting with the mortgage is fately flawed approach.

As someone said you should still have enough to live on (asuming 2 of you) even after the mortgage so £700 is a lot of "commitments" many live on that including there housing.

The only reason to protect a credit rating is to get a mortgage, you have one you won't be able to change it so any defaults won't mater, even if you get another job the priority will be reducing debt and the mortgage, not restoring lifestyle/spending, so you don't get into the same situation again and this will sort the credit rating out anyway.

Whats the penalty for giving up the 5yr fix and going onto a lower rate.

Is the pension a final salary or a money purchase with employers contributions.
If not then it is worth considering stopping them they are not that good if just payment into a pension scheme that can be made up later, service based benifits or employers contributions are a use or lose and worth keeping.

JayZed · 29 January 2009 at 11:16AM

Just a few thoughts on the above:

You didn't really respond to RadiantSoul's point that you should be able to get by on your wife's net monthly income of £2700. That leaves you £1150/month after mortgage payments, which really should be enough to live on. Posting a statement of account on the DFW board should help.

You mention your wife's pension contributions - she really should continue to pay these if at all possible (that reduces your monthly spend to £950, which should still be manageable) - it should be one of the last things to be cut, but if it's a choice between suspending pension contributions and going into arrears, then you should choose the former.

Finally, when considering your expenditure you have to base it on the worst-case scenario: assume that you're not going to find any work in the near future, and that your wife's not going to get her raise. Otherwise you'll never have a safety net.

getmore4less · 29 January 2009 at 11:42AM

JayZed wrote: »

You mention your wife's pension contributions - she really should continue to pay these if at all possible (that reduces your monthly spend to £950, which should still be manageable) - it should be one of the last things to be cut, but if it's a choice between suspending pension contributions and going into arrears, then you should choose the former.

This only makes sense if there are company contributions or it is a defined benifits scheme(based on service), Otherwise it is just a defered tax saving scheme with loads of restrictions this can be topped up later when there is the spare money, getting rid of the debt is the better option.

Need to check there are no issues with temporary suspension of payments.

Robert_Sterling_3 · 29 January 2009 at 12:00PM

uzubairu wrote: »

Have you looked at the grocery retailers (Asda, Morrisons, Tesco etc), to see if you could get some work quickly, as they are always recruiting.
Even part-time, you could generate £300/£400 per month.

If I was in your postion, I would do anything to bring in regular, extra income.

I agree 100% with uzubairu

I know that kind words butter no parsnips nevertheless I wish you the very best of luck.

TotallyBroke · 29 January 2009 at 1:56PM

Here is the link for the dfw statement of affairs https://www.makesenseofcards.com/soacalc.html even if you do not post it up on the board (but I recommend you do) it will give you both a clearer indication of where your money is going.

First thing with sky, you could still keep sky sports but cancel the news section, kids section, history etc. Do you really watch all the movies and history etc. Just get one mix, sports, cheapest phone package and cheapest broadband package total = approx £30.
Telephone ~ if you are monthly contract, try reducing down the tariff or going payg. Land line only use for expensive calls if cheaper than using the mobile.
Find out if you pay your council tax over 10 months or 12. If the first, ask for 2009/2010 to be worked out over 12. Your monthly payment will be less each month and it will be constant.
Check out water meters, could be cheaper for you both as a couple. Plenty of ways to reduce water usage.
Other utilities ~ Turn everything off at the plug (except fridge/freezer). Check to see if you are in credit. If so see if they will pay you a proportion back or reduce the amount. Turn your heating thermostat down.
Meal plan. Look at what you have in the cupboards and choose meals that you can cook using those ingredients. Only buy things needed to make the meals for the week. You may find for the next few weeks you will only have to buy bread and milk. Try dropping down a brand level when shopping. Bulk out recepies with vegetables or pulses instead of the meat. It's cheaper and better for you.

When you can see where money can be saved so you are not overspending then over pay on your highest interest debt. I'd actually suggest you pay a token payment of £1 to each of your credit cards etc so that your mortgage, council tax is paid each month. But before you can do that you have to control your spending and work out where the money is being spent.

Good luck I hope you can both do it.

incogni2 · 29 January 2009 at 2:21PM

Hi,

Sorry JayZed, there were just so many points, it was inevitable that something would be unintentionally ignored. My wife’s net income is £2500 after final salary pension contribution and rail season ticket costs (which are paid by her employer and charged monthly against her wages). This leaves £950 per month. Direct debits for council tax, mobile phone, landline, an additional bank loan, gas, electricity, tv licence, buildings/contents and car insurance total another £698 and the business costs (which covers ADSL, website hosting, online backup and various insurances) involve another approximately £100 (current paid from my current account). About, £250 remaining. Food is say £300 and petrol about £60 (when I’m not working). Already a deficit of about £100!

How can one base expenditure on a worst case scenario? That would be if neither my wife or myself had work and both were unable to acquire any. We would have no income and would be unable to meet any obligation other than that funded from whatever the state was willing to provide. Assuming a worst case scenario would paralyse us (and, for that matter, anyone else) completely. Surely one should assume a likely scenario or a ‘worse than average but not entirely rock bottom’ one?

I am conducting a thorough review of my expenditure and, generally, I thank everyone for their comments. It is however astonishing how one can ask a question about mortgage payments and receive so many answers relating to personal expenditure. Perhaps that’s the joy of the Internet.

Regardless of whether I need one, I didn’t ask for a reality check, whether I was in danger of losing the house, or whether, in my position, you would do “anything to bring in regular, extra income” (this is not directed as JayZed).

getmore4less

“Need to check there are no issues with temporary suspension of payments.”

She cannot temporarily suspend payments as such. She can leave the scheme and then potentially re-enter at a later date, however each period in the scheme is treated as a separate pension (I’m certain that there is a more accurate description) rather than the periods being lumped together. The ‘company’ make contributions which, I believe, match hers.

“The bold B]increase income to meet spending[/B is why you have had problems in the past and have them again.”

This really is extremely presumptuous though, again, no doubt well intentioned. The CCJ (my past credit problem) was passed down at a time when I had no non-State income for a period of some years and so was unable to even theorise about increasing income to meet spending.

If I get another job, at my previous rate, then I will pay off all non-mortgage debt in two months (at the current levels). If the level rises significantly or I am forced to take a job for less money then it will take longer.

Why am I “in danger of losing the house”? I’m certainly not in danger now, even by utilising currently available credit I would be able to last over two years at the current rate of expenditure. Then I would be in danger of losing the house.

Finally, I fail to see why opinions4u considers a gross wage of £28K (taking the 2007-2008 figure) to imply that I “simply aren’t [am not] earning enough in the good times”. Given that this was paid primarily as dividends, it amounted to about £22.5K net which seems to be distinctly better than average (speaking nationally). It was a great year – I was fortunate enough to make that amount very quickly and spent the remainder of the 12 months having a good time!

beecher · 29 January 2009 at 2:34PM

Oh well, best of luck with what you end up doing. People on the DFW threads would certainly help you to cut down from spending £1650/month after your mortgage but it seems clear you're not 'there' yet and don't see the need to stop your spending. I hope it all turns out for the best.

Mortgage payment difficulty advice

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