Mortgage repayment difficulty

chapelizod1

Hi, I'm new to boards.ie so forgive me if I'm doing anything wrong - or if I'm in the wrong forum.
My problem is that I'm anticipating having difficulty meeting my mortgage repayments in the new year. My story is that my fiancee and myself bought a house in Chapelizod 2 years ago. Both of us have been working and barely making the monthly repayments - we're also saving for the wedding. The first problem occurred recently where my finacee was cut back to a 20 hour week. Now she has been told that she's going to be let go in the new year. She's devastated. She works in admin and if she's lucky to get another job it won't pay as well as her current job.
I'm not sure what I'm looking for here - advise I suppose. But I'm looking for ways to get some extra income. I suggested maybe me doing bar work in the evening but she won't have that.
Any help would be appreciated.
Oh, almost forgot, selling the house is not an option as we lose about 30% of what we paid for it.

rockbeer

What can anyone say? Sounds like she's just going to have to get a job.

I don't want to turn this into a character assassination, but it's hard to have much respect for someone who won't do what they have to to pay the bills. She might not like the idea of bar work or whatever but she's going to have to do something. It's just reality.

Do you have to get married? That will probably cost you a fortune just when you can't afford it.

Do you have a room you can rent out?

spockety

Tough break.

Look at areas in your life where you can improve in terms of your outgoings.

Your wedding savings sound like they will make a good rainy day mortgage fund. Unless you've committed already I would postpone the wedding until you are in good financial footing. Maybe get married on the quiet in a registry office so you can improve your tax situation, and hold off for 'the big day out' wedding at a later date?

The_Conductor

In the first instance- you need to organise to meet with your mortgage lender immediately- before repayments become a problem, to see what options they have that are available to you. MABS will also give you advice in this respect.

While you say selling is not an option- at the end of the day- if you cannot afford to keep the property- it may become necessary to seriously consider selling.

Have you thought about the rent-a-room scheme as a possibility towards helping with the mortgage repayments? You're in Chapelizod- which is a very reasonable area- you should be able to get someone fairly easily.

Sorry to hear of your difficulties- but seriously- you need to address this immediately- not wait until the new year when you are unable to make the repayments.........

The_Conductor

chapelizod1 wrote: »

Hi,
thanks for the reply, what's the rent a room scheme?
thanks

Its a scheme set up by the Revenue Commissioners to allow people earn up to 10k per annum from renting rooms in their house/apartment without having to pay any tax on it (note: if you go over the 10k- you have to pay tax on the lot).

I know its not what you signed up to- sharing with strangers- but as a short term solution it may buy you some breathing space until such time as you're back on a more sounder financial footing and can afford to cover the mortgage from both your incomes more comfortably.

S.

gurramok

Also, you may have to consider to go to MABS to help you sort out your financial situation if the lack of a job persists for the 2nd earner.

Climate Expert

Both of us have been working and barely making the monthly repayments

So when you were at your strongest you could barely afford repayments? Looks like you've stretched too far without any stress testing. Now the stress has come and you'll have to deal with the consequences.

The_Conductor

Climate Expert wrote: »

So when you were at your strongest you could barely afford repayments? Looks like you've stretched too far without any stress testing. Now the stress has come and you'll have to deal with the consequences.

At least interest rates have fallen considerably, and the prognosis is that there are further falls to come........

AARRRGH

If your life is becoming unpleasant and you're stressed all the time...

1. Forget about an expensive wedding. This is a complete luxury item and is unnecessary. Your financial and personal health are much more important.
2. Rent out the rooms or get a part-time job. Personally I would rent out one of the rooms to a quiet female.
3. Cut out all unnecessary expenditure - lattes, gym membership, sky, etc. If possible give up alcohol.

I have a lot of sympathy for you and your partner (I was once unemployed too... it sucks indeed) but with a few adjustments you will be fine - basic living is very cheap.

astrofool

Marriage costs very little, it's the wedding that the money is being spent on, and it can also be done very well without costing the earth.

EKRIUQ

Just as a quick fix, which may relieve a bit of stress for the short term until your other half gets a new job depending on your mortgage provider.
But a lot of mortgage providers offer a break in a mortgage for 3 months and the amount is just put at the end of the mortgage may end up paying an extra €10 a month for the remaining of the mortgage. I know AIB offer this service but unsure about other providers.

johnnyskeleton

Namesco wrote: »

Just as a quick fix, which may relieve a bit of stress for the short term until your other half gets a new job depending on your mortgage provider.
But a lot of mortgage providers offer a break in a mortgage for 3 months and the amount is just put at the end of the mortgage may end up paying an extra €10 a month for the remaining of the mortgage. I know AIB offer this service but unsure about other providers.

