mortgage arrears, struggling with payments

Hi

I posted here about a year ago, and got some good replies.. (you can read back on the post if you wish negative equity, 3 kids, 2 rooms. low income)

Since then my husband has stayed working, Ive gone back 4 days, we are paying €880 to the crèche and we are really struggling to pay the mortgage.

Ive restructured my bank loan, and my credit union loan, we paid off the Credit card, overdraft with the bank loan and have taken it out over a longer term, we have reduced payments with Credit union, and have reduced everywhere else we can.

We are really still struggling with the mortgage, we did reduced payments for 3 months and Interest only for 3 months, we thought we would be fine when we came off the Interest only but we aren't, our repayments have now gone up because if the IO period.. we are on a tracker now after coming off a fixed rate last year.

We are thinking of approaching the lender and trying to come to some arrangement, we just can't keep being stressed like this, it's really affecting our relationship as my husband feels he should be able to provide more, we aren't entitled to any social welfare payments, and just don't know where to turn.

Should we try sell the house? I just want rid of it now, can't take the pressure of the whole lot.. we are now about 4 months in arrears (taking into account all the interest only)

Sorry the post is so long

Thanks

I will look back at your thread from last year but I think the best think for you to do is to fill out the money makeover section http://www.askaboutmoney.com/showthread.php?t=61289

You also need to make a list of all your outgoings and incomings. Start a spending diary.

Have you cut up the credit cards you had?

It's hard to advise when you list no figures so I suggest you think about filling out the makeover section.

yes have cut up the cards

basically

I earn 1400 per month
Husband earns 1400 per month
Childrens allowance 400 per month

Bank loan - 19,000
Credit Union - 17,000
Mortgage - 250,000 (38 years left) - 775 per month

880 to creche
360 to bank loan (re-structured and reduced)
200 to credit union ( reduced)
800 to shopping (nappy's & formula)
130 to life assurance
50 to home insurance (can't reduce, made a claim last year with leak)
50 for car insurance
30 for bins
150 for vhi (can't cancel due to medical issue's and no med card)
60 for medication for DD1 (Asthma meds)
20 for mobile credit (max)
50 for TV & broadband
100 to cover gas and esb bi monthly (have switched to BG for both)
80 for petrol (needed for work and dropping to creche)
100 for lunch's (we pack some day's but that drives up shopping bill)

our Daughter was doing a few classes and we have cancelled nearly all of them, we don't have a gym or anything like that, the only thing we could cut is the tv, broadband, which Im not willing to do as it wouldn't make a dent in the mortgage payment, this amount doesn't even cover clothing the kid's or doctor's bills, I have gotten plenty of hand me down's so not afraid of that.. DD1 is minded by family only smaller 2 in the creche and can't get any family to mind them.. our mortgage is 775pm at the minute so totally unaffordable

If you only earn 1400 a month is it really worth your while working ?

If you gave up work - would you be entitled to the medical card and eliminate the bills for :
150 for vhi (can't cancel due to medical issue's and no med card)
60 for medication for DD1 (Asthma meds)
------
210

880 - Creche fee's would go out the window
----
1090

50 lunch for the month if only 1 person is working
--------
1140

50 cancel the home insurance, you cannot afford it
-----
1190

20 bin charges if you recycle in the recycle centre once a month
------
1210

50 cancel tv and boradband - get free sat (150 one off installation
------ cancel broadband - you cant afford it)
1260

I can see your point, my worry would be that if I quit my job (large company) I wouldn't be entitled to claim my stamps for the 1st 9 weeks

you are probably right though it would be worth more to me financially, and it would cut out a lot of charges, can I stop paying the home insurance? I thought you had to have that if you have a mortgage?

the broadband is staying lol.. I am seriously working v.hard and my job is v.stressful and if I can't have one thing that's outside what I need to have well I don't know!

Thanks for the input though..

Don't cancel home insurance, you'd be left homeless if anything happens. And you are right, as the house is mortgaged, you'd have to have it insured.

How old are your children? Your childcare expense will be reduced once they go go school, if you can hang on until then. Also formula and nappies aren't forever, the sooner you toilet train your children, the sooner the nappy expense ends.

Can your husband get any extra work, evening, weekends, anything?

unfortunately we have quite a while to go Greta, our oldest is in school (6) not
paying any Childcare for her as family mind her after school, our son is 2 and a half so won't be going to school for 2 years, and our baby is 10months so nappys are here for a while, I trained my son before my maternity leave ended to reduce the cost of nappys (he was ready though too)

Husband can't really work any more hours he is already working 8 and a half hours a day, and sometimes I have to work late so he can't do that... my work is kind of shift, as in we do different shifts but none past 7 so that makes things harder as I struggle to collect the kids from the creche sometimes, Im really starting to think I would be better off not working.. it's terrible, I don't want to do that, but I need a break and we need to get rid of this house

Jenny its not the mortgage that is the problem. What you are paying is a manageable amount. It is less then you would probably pay in rent elsewhere.
The problem is the loans. You may have to go back to the CU and bank to see if these can be restructured further. How much have you in shares with the CU they may allow you to offset some off the loan.
Shopping can be reduced a little. You really need to spend some time browsing the supermarket websites to see where the deals are and buy the specials if you use that stuff.
Shop around for specials on Nappies and bulk buy them even the bigger sizes ahead of time. Its your third so you should have a good idea of what sizes and how long they will use them.

