negative equity, 3 kids, 2 rooms. low income

hi,

Im a working mam of two, last year my husband got let go from his job, shortly after we got our mortgage, which is currently 250,000, in the meantime he has gotten another job, and is earning minimum wage, actually we were better off when he was claiming jobseeker's as we had mortgage insurance, which was making 700e of our repayment. we also have a bank and credit union loan, and these won't be finished for 3 year's and we have already started interest only with the credit union

Im now pregnant with our third child, our house is tiny 2 bedroom's won't even be able to fit a double buggy in to the house let alone the baby,and we can't afford to make our mortgage repayments, we are struggling but meeting the repayment every month, we are currently doing a 6month interest only, but after the 6 month's will be in a worse situation, because we have no family to look after the children, and my wage's are 28,000p.a and all of this will go on childcare so im better off to stay at home after this baby is born,

Now we have had the house valued and the auctioneer reckon's we would definitely get 200,000 but no more, we don't have the saving's to pay the shortfall, actually have no saving's, and can't borrow off family.

from reading other threads here i realise that we won't be able to just hand back the key's either, nor do i want the house to be repossessed as we will be worse off then,

we were thinking we might be better off to rent this house, and rent somewhere else ourselve's but I have never been a landlord or anything, and I don't know the implication's with the bank and revenue etc..

please help, im totally desperate as to what to do, and I just feel so so stupid for getting the mortgage in the 1st place, everyone thought that it was a great idea at the time.. lo and behold a few month's later it it goes belly up

thanks for reading

Re: another what do we do neg equity post

Hi Jenny,

I answered another query about tax implications of renting out your own home and renting a place for yourselves. It's here.

Another option you might look into is the Mortgage Interest Supplement but that only applies if neither of you are working more than 29 hours a week, as far as I know.

Although not something you can do indefinitely, if you meet with someone from your lender towards the end of your six-month interest-only period and detail your financial situation, they may agree to extend your interest-only period.

Re: another what do we do neg equity post

he was at home for 9 month's, he nearly went mad, no way we can do that again

thanks for the reply though.. im sure we will manage with the space we have but that's the least of our problem's unfortunately

Re: another what do we do neg equity post

It is hard staying at home with kids but someone has to do it if you can't afford childcare. There are lots of women who stay at home going mad all the time. Why was he going mad and is it something that could be changed / improved to enable you going back to work?

Re: another what do we do neg equity post

jenny said:

he was at home for 9 month's, he nearly went mad, no way we can do that again

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Im just not buying this. Why cant he be a stay at home Dad? Whats he going mad about? Desperate times call for desperate measures.

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annR said:

Why was he going mad and is it something that could be changed / improved to enable you going back to work?

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I agree with this. There is no need for him to be sitting around watching TV all day.

He should buy some IT books and start making websites at home. This will generate extra income, and improve his skills and self-esteem.

I make websites as a hobby and it's fun. It's not that difficult, so he has nothing to fear.

Re: another what do we do neg equity post

i'd only stress what the others said - if you have a chance of a better paid job than him, take it ... what's the point of you sitting at home while he's out there getting less paid for actually working?
also, i find it hard to imagine somebody would be really getting bored with three little kids at home and he can also use this time for additional education ..

Re: another what do we do neg equity post

Sorry to be harsh but your husband is being unreasonable - it makes no sense to sacrifice a larger wage for a smaller wage. You are the primary bread-winner so it is logical for him to handle the childcare. He just needs to get his head around to the sense of it. The situation is what he makes of it himself - he has a family now so he cannot keep making decisions to suit him, he has to make decisions to suit his family and it makes no sense for him to work and earn less, you are already stretched to manage.

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UFC said:

I agree with this. There is no need for him to be sitting around watching TV all day.

He should buy some IT books and start making websites at home. This will generate extra income, and improve his skills and self-esteem.

I make websites as a hobby and it's fun. It's not that difficult, so he has nothing to fear.

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He should stay at home and mind the kids. From my experience of looking after kids you dont get time do much else besides the house work if your doing it right.

Jenny I dont think you have any option but to stay in the house you are in for the mid term ( 5 years) future. In your situation, renting out your own home would be a huge risk. Remember in the present rental market you will struggle to get it rented out 12 months of the year and their are numerous other costs associated with being a landlord.

Also I dont know where you are living but I dont think you would get more that 1000 a month in rental income for your house max. And renting a bigger house will cost you more than that,

Any chance you could consolidate your banks and credit union loans into one loan paying it off over a longer period? Have you contacted MABS also?

The baby can stay in your room for the first year. After that get bunk beds and a cot in the other room, maybe invest in some good storage. A tip is to floor your attic and get an attic stairs in. This made a huge difference for us in terms of space saving.

As said above, your husband needs to stay at home with the kids. In the medium term when they are in primary school he can get some PT work. Looking after your children is the most important aspect of your lives and he should feel privilaged to be able to do it. If he does at least some real good could come out of your financial situation.

