Trapped in One Bedroom House

Sugarcake

My Husband and I bought our home for €245k in 2006, it is a One Bedroom Cottage which we hoped to renovate and extend. In 2010 we got married but about a month before our wedding my husband was made redundant and everything started to go pear shaped. I was pregnant also which was always the plan and that we wouldn't change for anything. We found ourselves falling behind in many repayments but he always found work but never permanent and we paid what we could, we never missed a single mortgage payment though. Now our child is almost 3 and we are still in the same one bedroom house but it is becoming more and more difficult. My husband is now in a full time job but his salary is no where near what it was years ago. We cant borrow to extend as we got into arrears on loans etc so we are still struggling to pay them, after our Mortgage, Bills, Repayments, Childcare, food etc we literally have zero left. We are both pretty miserable at this stage, every day is such a struggle, our Child pretty much keeps us going.
Our Home is our main struggle, the location we hate and spend most of the time on the road, we are about half an hour away from family. If we lived closer to family life would also be so much easier for our child. Our house is old and small so space is limited also and we really want our child to have their own room as soon as possible.
My husband thinks because the house is so old renting really isn't an option as there is always so much maintenance with water etc involved. Plus our roof is leaking and we cant even afford to fix this now. We recently valued the house also for €75k so no way will PTSB allow us to sell so this is not an option.
I wish I could close the door on the house and forget about it at this stage and he is the same, it causes every argument we have, we just feel so trapped there. I have looked at rental houses and we could easily and comfortably afford to rent in the area we want if we didn't have out mortgage of course...but we do and cant afford both.
Can anyone give me any advise, we need to make changes but don't know where to start. We just have no quality of life at the moment. We don't spend stupidly, seldom go out or treat ourselves to anything.
I hope someone can help with their advise. Thank you.

No Pants

Sugarcake wrote: »

We don't spend stupidly

Apart from buying a house that's too small, for an amount that you can't afford, in a location that you hate.

I understand that the housing market was crazy and I'm sorry about your work situation and I hope that it gets better soon, but I really don't understand the location bit.

GetWithIt

No Pants wrote: »

Apart from buying a house that's too small, for an amount that you can't afford, in a location that you hate.

I understand that the housing market was crazy and I'm sorry about your work situation and I hope that it gets better soon, but I really don't understand the location bit.

The OP is in a tough position and I don't think responses like that are in any way, shape or form helpful.

OP, leaving the maintenance issues to one side, what is the most you could reasonably get in rent on the property?

What type of mortgage do you have - tracker hopefully? What are your monthly repayments?

No Pants

GetWithIt wrote: »

The OP is in a tough position and I don't think responses like that are in any way, shape or form helpful.

OP, leaving the maintenance issues to one side, what is the most you could reasonably get in rent on the property?

What type of mortgage do you have - tracker hopefully? What are your monthly repayments?

The affordability and house prices I think are cut and dried now, everyone understands what happened and maybe how to avoid it in future. I think my question about the location is relevant. If the OP doesn't understand how they made the mistake about the location previously, then in five years time they could also find themselves in a location that they don't like any better.

Sugarcake

Thank you for the replies.

No Pants - The location is important now, it wasn't as important before we had our child, we had researched the area but obviously not enough. The main problem with the location is that it is literally in the middle of no where and not near any family or friends which is very difficult when you have a child. Yes it was a huge mistake but we have made it now and in hindsight we would not have bought that house in that location.

GetWithIt - Our mortgage is €1000 per month, yes thankfully we are on a PTSB Tracker, we are blessed with that. To rent in the area we would like i.e Close to Family, Friends and also convenient to both our workplaces we would get a 3 Bedroom for €600 to €700. As our own home is only One Bedroom I think we could be lucky to get €400 per month. I think we might also loose our Tracker along with our Mortgage Interest Relief if we rented out our home?

The_Conductor

PTSB are one of the easier lenders to deal with.
Yes- you'd loose Mortgage Interest Relief- its being phased out anyway- but it only ever applied to owner occupiers.
Vis-a-vis the tracker- ask your lender- you're never going to know unless you do. They may take it from you- but would that be the end of the world?

If you do let out the property- the rental income is taxable income. You have some deductions you could make (most notably 75% of the mortgage interest) however. If you were to let it- you would have to fix the roof and any other issues- before you could legally let it.

