# stressing situation, catch 22



## househelp (10 May 2008)

just need a bit of help/advice...

we have gotten ourselves into a situation and are at an end as to what to do...

where we are :

myself
loan - ulster bank €8,000,€210 p/m
cc - bal 3000, trying to clear , just making min - missed 1 month in last 6

currently earning 2700 take home p/m

partner
loan - mbna €9000, 209 p/m
ge car loan €15k, 409 p/m
cc - bal €1500, trying to clear , just making min - missed 1 month in last 6

currently earning 1600 take home every for weeks.

mortgage 162k, 836 p/m
--------------------
bought a house in july last year, mortgage 162k, 132k for the property, 30k to renovate.

we spend the 30k within a few weeks on the property as we had under estimated the cost of renovating it and spend a little more on the insulation, electrics etc. than we expected. From quotes we are still about 25k away from being done. windows, 2nd fix elec and plumbing.

In Jan/Feb this year.
when we went back to our mortgage company (EBS) to get additional funds they said no.

During the renovation it was paid in stages, however as it took 3 weeks to payout some of the funds- so to keep going we purchased some of the supplies from our own pocket and this lead us to missing a payment on a loan. they refused because of this.

they said that we could re apply with 3/6 months.

we got approved a consolidation mortgage with GE money for 208k to clear the debts, but this will leave us with only about 7k to finish the house and paying 1400 p/m for 40 years at 8%!
- they had an ERA auctioneer our last month who valued the property at 260k as the works we have completed on it has added to it.

our solicitor got the mortgage package as said that we should consider this carefully - as its very high, perhaps contact our original mortgage company to see if they can do anything!.

so now....

we are in a troubled situation as we cannot move into our house as its not livable.

we have to rent a house, which is an extra €800 p/m on top of our mortgage and this during the last few months has lead us again to missing a loan payment.

if we can get approved a topup to complete the house (25k) and additional money to clear our loans (32k) we will only be paying 1300 p/m and this will allow us not to get into financial trouble again, but as we are having to paying 800 p/m in rent we cannot always meet our loan commitments! - its a very stressing catch 22.

can anyone lend any advise ?


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## rmelly (10 May 2008)

Can you clarify what payments you have missed:

Is it:

2 Credit Card, 1 Mortgage and 1 Loan

OR

2 Credit Card and 2 Mortgage


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## rmelly (10 May 2008)

How confident are you that 25K will complete the work?

What's the BARE minimum required to make it livable?

Is the house sellable in it's current state?


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## flattea2 (10 May 2008)

rmelly said:


> What's the BARE minimum required to make it livable?


 
Good point. Sounds like you have no kids.? If you could at least get a bedroom/ kitchen and shower/toilet done then move back in and you can put the 800 a month rent into sorting out everything else?


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## Diziet (11 May 2008)

8% interest rate! This is completely mad, and will cripple you financially. You need to go to every mortgage provider and see if you can do better. Do the minimum required to make house livable and move in, then you can finish it bit by bit.

Did you cost the renovations at all? How come you run out of funds so quickly?


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## househelp (11 May 2008)

many thanks for the replies :

Can you clarify what payments you have missed:
Is it:
2 Credit Card, 1 Mortgage and 1 Loan
OR
2 Credit Card and 2 Mortgage 
*2 Credit Card, and 1 Loan*
*=========================*
How confident are you that 25K will complete the work?
*We have gotten quotes from : windows company, kitchen, tiler, electrician, plumber and plasterer to complete works, bathroom and minimum furnishing*
What's the BARE minimum required to make it livable?
*the above*
Is the house sellable in it's current state? 
*it would be but there is still a good bit to be done and i dont know how well it would do considering the amount that we would need to do on it.*
*=========================*
Good point. Sounds like you have no kids.? 
*have one and one due in oct, partner is covered over maternity leave, but the stress isnt helping!*
If you could at least get a bedroom/ kitchen and shower/toilet done then move back in and you can put the 800 a month rent into sorting out everything else? 
*we could but at the minute we cannot get that amount from mortgage provider.*
*=========================*
8% interest rate! This is completely mad, and will cripple you financially. You need to go to every mortgage provider and see if you can do better. Do the minimum required to make house livable and move in, then you can finish it bit by bit.

