Case study All advice welcome please

[rose bush]

Personal and income details
Income self Net income- £33,000 per annum, public servant
Income history: I am a teacher and my hours were reduced the year after I got my mortgage and have not increased again since then.

Income spouse
nature of income: Self employed- £6,500 per annum
Income history: He was made redundant 2 months after we got our mortgage, was unemployed for about 2 and a half years, then set up his own business about a year ago, he is hoping to expand and earn more this year. He now minds our children during the week and works at the weekend.

Number of children 2- 2 years and 4 months
Amount of Mortgage Interest Supplement received- none

Home loanLender: AIB
Amount outstanding: £317,000
Value of home: £160,000
Interest rate: Tracker - 1.85%
Monthly repayment - £1,444
Amount in arrears - £2,500

Summary of discussions and agreements with the bank
We bought the house in 2008 and have been paying interest only for the majority of that time. We have cleared all our personal debt in this last year. Our interest only finished in December the bank sent us the forms to apply for it again, we didn't apply for it again as we wanted to try and pay it, but can't.

Other loans and creditors None
Other savings and investments None


how important is retaining the family home to you?

I don't care about keeping the family home.

Any other relevant informationMy partner's father is also on our mortgage as my job was not permanent at the time. He owns his own home and is retired and receiving a pension. He does not contribute to the mortgage, he was only signing on it to help us out. We currently have a complaint with the Financial Ombudsman as we thought he was just guarantor on the mortgage but is in fact on the mortgage.

What is your preferred realistic outcome?
I will never be in a position to repay the home loan. So I want to sell the house and deal with the shortfall"

 

[leroy67]

Hi rose bush

Am I reading this correctly 39k net income or circa 3250 per month? mortgage 1444 per month and husband minding kids during the week, no other debts, circa 1800 per month left over after mortgage for household bills, etc. If I am I can't see why you cannot afford mortgage

 

[rose bush]

Thanks and yes leroy67 that does sound pretty easy now I have written it all out. The reason last two years were a struggle is because we were paying of personal debt also. My husband didn't actually earn 6,500 last year, only about 2,000 but is on track to earn 6, 500 this year.

I suppose I am just concerned because we are stuck in a tiny 2 bed house that we hate, and spending 50% of our income on it with no chance of ever being able to move because it is so much in negative equity.

 

[leroy67]

Congrats on the progress you have both made, you are in much better shape than most,give yourselves another 12 to 24 months clear your arrears and then maybe look at a negative equity mortgage through your lender.don't stress at least you do have a secure roof above your heads