You need to keep a spending diary. write everything down.
shop around for all insurances when they are due for renewal.
What is the potential for you to move up a pay scale or promotional ladder at work and earn more money. Same for your husband. He as it sounds is not as long in his job so perhaps now he is in work he may be better looking around for a better paid job. It's always easier to get a job when you are in work.

Jenny also make sure you are claiming all your tax reliefs, medical, bins come to mind.

Thanks Niceoneted, I will definitely go over to the tax office next week and see if there is anything we can claim back for

I may have to go back to the lenders, but my issue is that with the unsecured debt they can bring you to court and Ive heard of people getting jail time? but at least with the mortgage they can only take the house oh I don't know what the best thing to do is, either way we will have to go back to Ulster Bank and get them to look at it again, they refused us a moratorium last year on the basis that you can only have one in the life of the mortgage, but I wish they would give us one now.. not that it will help but it would give us a bit of breathing room we are behind in a lot of payments at the minute

Have you applied for Family Income Supplement? Income limit for 3 children is currently €703 childrens allowance is not included in income. based on income levels you have given your weekely income is approx €646, so you would prob be entitled to about €34pw FIS. There are other requirements you have to meet e.g. work over 19 hours per week but it seems like you would qualify. I would def recommend applying for this as soon as possible see www.welfare.ie

Also have you appled for a medical card? They will take into account your mortgage childcare costs & travel to work costs. I have slightly higher income than you, higher mortgage but same no of children & no childcare costs & qualified. its worth applying for it, also if you get it the maximum rate of Universal Social Charge is 4% so your take home pay might increase too. You would probably get doctor only card at the very least check out www.medicalcard.ie it has on online application system & will tell you immediately if you qualify or not.

Happy Mothers Day

Jenny don't be worrying about jail time. There are people out there who robbed this country of billions and nothing is being done to them. As long as you are making an effort to repay that will help all the way.
Keep in touch with the bank and keep a paper trail. You will need to look at getting some extra income in really.
Have you anything you can sell to bring in cash.

When you say House Insurance - is that to cover contents - damage etc ? Or is that to cover the mortgage incase of death ?

You only need insurance to cover the cost of the mortgage on death...that currently costs me 150 euro a year.

On the downside - if I do have trouble in my home - I will have to repair it out of my own pocket. @50 euro a month*12 = 600 a year seems more likely to include home and contents insurance.

Your mortgage is very reasonable - and not the cause of the problem. I would not be selling up if I was you- you would pay the same if not more in rent as already mentioned by another poster. You should be pretty happy that your only paying this amount. Alot of people out their are paying in region of 1200 a month...the average price to rent in the Dublin 15 area is 1000 so you would be actually saving around 200 a month by keeping your house.

Your loans,child care fee's and medical stuff are the issue....the loans will have to be re-structured again but I dont know what this will save you as they only equate to 560 yet your childcare fee's equate to 880!

I dont think you should put anymore restructuring on your mortgage..it is the most important bill to pay and the one that costs the most if you go to interest only or take a moratorium.

Alexandra, this is not quite correct, you also have to keep the property insured as well as your life, it is a condition of the mortgage. Not to mention the fact that if it did go up in flames, you would not have a house and would still have the mortgage.

jenny said:

the broadband is staying lol.

Click to expand...

Jenny - you are right to keep your broadband - if you have no budget for entertainment at least you can escape online for a bit. The spending diary is a sensible idea, and please do shop around. Another thing which might help you is to create a simple excel file and total up all your outgoings. When you see all the figures front of you, you will be able to research cheaper alternatives. Then total up all the alternatives and see what you save. FIS is worth trying for, as is medical card - you should get a doctor only card on those figures. Try keep your chin up, I know its very hard especially with small children. The whole country is struggling with debt at the minute and there are no magic answers or quick fixes. Keep chipping away at your debts as best you can for the moment, things will get better, even if it takes some time. Take care.

If you manage to get the GP or Medical Card, see if there are are community creches in your area. You will pay a subsidised rate. Contact your local County Childcare Committee for a list.

Jenny I'd just like to say I admire you and your husband for working so hard and doing your best to pay down the debt.

The house is not the problem it's the fact you have so much debt and expenses but not enough income. Also living in such a small space for 5 of you must be stressful in itself.

Have you thought about contacting Mabs, they are excellent at helping people in your situation. They can help you negotiate with the lendors.

You will in any case have to go back to the Ulster bank to renegotiate. Is your bank loan also with them? Would they be willing to add this to the mortgage so that you would be paying a lower rate of interest?

Also this particularly difficult period will come to an end. Eventually you will have all the kids in school and that will free up the creche fees. You are not going to jail so don't worry about such a thing.

Thanks Bronte,

yes it's not easy at the minute, but we know that we are lucky in many many ways, so trying to keep that in mind.

Didn't sleep at all lastnight with the worry of it all, we have contacted the guy from Ulster Bank that we dealt with before so waiting to hear back from that

Contact MABS, and also Citizen Information Centre, to make sure, you get all the benefits you are entitled to. Have a look through the "Welfare" section of this forum, it has some useful info. There is a link there somewhere to the guide to social welfare that could be useful for you.

Another idea - could your husband find a job with night shifts? That is usually a bit better paid than day shifts and also would allow to reduce or eliminate childcare costs. Not easy to work night shifts and take care of children during the day, but some manage to do it.

Also childcare usually costs more for babies than for preschoolers, so as your children get older, your childcare costs should be going down, even before they start school.