Did you cost the renovations at all? 
*yes, we did and were told by ebs that the funds would be accessable straight away, however as they took up to 2/3 weeks to come down this is what caused us to miss a payment and lead us to being refused the topup.*
How come you run out of funds so quickly? 
*It was over a few months, we went alot further with the renovation, taking down and insulating the house completely, leading to re-slabbing and plastering-its a 30 year old house and had no insulating. we redid all the electrics and plumbing completly. We had to take out the kitchen and bathroom as their virtually was none.*
================================
*Its a lovely house in a nice area, structurally it is perfectly sound and this has help with the valuation.*

*if we can get the extra money it will clear our loans and leave us just paying the mortgage which will be fine....just how to get there...*

*again thank you for all your replies*


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## so-crates (14 May 2008)

I hate to sound negative but I think firstly it is highly unlikely that in a 30 year old house (so built in the late 1970's) that there wasn't a functional bathroom (bath or shower & toilet & wash basin) and a functional kitchen (sink, cupboard, fridge and cooker/oven) of some description, it may not have met what you would consider necessary but I would be surprised unless the previous owners had literally walked off with the kitchen sink!! What we need at the most basic is something over our head, somewhere to store and prepare food and somewhere to perform basic ablutions, everything else is a frill no matter how expected it is in this day and age. 

Here comes the somewhat rude part (and I am sure you will disagree but...) I think you have an unrealistic view of what is liveable and what is not. 
1) Are there actual windows in this house? If so, it is summer, they don't need to be redone as a priority, you could probably even leave them a year although they may be single glazed and not in the best shape.
2) You don't need to tile (aside from showers) as a matter of priority and it is something that you can do yourself (or a friend/relative) - if not necessarily to the same high standard as a professional.
3) Even if it means replacing them in a year or two, a basic bathroom will cost less that €2000 with some work on your part. Tile only the parts that *need* to be tiled, i.e. over the bath (assuming you buy one), back of the shower and maybe over the sink. Anything other than toilet, washbasin and shower *or* bath and tiles for protection is really a frill - even if it seems basic.
4) Same utilitarian approach to the kitchen: sink, work surface, storage space, cooker, hob, fridge, washing machine. Firstly, some of these can be obtained second hand (electric goods in particular) and again, you don't have the money to spend so you need to look at cutting every frill out. Budget low as a target with a view to replacing in a year or two. Have a look at the IKEA website and then try and find it all cheaper.
5) Same again with the furniture, €200 will get you a double bedbase and mattress in Bargain City (actually is is €99 and €79), any price you get, look for something cheaper.
I think you need to chase down every bargain, and reduce every requirement to get that 25k you are thinking to spend down to less than 15k to be truly minimal (And that in my books is a bit generous a number really but you have small child and pregnant wife so you do need to be a bit more than frugal or else I would suggest just using a mattress on the floor, toilet and wash basin and bath with one of those rubber shower hoses to hold over your head and a table and stools as cheap as can be found - or as free as can be gathered and a €70 microwave and sink - everything else... can be bought later).
Perhaps if you were to go back to your lender with a smaller sum they might be more open to considering it. Changing to a lender that will charge you more is an option for you it seems, but it does come at a price in the long run. So even if you do change to a more expensive mortgage, I would suggest taking as little as you can by being as parsimonious as possible so as to minimise the additional cost of the more expensive mortgage.
Sorry to sound so harsh but you need to be realistic, you don't have the money so there is no point spending it.

Meant to add in there that you should also look at the free stuff websites in case they can supply you with some of the basics (though they may not match) as people always have things to give away and not all of them are broken or non-functional. So if you are in Dublin (although at that house price I would doubt it) [broken link removed] or www.jumbletown.ie have listings of things people have and want to give away.You would only have the cost of picking it up.


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## dereko1969 (14 May 2008)

can you sell the car? perhaps buy a very cheap runaround for the moment, it's a serious chunk of change coming out of your a/c every month. the 10k difference between what you get for the car and what you buy instead would go a long way towards paying for a kitchen and some tiling.


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## Hobbes T (14 May 2008)

househelp said:


> j
> 
> myself
> loan - ulster bank €8,000,€210 p/m
> ...



You had no business getting a mortgage with all those outstanding loans. The fact that you couldnt even clear those car loans and credit cards before going and borrowing another 162k shows youre not able to manage money. 

However now that youre in so much trouble, the way to get out of it is to:
- sell one of your cars
- stop paying rent and move into your house or move back with your parents.
- use the money from the car sale to make your house liveable.

This is basic stuff. The bank was very foolish to give you a mortgage.


