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  • FIRST POST
    incogni2
    Mortgage payment difficulty advice
    • #1
    • 28th Jan 09, 1:50 AM
    Mortgage payment difficulty advice 28th Jan 09 at 1:50 AM
    Hi,

    We took out a mortgage for £236,099 with Nationwide in June 2008. The mortgage is over 25 years, fixed for 5 years at 6.23%; 95% LTV (i.e. 5% deposit). The current monthly payment is £1554.56 per month.

    This means that we have made 7 payments so far, totalling £11,947.55 (due to a higher first payment than the standard) of which £9458.22 has been interest, leaving a balance of £233,609.67. (So little paid toward the capital!)

    My wife is in regular employment at approximately £45,000 per year. I work through my own limited company (basically a one-man consultancy vehicle) and our accountant certified my earnings as £15,000 per annum (which, at the time, I viewed as remarkably stingy but now looks worryingly optimistic). Anyway, we were confident that we could meet the repayments even though it was a 50% increase over what we were paying as rent.

    Unfortunately, though my wife’s job remains as stable as ever (and is almost certain to continue to do so), I have been unable to find further work since my last contract ended in October. In reality, I grossly underestimated the worsening economic and employment situations. I felt that because I had always found it relatively easy to find work in the past and with a strong client-base, there was little reason why I couldn’t continue to do so. Even if the opportunities were to diminish, they surely wouldn’t dry up entirely!

    My wife reckons that we are currently living at about £700 per month beyond our means (financed almost entirely from credit) and obviously some radical cost-cutting surgery is imminent. I was hopeful, having read about a new attitude from lenders toward borrowers in difficulty, that we might be allowed to shift to interest-only payments for a few months which, coupled with substantial personal economies, might allow us to at least break-even while I track down a job.

    We spoke to Nationwide and, firstly, we can’t go interest-only (due to a high LTV and other more technical reasons). However, we can ask for a “concession”. Basically, this would be a continued reduction in the monthly payment for an agreed period. So far, so rosy. If we complete and return an account of our expenditure, they will consider the concession. However, if at any point the total, rolling concession adds up to the same amount as our standard monthly payment then it will be recorded on our credit files as arrears. Lastly, once the concession period has ended, the amount conceded must be repaid again to an agreed schedule (6-12 months was suggested).

    This appears to mean that we could ask for a £500 per month reduction for 3 months without arrears being recorded (and have to pay back the £1500 thereby ‘lost’ to the lender over the following 6-12 months) or, equally, a £250 per month reduction over 6 months.

    I’m assuming the arrears being recorded on our credit files is not a good thing? (And such a strong negative would be like torture, albeit a mild form, given the effort spent correcting the data before we applied for the mortgage in the first place.)

    Even if I get a contract, I probably won’t see actual cash for two months, so the first option would only give me about a month’s clearance. The second option might be more realistic but £250 per month doesn’t seem like enough of a reduction to enable our credit cards to stop flexing (our current utilisation is around 50% but only because the damn companies keep putting the limits up whenever they are approached). What happens if I still don’t find work – do I just plunge into arrears hell? Certainly, I’d expect to find work soon but, given that previously I expected to find it instantly, I not currently keen to rely solely on my judgement.

    Clearly I’ve rambled on here and not asked many questions but I just wondered if anyone had any views as to the leniency and suitability of the lender’s solution and the possible credit-worthiness related effects?

    Thanks.
Page 1
    • noh
    • By noh 28th Jan 09, 2:33 AM
    • 5,341 Posts
    • 3,644 Thanks
    noh
    • #2
    • 28th Jan 09, 2:33 AM
    • #2
    • 28th Jan 09, 2:33 AM
    Although its not the sort of answer you are looking for.
    One temporary solution is to get a job or two doing anything whilst still looking for a contract in your preferred line of work.
    • poppy10
    • By poppy10 28th Jan 09, 5:19 AM
    • 6,230 Posts
    • 7,553 Thanks
    poppy10
    • #3
    • 28th Jan 09, 5:19 AM
    • #3
    • 28th Jan 09, 5:19 AM
    Your options are very limited.

    You can't switch to another lender as you are almost certainly in negative equity by now.
    You can't go interest-only for the same reason, and also because of your short history with them.