Most banks will offer this - a "moratorium". Some banks might also offer a 6 month interest only option or similar.

All good advice so far, sorry if there is repetition but there is a list of things that you can do:

1) As SMC says, your bank should be first port of call. Moratorium, interest only, skip months etc might help you. If nothing else, contacting them first will stop them sending you nasty letters, unpleasant phonecalls and (hopefully it won't get that far) a Landlord & Tenant Civil Bill. If you do go into arrears answer the phonecalls you get from the bank, be polite and honest and don't piss them off, as this only costs you more.

2) Check with your insurance company. Many people took out a Mortgage Repayment Protection Policy (MRPP, sometimes a Home Owners Protection Plan, or HOPP). If your partner took out one of these, it will help pay the mortgage for up to a year while she looks for a job.

3) If your partner don't have a job lined up before she finishes her current job, she should sign on asap. Even if she gets a new job after a few weeks, it will mean an extra layer of security. This is about €200 extra per week which should help a bit. There is absolutely nothing wrong with going on the dole.

4) She should speak to the social welfare about mortgage interest relief. They most likely won't give this, but if you don't ask don't get.

5) Check to make sure you have registered for Tax Relief at Source (TRS) A surprising number of people haven't. It doesn't matter that your partner is not working at the moment, you can still apply.

6) Look at your outgoings. If you are paying a massive amount off a credit card or Hire Purchase loan (e.g. for furniture, computer etc) you should pay this off if possible. You end up paying far more interest on these than you do on normal loans or on a mortgage. Find cheaper ways to do everything - transport, clothes, food can all be got for less in the right place. You can go to askaboutmoney.com and they have a section called "Money Makeover" where people will advise you on budgeting etc. Be warned however, do not listen to their advice on property.

7) Rent a room, borrow off family, if possible rent the place out and move home with the parents to save money.

8) A cheap wedding sounds like a good idea. Being very cold about it, if you are married you can absorb your wife's tax credits and thus save money (this is in addition to the other benefits of marriage. [Note that this is not tax or financial advice, and you should follow your heart etc]

9) Finally, and while you have said you don't want to consider this, you might have to sell the house. If you can get a good offer e.g. 20% off what you paid for it, it's worth serious consideration. Ok, you may lose your deposit and/or be left with a sum to pay off to the bank, but if house prices keep falling and you can't afford to keep the house, you would be much better off, financially and emotionally to sell the house now rather than in 2 years time when the courts force a sale hitting you with a massive arrears balance, interest, penalties, charges and legal costs. That route would also destroy your credit rating and it can often be emotionally devastating for the people involved. You may not like to think about this, but I'm afraid you have to. It is your duty to yourself and to your partner that you look at all the options from a cold standpoint now rather than ignoring it and letting the problem get worse.

For what its worth, I hope your partner gets another job and you don't have to do any of the above (well, except for the TRS and payin off credit cards), but best of luck whatever happens.

Moonbeam

Does your mortgage protection not cover one of you loosing your job?

The_Conductor

Moonbeam wrote: »

Does your mortgage protection not cover one of you loosing your job?

It may very well not. Mine only covers me if I die......:(

Frowzy

My heart goes out to you to have found yourself in this position!

I agree with the other posters that you should contact your bank first. I used to work in a bank and there are lots of solutions for people in your position! Believe me it's more hassle for them to take you to court for money, they prefer to come to an arrangement with you first.

If you are considering renting out a room remember that you do need to inform your mortgage provider that you are doing this, you also need to inform your house insurance company, there may be an extra premium to pay, but it's better to sort it out as if anything happens.... of course they won't pay out.

I hope it works out! Best of Luck!
F

Eurorunner

If your in this situation, sounds like you need to get ads on daft.ie straight away. Having to share your house is not ideal - but its not even something that needs discussing. You need the money - get rent in asap.

Frowzy wrote: »

If you are considering renting out a room remember that you do need to inform your mortgage provider that you are doing this

Just curious but why do they need to be informed? I would have thought the only time they would have been interested would have been at mortgage app. stage - so that this could be taken into account with regard to ability to pay.

SimpleSam06

Great advice offered here - might I suggest this thread be stickied, as there will no doubt be many, many more like it over the next few years?