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## eileen alana (14 May 2008)

so-crates said:


> I hate to sound negative but I think firstly it is highly unlikely that in a 30 year old house (so built in the late 1970's) that there wasn't a functional bathroom (bath or shower & toilet & wash basin) and a functional kitchen (sink, cupboard, fridge and cooker/oven) of some description, it may not have met what you would consider necessary but I would be surprised unless the previous owners had literally walked off with the kitchen sink!! What we need at the most basic is something over our head, somewhere to store and prepare food and somewhere to perform basic ablutions, everything else is a frill no matter how expected it is in this day and age.
> 
> Here comes the somewhat rude part (and I am sure you will disagree but...) I think you have an unrealistic view of what is liveable and what is not.
> 1) Are there actual windows in this house? If so, it is summer, they don't need to be redone as a priority, you could probably even leave them a year although they may be single glazed and not in the best shape.
> ...


 

Excellent post Crates, very sound advice there.  People's expectation are far too high today, its all to do with the keeping up with the Jones mentality


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## so-crates (14 May 2008)

Hobbes T said:


> You had no business getting a mortgage with all those outstanding loans. The fact that you couldnt even clear those car loans and credit cards before going and borrowing another 162k shows youre not able to manage money.
> 
> However now that youre in so much trouble, the way to get out of it is to:
> - sell one of your cars
> ...


 
I was harsh but I think you top me 

I don't think that the OP said he had two cars but perhaps he should consider dereko's suggestions, he can pick up something much cheaper than €15k though it does mean that he sells the current car below the value of the loan he has to repay - it may not be possible for him to get out of that one even if they want to if he finds he has to repay the full amount.

I would disagree with your assessment though, I don't think that the original mortgage was beyond their ability to repay or that the bank was foolish. I think they made some pretty poor choices after that point and the debt spiralled quickly. Starting with spending the money they were expecting prior to getting it and finishing with the possibility that the underestimated the liveability of the house as it was before making it much less liveable and at a significant cost. That he now envisions such a massive sum to make it liveable is in my estimation a measure of he expectations of a house, people manage on packing crates for tables and little camper burners for cooking on sometimes when they have to, I think they need to disabuse themselves of the notion that they can afford a fitted kitchen and someone to tile the place and fast.


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## DavyJones (14 May 2008)

I'm not a mathematician, so is this correct? Your paying out €2564 a month on loans/rent/mortgage. you and patner combined take home is €4300, this leaves €1736, thats roughly €434 a week to cover food/bills etc. I would write up a realistic budget and stick to it. Now is the time to make sacrifices in the short term so the long term is more comfortable. make savings, shop at adli/lidi, no clothes shopping, no going out. every cent should count. You will have to be very tight.


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## astraclub (15 May 2008)

excellent reply DavyJones and some other members.
You decide what you want? a nice relaxing future or a show off car and needless shopping and holiday
people complain Ireland is costly costly but let me tell you what, You can live with good life on minimum if you do calculation better,
Shopping: Tesco and Lidl (divorce Supervalue and petrol pump right now)
Dinner/lunch: take it from home, cheap and healthy
Cloths: buy them as per need, can go levis and some good shirt/tshirt no harm.
TV/Movie: stop sky right now, go free, Movie: RTE is no bad 
Car: you can buy a good car like Audi/BMW (old models but still OKAY in driving)
cell phone: bury them , use 1 company and call free, use off peak.
you dont need to stress much but yes, please move into house ASAP, bathroom is less than 2k and kitchen is same, once you move in,,you will see improvement day by day, and take swear that you will never ever take personal loan in your life again no matter what happens. wanna look for part time job couple of hours etc, PM me if you want some more advice or support,
good luck and i feel sorry for you buddy,


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## so-crates (15 May 2008)

astraclub said:


> ... and take swear that you will never ever take personal loan in your life again no matter what happens. ...


 
I'd have to disagree with you there astraclub, it is foolish to dismiss all options in a given situation and loans provide people with necessary liquidity options beyond their bank balance but within their means. However I would say that there does seem to me to be something of a cavalier attitude to loans, probably as a result of their being so easily accessed and their relative affordability. It would be best to consider personal loans more seriously before undertaking them.


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## Bronte (15 May 2008)

I too agree with Socrates advice, you have to move into the house now, in relation to tiling, for now use 2 or 3 shower curtains and do the child in a plastic tub if there is no bath,  it's not the worst thing in the world, you'd be amazed how many people have done this (I'm one of those people who slept on a matress and had cardboard boxes for tables...) if your wife is going on maternity leave and you have two cars sell the one that will give you the most money to do the bare minimum on the house.  Based on your current debt if you go with the 8% mortgage you will get into a lot more trouble and probably be selling the house in about a year.


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## astraclub (15 May 2008)

I meant to say --avoid personal loan ..its just wording ...
Aright


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## so-crates (15 May 2008)

Hobbes T said:


> You had no business getting a mortgage with all those outstanding loans. The fact that you couldnt even clear those car loans and credit cards before going and borrowing another 162k shows youre not able to manage money.
> 
> However now that youre in so much trouble, the way to get out of it is to:
> - sell one of your cars
> ...