Its not ideal- at the moment- and unfortunately there are a lot of people in not dissimilar situations to yours.

I know you're not going to like what I'm going to say- but you need to keep on top of your payments, try to mend your credit record and just keep going. We do live for our kids- lord knows there is damn all else left to live for. Your child is 3 now- they may possibly be eligible for the free childcare year starting in September- which if they're in formal childcare- is worth 62.50 a week, which means you'll be 250 a month better off than you are at the moment. Once they start school- you won't have the same childcare costs- of course you won't have the opportunity to work fulltime either- but your bills will be a lot lower.

There is light on the horizon- childcare costs are the killer for a lot of people- to be honest I genuinely don't understand how or why the government don't do something about childcare.

It will take a year or two- but things will get better- and once your finances are on a sounder footing you'll be able to start on doing your extension over time. At the moment- is it possible to put a futon or a fold out bed in the living room for your 3 year old? Do you have any options or possibilities there?

It really is the case that you're just going to have to bide your time- and as your childcare bills decrease, you'll have a little extra to start on fixing the roof and doing improvements/renovations/extensions etc.

Its far from ideal- and while you may disagree with me- you are making the most of a far from ideal situation.

Potatoeman

While I empathise with your situation there is not much anyone here can do for you.

A house is a long term commitment and there is never a guarantee that prices will stay high. Never listen to property ladder spin and buy what you dont want. If more people stayed out of the market when it bubbled the problem would be far smaller.

On the bright side if you bought a bigger house you would be unable to make the payments now.

Alias G

No Pants wrote: »

Apart from buying a house that's too small, for an amount that you can't afford, in a location that you hate.

I understand that the housing market was crazy and I'm sorry about your work situation and I hope that it gets better soon, but I really don't understand the location bit.

The OP is looking for advice, not a lecture. You should prob trot on on your high horse elsewhere. I think the whole country is aware of the grim reality of poor financial decisions at this stage but cheers for the reminder anyway.

OP, I guess talking to your lender is really the most practical advice you are going to get here. I hope you can work something out.

No Pants

Alias G wrote: »

The OP is looking for advice, not a lecture. You should prob trot on on your high horse elsewhere. I think the whole country is aware of the grim reality of poor financial decisions at this stage but cheers for the reminder anyway.

OP, I guess talking to your lender is really the most practical advice you are going to get here. I hope you can work something out.

That's considered a lecture now? The OP made a statement and I disagreed with it using various points. This is still a discussion forum, right?

I spent over a year on the dole a couple of years ago. We managed to keep the mortgage ticking along with a little understanding from the bank. Now back working and everything is okay. Hoping it stays that way. However, I bought a house that I wanted in an area that I was happy with. These factors were always in my control.

Potatoeman

Alias G wrote: »

The OP is looking for advice, not a lecture. You should prob trot on on your high horse elsewhere. I think the whole country is aware of the grim reality of poor financial decisions at this stage but cheers for the reminder anyway.

OP, I guess talking to your lender is really the most practical advice you are going to get here. I hope you can work something out.

Now is the time for lectures as those that spoke out during the boom were shouted down and laughed at. We had to listen as people tried to justify the ever increasing prices. I work with people from all over Europe and they could not believe the attitude during the boom and the price of substandard small property.

Alias G

No Pants wrote: »

That's considered a lecture now? The OP made a statement and I disagreed with it using various points. This is still a discussion forum, right?

I spent over a year on the dole a couple of years ago. We managed to keep the mortgage ticking along with a little understanding from the bank. Now back working and everything is okay. Hoping it stays that way. However, I bought a house that I wanted in an area that I was happy with. These factors were always in my control.

You're right it is a discussion forum and the topic at hand is practical steps that the OP can take in light of their predicament. I'm glad to see you have offered something useful in your most recent reply but there are plenty of other threads on this site where the opinion contained in your original post would have been far more appropriate.

snubbleste

Have you considered taking Ben Dunne's advice and going bankrupt in the UK? Obviously it is not easy
A €170k+ loss is nasty and it looks like it is seriously affecting your relationship.

Sugarcake

Thank you for the replies, all make sense.