El Stuntman

just a thought: the average peak to trough falls following the bursting of asset price bubbles (such as the Irish property bubble) is 70%, your property is likely to be worth a lot, lot less before we hit the bottom

this is something you should bear in mind if you are contemplating a sale; taking the hit and realising a loss now may be preferable to being stuck in this house for a decade or more in negative equity.

Also bear in mind that selling at least gives you mobility; with the jobless totals forecast to hit 400k+ here and the prospect of a long and deep recession, mobility could be your 'ace in the sleeve' i.e. being able to migrate quickly could be a great advantage to you in the near future.

with this in mind, I would advise you to sell now. I know this is difficult on both an emotional and financial basis but things are going to get much, much worse in this country.

Frowzy

Eurorunner wrote: »

I would have thought the only time they would have been interested would have been at mortgage app. stage - so that this could be taken into account with regard to ability to pay.

You could be right, it may only apply if you are renting the whole house out (Then you should be changing to a commercial mortgage anyway). Most people buying a house would have signed a Family Home Declaration. Obviously renting out part of the house would change this. It's only a suggestion, and you'll need proper advice on this, I'm not an expert...
F

johnnyskeleton

smccarrick wrote: »

It may very well not. Mine only covers me if I die......:(

If you have life insurance as well (which most banks require) then you're doubly insured. Why not consider getting rid of MRPP so, it's costing you money with no potential benefit?

IanCurtis

I laugh at the term "lodger", like you're doing them a favour.... "your-mortgage-repayer" or "saving-your-sad-broke-ass" might be more appropriate terms :rolleyes:

Eurorunner

chapelizod1 wrote: »

On someone on this boards suggestion we contacted http://www.accommodationmondaytofriday.ie and they were very helpful. Eventhough they're only starting up, they have a good FAQ section with some good advise. Plus we can put our room up on they're database for free for the time being.

Sharing ads are free on daft too - and thats where most people will be looking.

chapelizod1 wrote: »

But even if we got 60 euro a week that would be 240 euro a month which would make a nice dent on the mortgage.

Some might find this pedantic but its actually €260/month. Sorry, but it makes a difference at the end of the year. Thats an extra 240 a year per room.:D
BTW, I just checked daft and there are 12 rooms listed for chapelizod, and the monthly average for these 12 is €500/month - so I think your selling yourself short just a little bit!

chapelizod1 wrote: »

I stand corrected but I think all they do is match up a potential lodgers with a homeowner, but the thing I find great is that they don't release your name, number or address to the public.

The same on daft. You don't have to give house no. In fact, if you don't want to give the street, thats entirely up to you.
With the rent-a-room scheme, there is no contract as such. Lodgers stay in your house under 'license agreement'. That means that you have a lot of control over the situation. If things are not working out, you can give them notice - simple as. 'Adequate' notice is generally viewed to be the same as the period they pay for ie. paying weekly = a weeks notice unless you have an firm agreement in place with the tenant with regard to a longer notice period.

<EDIT> If you do get 500/month for each room, keep an eye on the limit. If you rented solid for the whole year, you would exceed the 10k threshold. However, the transient nature of people who rent rooms means theres a high probability there would be a break in occupancy</EDIT>

ionapaul

I'll tell you one thing; between the three / four November 2008 registered posters (each of them named after an Irish location, coincidentally) in this thread, they certainly managed to get that wonderful new website's URL hyperlinked a good half dozen times. Fair play to them. Now, what was that website again....www.roomsfridaytotuesday.com or something?

uncanny

ionapaul wrote: »

I'll tell you one thing; between the three / four November 2008 registered posters (each of them named after an Irish location, coincidentally) in this thread, they certainly managed to get that wonderful new website's URL hyperlinked a good half dozen times. Fair play to them. Now, what was that website again....www.roomsfridaytotuesday.com or something?

Hi ionapaul,

Wow, that sounds like a great website www.roomsfridaytotuesday.com. I will certainly be giving that website www.roomsfridaytotuesday.com a look.

In fact, for someone looking for a room from friday to tuesday a website by the name of www.roomsfridaytotuesday.com sounds like the perfect solution.

By the way, did I mention www.roomsfridaytotuesday.com yet?

TestTransmission

uncanny wrote: »

Hi ionapaul,

Wow, that sounds like a great website www.roomsfridaytotuesday.com. I will certainly be giving that website www.roomsfridaytotuesday.com a look.

In fact, for someone looking for a room from friday to tuesday a website by the name of www.roomsfridaytotuesday.com sounds like the perfect solution.

By the way, did I mention www.roomsfridaytotuesday.com yet?

Lol,wonder who you work for.

The_Conductor

Closed.