    The other option to reduce your mortgage outgoings is this concession they have offered you, which is essentially just "authorized arrears", without the monthly arrears charge being added. This might save you money in the short term, but you have to think long and hard about your prospects for employment over the next year. The recession is just starting, if anything it's going to get worse over the next 12 months. There's no point taking the concession and building up arrears if you have no realistic way to make the full mortgage payments when they go back up in a couple of months time.

    £700 a month is a huge gap between what you are bringing in and what you are spending. You may have to get another 9-5 job, or just accept you can't afford your current house and lifestyle, and downsize.

    I'd recommend posting on the DFW board - you'll get excellent advice particularly on cutting your outgoings and avoiding the use of expensive credit cards to fund day to day living expenses.
    • uzubairu
    • By uzubairu 28th Jan 09, 9:00 AM
    • 1,175 Posts
    • 3,154 Thanks
    uzubairu
    • #4
    • 28th Jan 09, 9:00 AM
    • #4
    • 28th Jan 09, 9:00 AM
    Although its not the sort of answer you are looking for.
    One temporary solution is to get a job or two doing anything whilst still looking for a contract in your preferred line of work.
    Originally posted by noh
    Have you worked at all since your contract ended in October?
    Is the £700 gap due to the fact that you are not working at all?

    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.

    Definitely look at the Debt Free Wannabe forum for advice and support.

    Good luck.
  • beecher
    • #5
    • 28th Jan 09, 9:18 AM
    • #5
    • 28th Jan 09, 9:18 AM
    You need to post a Statement of Affairs on the Debt Free Wannabee site and find out where you can make cut backs to your spending. Your mortgage must be taking up about half of your monthly salary so you need to look at where the other half is going. Get rid of Sky/gym membership, cut back on (stop) eating out/holidays etc. £700 is a big gap though so something else will have to go, or you will have to get a part time job to tide you over. Best of luck.
  • SouthCoast
    • #6
    • 28th Jan 09, 9:40 AM
    • #6
    • 28th Jan 09, 9:40 AM
    Advice from CAB on mortgage arrears:

    http://www.adviceguide.org.uk/index/whats_new_jan09_help_for_struggling_homeowners_eng land.htm
  • paulsin
    • #7
    • 28th Jan 09, 10:19 AM
    • #7
    • 28th Jan 09, 10:19 AM
    As previously stated. It may not be what you want, but 15k should be accessible with a selection of other jobs, even though they don;t appeal to you. This is not a comment on you or your personal circumstances, but far too many people are just not willing to work to keep their house. When I was younger my Parents worked day and nights alternatly as they didn't have a lot of money. It wasn;t anything out of the ordinary as many people did it then.

    You could earn 15k stacking shelves at night. Its not ideal, but its moeny and it just depends house much you want to keep your house.

    What ever you decide to do, keep in regular contact with your lender, should the worst case happen and you be taken to court, this will be looked on favourably. Good luck with what you decide
  • Miggie
    • #8
    • 28th Jan 09, 10:26 AM
    • #8
    • 28th Jan 09, 10:26 AM
    Could you take in a lodger?
    Good luck - I do hope you find a way through.
  • beecher
    • #9
    • 28th Jan 09, 10:30 AM
    • #9
    • 28th Jan 09, 10:30 AM
    Hi,

    I’m assuming the arrears being recorded on our credit files is not a good thing? (And such a strong negative would be like torture, albeit a mild form, given the effort spent correcting the data before we applied for the mortgage in the first place.)

    .
    Originally posted by incogni2
    This part springs out to me as it suggests that there have been problems with credit in the past, before you took on the mortgage. Apologies if I'm wrong here but it does suggest that you need to look at this in a wider context rather than only focussing on the mortgage. The DFW forum is great for that and will maybe make you look realistically at your finances.
    • Radiantsoul
    • By Radiantsoul 28th Jan 09, 11:32 AM
    • 2,021 Posts
    • 2,001 Thanks
    Radiantsoul
    Mortgage companies are unlikely to be too forgiving regardless of the climate as offering any kind of payment holiday will seriously jeopardise their equity.

    Your wife's post tax income should be around £2700 per month which should leave you with £1200 to cover bills, food, insurance, and other costs. That strikes me as quite a lot and you should consider why you are running up £700 per month. It might be you haven't adjusted your lifestlye towards your lower income and the costs of a mortgage.