I really wish No Pants I did choose more wisely, I didn't and things haven't work out, I am just looking to see if there is a way around it. Like so many people I work hard, I always have done, I have been lucky enough never to have claimed any type of Social Welfare apart from Maternity Benefit. As I said we also never missed our Mortgage Repayments. I am just putting my scenario out there to see if anyone else can see something I am missing, if there is any other solution to my problem. We can see our stupidity every single day, the way we feel now is that our son is also suffering because of our stupidity.

I know in about 3 Years time we should be in a much better place financially, when old debts etc have been paid. I totally understand so many people are in very similar situations, my husband and I are thankful our home at least has a big garden, there are people out there that are in our situation but in One bedroom Apartments with a Toddler. I just keep thinking there has to be a way around this. You are right Conductor something should be done about Childcare but then you will start getting the argument that why should others pay for our Children, at the moment if I were to give up work we would be €100 down per month if you consider Childcare, Petrol etc. With my Husbands line of work we could not take this risk and at the end of the day I would not sit at home every day either, we are in a completely isolated area.

I am going to contact PTSB and see if they can advise us in anyway.

Thanks again for taking the time to reply.

Sugarcake

snubbleste wrote: »

Have you considered taking Ben Dunne's advice and going bankrupt in the UK? Obviously it is not easy
A €170k+ loss is nasty and it looks like it is seriously affecting your relationship.

I have not heard anything about this? I am sorry as you can probably tell Finance is not our area of expertise

No Pants

Keep working, keep looking for stable and permanent work and keep paying the bills. The good news is that your child doesn't care about how many bedrooms the house has. Keep feeding and clothing him, spend time with him and take him to public parks in your spare time.

Sugarcake

No Pants wrote: »

Keep working, keep looking for stable and permanent work and keep paying the bills. The good news is that your child doesn't care about how many bedrooms the house has. Keep feeding and clothing him, spend time with him and take him to public parks in your spare time.

All of which we do and will continue to do. We will keep going, and keep hoping

Ray Palmer

The best thing I can think of is learn how to do DIY. You could build yourself an extension and it would be the cheapest option. Maybe pay for a shell to be built and do the rest. If you can't generate any extra money then using your labour for something you need seems pretty sensible.

You can also trade your skill for other peoples' skills on some websites.

The longer you leave the roof the more expensive it will be.

By no means would I say it is easy to motivate yourself to do this but you can do it. You will also feel proud of what you achieve.

Using Freecycle and the like you may even get the materials free, certainly a window and door.

GetWithIt

Sugarcake wrote: »

GetWithIt - Our mortgage is €1000 per month, yes thankfully we are on a PTSB Tracker, we are blessed with that. To rent in the area we would like i.e Close to Family, Friends and also convenient to both our workplaces we would get a 3 Bedroom for €600 to €700. As our own home is only One Bedroom I think we could be lucky to get €400 per month. I think we might also loose our Tracker along with our Mortgage Interest Relief if we rented out our home?

I wouldn't be too concerned out the Mortgage Interest Relief. As The_Conductor notes, it ends completely in 2017 and you have had 7 years out of it so far. I believe it moves to a lower rate after that time period anyways so the benefit going forward would not be as great as it had been.

You "shouldn't" attract a tax liability with regards the rental income with the numbers you've supplied. Your interest payments far exceed the income.

Also, I wouldn't necessarily assume an income of just 400 euros. Look at the Mortgage Supplement rates for your county.

http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/supplementary_welfare_schemes/rent_supplement.html

At the lower end of the market these tend to create a floor.

There may be options in relation to renting to the Council under one of their schemes. Again, your property may achieve a disproportionately high rent as there tend to be few rural properties in the rental market.

Retaining the tracker is key. Talk to your bank.

At worst you're talking about a gap between rental income and expenditure of 300 euros per month - along with the work involved. Would you pay this for the extra living space and peace of mind?

Sugarcake

Ray Palmer wrote: »

The best thing I can think of is learn how to do DIY. You could build yourself an extension and it would be the cheapest option. Maybe pay for a shell to be built and do the rest. If you can't generate any extra money then using your labour for something you need seems pretty sensible.

You can also trade your skill for other peoples' skills on some websites.

The longer you leave the roof the more expensive it will be.

By no means would I say it is easy to motivate yourself to do this but you can do it. You will also feel proud of what you achieve.

Using Freecycle and the like you may even get the materials free, certainly a window and door.