Sit down and talk to your husband and dont panic, it will all work out for you if you stick together and work as a team. Seriously i wish you the very best.

Re: another what do we do neg equity post

Jenny can you do the money makeover section to get better advice. You might actually be better off on the dole. I'm not sure if your husband were to stay at home on no income and you were all to live on 28K less taxes plus bills that you wouldn't be better off.

I would go mad too if I had to stay at home with 3 kids, I would rather do anything than do that.

I don't agree the husband should stay home and mind the kids either.
A lot of men see their self worth as being directly related to their jobs. Through social conditioning, they do not see homemaking and minding kids as valid worthwhile work.
So when they are out of work, it equates to being worthless and a crashing, severe loss of self esteem results.
So you end up with a man, at home, getting worryingly more and more depressed, and making everyone else's life bloody miserable with it.
So as if she didn't have enough to be worrying about, the wife has another big problem on her hands!
That is the reality in most homes where unemployment has hit.

Sadie that's very well put.

sadie said:

I don't agree the husband should stay home and mind the kids either.
A lot of men see their self worth as being directly related to their jobs. Through social conditioning, they do not see homemaking and minding kids as valid worthwhile work.
So when they are out of work, it equates to being worthless and a crashing, severe loss of self esteem results.
So you end up with a man, at home, getting worryingly more and more depressed, and making everyone else's life bloody miserable with it.
So as if she didn't have enough to be worrying about, the wife has another big problem on her hands!
That is the reality in most homes where unemployment has hit.

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I agree with the above post. Jenny wants help and some posters seem to be more interested in the house husband debate. Her husband doesn't sound unreasonable - he sounds like someone working minimum wage to try and feed his family, like Jenny herself is doing.

I would put your house on the market immediately, you never know! If no offers come close to 250k, you haven't lost anything.
Best of luck.

sadie said:

i don't agree the husband should stay home and mind the kids either.
A lot of men see their self worth as being directly related to their jobs. Through social conditioning, they do not see homemaking and minding kids as valid worthwhile work.
So when they are out of work, it equates to being worthless and a crashing, severe loss of self esteem results.
So you end up with a man, at home, getting worryingly more and more depressed, and making everyone else's life bloody miserable with it.
So as if she didn't have enough to be worrying about, the wife has another big problem on her hands!
That is the reality in most homes where unemployment has hit.

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+1

alana said:

I agree with the above post. Jenny wants help and some posters seem to be more interested in the house husband debate. Her husband doesn't sound unreasonable - he sounds like someone working minimum wage to try and feed his family, like Jenny herself is doing.

I would put your house on the market immediately, you never know! If no offers come close to 250k, you haven't lost anything.
Best of luck.

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IN todays market I doubt she would achieve 200000 and even if they did how are they going to make up the shortfall.

If they do not want to loose their home then someone needs to look after the 3 kids. If he wants to work and let her stay at home he has got to start earning more than her. If not then he should stay at home.

Unfortunately you do not have the opportunity to upgrade due to negative equity and lack of savings.

To manage your living costs your probably have to look at the potential of earning more and spending less. A couple of things to consider:
- Can your husband do additional work whether it be pizza delivery or something based on his professional skills.
- Can a family member mind your children when you return to work?
- If you do not return to work could you mind children for other people?
- Can you move in with family or friends who have a larger house allowing bills etc to be shared and potentially rent your current residence?

She still hasn't said what was making the husband go mad. Was it boredom, was it minding kids, was it depression. If it's something like he just needs to learn how to mind kids or how to cook, or he doesn't like hoovering, well he should learn it surely. If staying at home is making him severly depressed of course that's different.

jenny said:

last year my husband got let go from his job, shortly after we got our mortgage,[....]

Im now pregnant with our third child, our house is tiny

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Jenny, can I ask why you bought the house only last year if it was so small? Is it possible you can make do with it, certainly for the foreseeable future while the new child is a toddler, if the only problem is buggy storage space?

Re: another what do we do neg equity post

UFC said:

I agree with this. There is no need for him to be sitting around watching TV all day.

He should buy some IT books and start making websites at home. This will generate extra income, and improve his skills and self-esteem.

I make websites as a hobby and it's fun. It's not that difficult, so he has nothing to fear.

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This is a joke, right?

Trying to do any work at home while minding 2 young kids is impossible. It's a tough job staying at home with the kids, fair play to all those that do it!(women and men)

Re: another what do we do neg equity post

jaybird said:

It is not impossible at all. Its hard work, but its not at all impossible. Plenty of women do it, and probably a few men too.

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I have looked after my kids (both under 5) at home. From the moment they get up to when the go to bed they need constant attention. Okay, if you put them in from of the TV for the day then maybe it gives you time to do your work. If you make an effort to keep them active then I just dont see how you could do any amount of other work. Then there is the cooking cleaning washing etc.

Its not just hard work its practically impossible without significant outside support, which from the original posters first post does not seem likely.