    Probably any help the mortgage company give you is going to be costly as interest is accruing at quite a rate. Your options are;
    1. Sell, accept a possible loss of £10k-£20k on the property which will be offset by a £500 reduction in housing costs. Plus house prices are likely to decline further.
    2. Reduce your expenditure.
    3. Increase your income. Your current business seems only marginally viable at the best of times, a profit of £15k is relatively marginal with full employment. With no work available you have no scope to increase prices and no costs to cut. In my opinion you need to figure out a way to generate higher profits if you are going to carry on once customers do return. As other have said you could earn a similiar amount in retail and your income would be more certain.
  • incogni2
    Lengthy response
    Thanks for all the advice.

    noh

    Of course, you are right. As long as no qualifications are required (I’m an IT Professional) and the work wouldn’t impinge upon my ability to seek more desirable employment. I’m currently fielding about 10-15 calls from recruitment agents per day (all of them useless) which is almost like a job in itself.

    poppy10

    Unfortunately, I hadn’t realised previously that interest-only wasn’t an option (although I was made aware of this when I spoke to Nationwide).

    You say “There's no point taking the concession and building up arrears if you have no realistic way to make the full mortgage payments when they go back up in a couple of months time.”

    I suppose it seems like the opposite to me: faced with arrears now, or beginning in six months’ time, I may as well take a punt on my chances of getting a job in that period while the arrears are authorised. I had hoped that the bank would offer a more flexible solution, however.

    £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, hopefully temporarily, reduced means. I may get another contract tomorrow (in which case, there is no obvious problem); I may not get one for a year. What was essentially a ‘sure thing’ has become a guessing game due, perhaps largely, to the economic climate.

    My wife will get a pay-rise soon but that will only bring in another £200 (net) per month. In the meantime, I don’t really want to reduce the debt (which, to me, remains manageable) but to achieve some sort of equilibrium before it spirals beyond control. Most current debt is currently on a 12-month interest free time-bomb and I’m hoping to find the means of disposal!

    I think that everyone’s points are very interesting especially in the perceived relationship between spending and lifestyle. Previously, I have always spent what I wanted to spend and controlled my income to match those outgoings by seeking work as and when I needed it, relatively secure in the knowledge that it was out there. Now, for better or for worse, everything may have changed and those who clearly allow their income to dictate their spending are in a better position or, at least, a significantly more resilient one.

    I am not minded to “accept that you can’t afford your current house” on the basis of 3 jobless months; it seems so overly dramatic. I am just trying to get a grip at a relatively early stage of ruin in order to slow down progress toward the latter stages (which, themselves, seem far from inevitable).

    uzubairu

    No, I haven’t worked at all in those three months and the shortfall is due to that. I haven’t been entirely idle though, considerable time has been spent refreshing and augmenting technical knowledge which might make my skill-set more marketable. Of course, while useful, none of that pays the bills.

    I am frequently reducing my wage aspirations downward (they are currently a little more than half of October’s expectation). However, there is considerable downward pressure on wages (more correctly, daily rates) in the market within which I work. I have also moved location since I last sought a new contract and that has also diminished earning potential. Again, I am trying to readjust in terms of both location and market conditions. More than approaching the retailers you suggest, my dilemma is how far to widen my search. A couple of months ago, I was turning down opportunities which now I’d jump at because they were further than I wanted to travel. This was likely a miscalculation. However, the main questions remain, how far do I want (or am willing/able) to travel? Should I restrict myself to a car-based commute or consider the train? (At a push I could reach London via rail where, though slightly tarnished, the streets may still be paved with gold.)

    Christ, I abhor the idea of a commute (I’ve spent the past eight years working from my home office) but I realise the necessity.

    beecher

    The mortgage is currently approximately 3/5ths of income. 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). My wife has been talking of opting out of her pension scheme to save £200 per month but that seems like insanity to me. Surely we should be cutting expenditures which wouldn’t be so long-term detrimental?