Thanks for the reply Ray. My husband is brilliant at DIY and generally anything at all construction related. He has been doing the workings and for him to do all the work himself and I mean all of it, including hire of the equipment and materials we are looking at approximately 10k and that is a small extension 40sqm (not sure that size is right). That would be without finishing's such as floors, internal doors etc. We spent a couple of Saturdays going to reclamation yards to see what we could use, very little to be honest, it is cheaper to buy new blocks but roof slates and bits like that we can get second hand. I have been living on Buying and Selling Websites too, keeping my eyes peeled for bargains. He would have to take about two weeks off work is what he reckons, which is all doable but we don't have the funds and there is no way around that. Our family, most of them are pretty handy have also offer their time to help, so we are not at all stuck that way. I have no problem slogging it in an unfinished extension for a few years, we just cant get it off the ground.

Sugarcake

GetWithIt wrote: »

I wouldn't be too concerned out the Mortgage Interest Relief. As The_Conductor notes, it ends completely in 2017 and you have had 7 years out of it so far. I believe it moves to a lower rate after that time period anyways so the benefit going forward would not be as great as it had been.

You "shouldn't" attract a tax liability with regards the rental income with the numbers you've supplied. Your interest payments far exceed the income.

Also, I wouldn't necessarily assume an income of just 400 euros. Look at the Mortgage Supplement rates for your county.

http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/supplementary_welfare_schemes/rent_supplement.html

At the lower end of the market these tend to create a floor.

There may be options in relation to renting to the Council under one of their schemes. Again, your property may achieve a disproportionately high rent as there tend to be few rural properties in the rental market.

Retaining the tracker is key. Talk to your bank.

At worst you're talking about a gap between rental income and expenditure of 300 euros per month - along with the work involved. Would you pay this for the extra living space and peace of mind?

Thank you GetWithIt. As soon as I can get a Quiet moment in work I am going to contact PTSB and see what my options are, if any of course. I suppose I need to ask and see or I will never know for sure.
That is really interesting regarding Rental Prices. I actually think our house would be really attractive to someone who keeps pets, it has a nice space. There are also many Riding Schools and Polo Clubs close by, this may be attractive to the right person. I will definitely contact PTSB today, thank you for the advice and also the information, I really appreciate it.

InishGael

Have a look at http://www.askaboutmoney.com/ - excellent advice website. Complete Case Study in section 'Mortgage Arrears, Personal Debt and Negative Equity'. There are some well informed contributors who call it how it is.

the_syco

Sugarcake wrote: »

Our house is old and small so space is limited also and we really want our child to have their own room as soon as possible.
My husband thinks because the house is so old renting really isn't an option as there is always so much maintenance with water etc involved. Plus our roof is leaking and we cant even afford to fix this now.

Since you seem to be stuck there, I'll just concentrate on the above.

How old is old? And what have you gotten done to it? I ask as there may be a grant available somehow.

Also, if getting someone to look at the roof to fix it, maybe look for any tradespeople that are on the dole looking for a bit of cash. They won't be insured, though.

Ray Palmer

Sugarcake wrote: »

Thanks for the reply Ray. My husband is brilliant at DIY and generally anything at all construction related. He has been doing the workings and for him to do all the work himself and I mean all of it, including hire of the equipment and materials we are looking at approximately 10k and that is a small extension 40sqm (not sure that size is right). That would be without finishing's such as floors, internal doors etc. We spent a couple of Saturdays going to reclamation yards to see what we could use, very little to be honest, it is cheaper to buy new blocks but roof slates and bits like that we can get second hand. I have been living on Buying and Selling Websites too, keeping my eyes peeled for bargains. He would have to take about two weeks off work is what he reckons, which is all doable but we don't have the funds and there is no way around that. Our family, most of them are pretty handy have also offer their time to help, so we are not at all stuck that way. I have no problem slogging it in an unfinished extension for a few years, we just cant get it off the ground.

Reclamation yards are actually expensive. You really would be surprised at the amount of building materials given away for free. It will take longer to get stuff but the price will be right. Skip diving is also an option but don't forget to ask for permission. The skip companies may let you visit their depot too if you ask.

40sqm is a huge extension probably the same size as your current house if not bigger. You can always do the extension over time. One extra room could be done for under 2k with enough elbow grease.