 
Hobbes, it seems I own you an apology, you weren't at all hard. I hadn't checked any other postings by the OP, particularly this thread so I wasn't aware that most of that debt existed prior to the mortgage (I had assumed it was just the car loan).


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## so-crates (15 May 2008)

astraclub said:


> I meant to say --avoid personal loan ..its just wording ...
> Aright


 
ah understood. It was "swear"  and "never ever" - they are rather stronger sentiments than "avoid"!!


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## Bronte (16 May 2008)

I thought Hobbes had been a bit harsh too but I have just read the previous thread, disregard my previous advice OP because I now think you need to sell the house and move back in with your parents (or rent a hosue) and pay off all your debts before even considering buying a house again.  

I cannot believe a bank gave you a mortgage with all that debt, that is surely reckless lending.


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## phileasfogg (16 May 2008)

I don't think that the posters financial situation is that bad.  I think he is going through a bad patch at the moment mainly because of the 800 euro rent money.  If he gets the mortgage that he would like, his repayments will be 1300 a month leaving them with 3000 euro spending money each month and a loan to value mortgage of 84% which isn't dire enough to sell up  his family home for surely? 
If he pumped some of this 3000 euro into the mortgage he could easily get his loan to value down quickly enough to justify the loan consolidation. 

I do think that if it is at all possible, he needs to stop paying rent money.  Get in to the house, move home, etc etc, do everything in your power to get in a better financial situation and then hit every bank to try and get your mortgage top up (but not at 8%!!!!!).
I'm not sure his wife would take too kindly to the suggestions that she spend all day on her own in  a not-finished house, with two young children, no car, no oven, with only RTE1/Network 2 for company for 6 months. How will she get out to get milk if it rains?


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## so-crates (20 May 2008)

phileasfogg said:


> I'm not sure his wife would take too kindly to the suggestions that she spend all day on her own in a not-finished house, with two young children, no car, no oven, with only RTE1/Network 2 for company for 6 months. How will she get out to get milk if it rains?


 
She may not Phileas, but she wouldn't be the last and she certainly isn't the first person who has had to sacrifice something now to gain something more later. Nor would she be the first person to use an umbrella while pushing a pushchair or have to mind a child in a semi-finished house. Needs must so you do what you have to. However, who ever said you HAVE to spend €15k on purchasing a car?
I agree with you though, I think they can afford their mortgage and they can afford to do up the house, just not the way they have gone about it. From what I have read, they seem to be chronically indebted, not unaffordably so, but foolishly and unnecessarily so. And they seem to view more debt as the best way forward. The root cause of today's distress is an ability to spend tomorrow's money on today's luxuries.


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## Maid Upname (23 May 2008)

To original poster - i saw in my local paper an add for a pine kitchen island and dresser to match - perfect condition to make way for new kitchen must see .... if youd like me to pm you wording of the add let me know - but this is the kind of thing that might work well and look gorgeous in your new home - i wish you every happiness in it and hope your finances work out better soon.


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## Brianne (23 May 2008)

My late father used to say that the best peace was to know that the letters coming through the door were the ones with no windows on them!!! In other words , no bills. 
How on earth could a thirty year old house require so much money. Move into it, go to the free sites, like jumbletown.ie and dublin waste. So much nicer to sit on a second hand chair that you own than a beauty you owe money on. 
You've got good advise here , if the house won't fall down and has windows , go and live in it.
We started off with two borrowed single beds and four chairs and a table (all borrowed). If only jumbletown.ie was around then, when I look at it I think I could fit out a whole house with perfectly serviceable stuff for zilch.

Sorry to harp on but no good having champagne taste and beer money. 
Also, if you do things as you can afford them, and in my opinion , if at all possible one should aim for one debt only i.e a manageable morgage, then you will enjoy what you achieve much more.Cut up those credit cards ASAP and get a cheap car. The payoff will be in sleeping easily!!!!


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## Captin Sobel (23 May 2008)

I took 2 loans in my life so far, one as a student to go to the States on the J1, the other for my wedding ( 2 payments left, after 2 years!) , next one will be for my mortgage and that will be it for my life time.  

I do not understand the free credit culture that we have blindly accepted, I would always go without if I do not have the money.  It was all there in economics for the Leaving cert, discounted cashflows and Net Present value, how we choose to forget ...


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## ClubMan (23 May 2008)

Any chance people could stick to the topic in hand and post the letting off steam stuff and general ruminations on the state of the world elsewhere?


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