    SouthCoast

    Thanks for the link. The Homeowner Mortgage Support Scheme sounds really interesting and, to be honest, this or something similar but less formal was along the lines of what I was hoping the Nationwide would suggest. I don’t know if it is applicable to my situation or not (I’ve just read the Directgov link). Are there any more details yet?

    paulsin

    Perhaps “far too many people are just not willing to work to keep their house” but, like everything else, it has a cost and a value which is most obviously financial but not entirely. Perhaps the house is just not as elevated in some personal hierarchy of needs for some as it is for others. Personally, I wouldn’t countenance losing mine at this stage (it’s taken so long to get it) but, you’re right, what I’m willing to do is ultimately a reflection of how much I want to keep it. However, like many people I’d guess, I’d rather do the minimum I can to retain the property rather than go ‘above and beyond’.

    My parents were/are not so different, perhaps, from yours (in attitude, at least, I suspect). They were actually ‘comfortably off’ but as a result of considerable graft. Due to commuting, I barely saw my father during the week and, for him, it was all about the ends justifying the means. However, I still feel a pang of resentment that such devotion absented him for so much time. I wonder if he feels that it was worth it or simply obligatory.

    Miggie

    Unfortunately, not enough room for a lodger. Thanks for your wishes. I remain bullish (or just over-confidant) about my chances.

    beecher

    I have had significant credit problems in the past, predominantly a CCJ which I waited patiently to be cleansed from my record. Nothing recent though. I was mostly referring to the trawl of the credit references agencies which I preformed in preparation for the mortgage application only to find a bushel of incomplete and inaccurate data on file. Mostly stuff like non-contiguous electoral roll information, a failure to link addresses which made it appear as though I’d spent most of my adult life with no fixed abode, incorrectly registered credit cards, credit agreements which been legitimately cancelled but subsequently appeared to be bad debts. It was frightening, all the more so for being mistaken. Correcting it took considerable diplomacy and patience in seemingly interminable communications with the agencies. It was all fixed over a period of months but the quality of service from agency to agency (Equifax to Experian for example) varied enormously and the level bureaucracy remind one of The Trial.

    RadiantSoul

    Wouldn’t a temporary payment reduction (without the threat of credit suicide) be in both parties interests? Their equity must already have been significantly jeopardised by the tumbling market though, obviously, further falls bring further damage. It seems, to me, that the benefits of reduction over the risk of default is significant and that a willingness to be flexible is likely to bring greater medium/long term reward. They did offer to extend the term of the mortgage from 25 to 35 years. However, the small benefit to me (a reduction of less than £170) was counterbalanced by a huge increase in the eventual sum paid in terms of interest.

    It is true that a £15K profit makes the business appear only marginally viable, however that was the figure for the 2006-2007 company year which was the most recently filed at the time of application. The profit for 2007-2008 was £28K, though this year (which ends August 2009) is no longer looking fantastic. 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. As I work in a services industry, I can modify the price of my services or seek to offer them more frequently. The former is broken because what was once moving inexorably upward is now being squeezed down (market flooded with other people in a similar situation) and the latter bust due to an abundance of supply (workers) coupled with a scarcity of demand (jobs). The control I always had, fictionally at least, has evaporated.

    Who knows? Maybe there will be work tomorrow. I’m waiting on a promise from a recruitment agent. I’m always waiting on a promise for a recruitment agent...
  • Phlip_corter
    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.
    :: Unapproved signature removed by MSE Forum Team ::
  • opinions4u
    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 www.mysupermarket.co.uk or www.kelkoo.co.uk when you do have to spend. Use loyalty sites like 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!
    Last edited by opinions4u; 29-01-2009 at 7:00 AM.
  • beecher
    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
    • By getmore4less 29th Jan 09, 10:09 AM
    • 38,376 Posts
    • 23,820 Thanks
    getmore4less
    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
    • By JayZed 29th Jan 09, 10:16 AM
    • 712 Posts
    • 595 Thanks
    JayZed
    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
    • By getmore4less 29th Jan 09, 10:42 AM
    • 38,376 Posts
    • 23,820 Thanks
    getmore4less
    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.
    Originally posted by JayZed
    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
    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.
    Originally posted by uzubairu
    I agree 100% with uzubairu

    I know that kind words butter no parsnips nevertheless I wish you the very best of luck.
    ...............................I have put my clock back....... Kcolc ym
    • TotallyBroke
    • By TotallyBroke 29th Jan 09, 12:56 PM
    • 1,494 Posts
    • 982 Thanks
    TotallyBroke
    Here is the link for the dfw statement of affairs 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
    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 [increase income to meet spending] 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!
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