Channel 4 have a show on about reclaimed interior design stuff and worth watching for ideas. Strangely the one last night showed a coffee table I made myself out of a washing machine about 20 years ago as a new funky design.

Sugarcake

the_syco wrote: »

Since you seem to be stuck there, I'll just concentrate on the above.

How old is old? And what have you gotten done to it? I ask as there may be a grant available somehow.

Also, if getting someone to look at the roof to fix it, maybe look for any tradespeople that are on the dole looking for a bit of cash. They won't be insured, though.

The house is 100 Plus Years Old, an original stone cottage. We got a grant last year to have our water upgraded and a water treatment tank put on to it as the water was a very dark rusty color. I don't think we are entitled to anything else. I know a local Councillor called to us once and told us if there was anyone in the house above the age of 65 we would be entitled to a grant for our roof but we are both in our early 30's. Our roof first started leaking earlier this year after really bad storms and I contacted the insurance company as I thought it was related but they informed us it was general wear and tear so it was not covered.

Sugarcake

Ray Palmer wrote: »

Reclamation yards are actually expensive. You really would be surprised at the amount of building materials given away for free. It will take longer to get stuff but the price will be right. Skip diving is also an option but don't forget to ask for permission. The skip companies may let you visit their depot too if you ask.

40sqm is a huge extension probably the same size as your current house if not bigger. You can always do the extension over time. One extra room could be done for under 2k with enough elbow grease.

Channel 4 have a show on about reclaimed interior design stuff and worth watching for ideas. Strangely the one last night showed a coffee table I made myself out of a washing machine about 20 years ago as a new funky design.

Thanks Ray. As I say I am not 100% on the size we are looking at, I do know with the current layout of our house we HAVE to change the shape of the kitchen which is currently just a galley but as I say we have to so that we can fit one extra bedroom in. One of the most expensive parts is the mini digger and skip hire to remove the topsoil from the foundation. At the moment we don't even have 2k unfortunately. I didn't see that show, what is the name? Did you know your coffee table was being featured? Sounds interesting!

theUbiq

snubbleste wrote: »

Have you considered taking Ben Dunne's advice and going bankrupt in the UK? Obviously it is not easy
A €170k+ loss is nasty and it looks like it is seriously affecting your relationship.

Really? If you borrow the money you should pay it back... this person is not bankrupt.

Sugarcake

theUbiq wrote: »

Really? If you borrow the money you should pay it back... this person is not bankrupt.

I am definitely not bankrupt and I always pay what I owe, even when it has been difficult. So don't worry I will not be doing anything like this, even though I don't actually understand it.

theUbiq

Sugarcake wrote: »

I am definitely not bankrupt and I always pay what I owe, even when it has been difficult. So don't worry I will not be doing anything like this, even though I don't actually understand it.

That was aimed at that poster - not you.

The Spider

Chuck the keys at the bank go to England or up North for a year and declare yourself bankrupt, after a year your debt is gone and its the banks problem.

http://www.rte.ie/news/business/2011/1220/310098-presswatch/

You've no ties, your husbands job's not great, bound to pick up something better in the UK. It's very easy to get back home at weekends to visit family.

I don't think you've got many options bar this one, worth looking into anyway.

Ray Palmer

Sugarcake wrote: »

Thanks Ray. As I say I am not 100% on the size we are looking at, I do know with the current layout of our house we HAVE to change the shape of the kitchen which is currently just a galley but as I say we have to so that we can fit one extra bedroom in. One of the most expensive parts is the mini digger and skip hire to remove the topsoil from the foundation. At the moment we don't even have 2k unfortunately. I didn't see that show, what is the name? Did you know your coffee table was being featured? Sounds interesting!

http://www.channel4.com/programmes/kirsties-fill-your-house-for-free

It wasn't my table, they just happen to make a table nearly identical to one I made myself when a washing machine broke. I had a different top on mine but did have a light in it.

If you live in a rural area you might be able to get somebody to do the digging really cheap or even hire it really cheap, a tractor is basically a JCB. The top soil can be used to make a garden feature. If you don't like it later you can get it removed. There are some shortcuts there you can move on. If you can't afford the machines you can always dig by hand.

Don't underestimate skill trading. You might be able to teach computers to somebody in exchange for labour.

Sugarcake

Thanks Ray, we will definitely look really closely at all our options...anything is possible when you put your mind to it!