Mortgage Only but still struggling - Advice

Vanilla said:
Well the food, gas and electric will easily come to 1000 a month, add on car tax and insurance possilby for two cars, house insurance, VHI, household repairs and maintenance, car servicing, petrol, car repairs, clothes and shoes and possibly an annual holiday and I can see how easily it all adds up.
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It doesn't add up based on the figures posted so far as far as I can see. The more detail the better in this case. Saves people guessing and making suggestions that may be irrelevant.
 
susan12 said:
As for the valuation I've been conservative - its less than we paid a few years ago and we've done a serious amount of work so I think this is a fair price in the current market.
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So 1.9 million is less than you paid a few years ago. But your mortgage is only 700k.

So you have managed to accumulate 1.2 million in your mid thirties even though your asset has gone backwards in price, despite further investment. An admirable achievement, you must have both invested your communion money wisely.

Sell it, clear your debts, buy something for a million and then live mortgage free on 130k plus a year. That would be heaven on earth for most people.
 
susan12 said:
We aren't long enough in the house to make sense to sell it on - market at the moment let alone the stamp duty paid etc. I think we're committed for the time being staying put - I accept we may have to move but that really will have to be last resort stuff.
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In accounting/decision-making terms, the stamp-duty is a sunk cost. Nothing that you do now can change this cost, so it should have no impact on your decision making. If you letting this sway your decision, you are making an emotional decision based on a financial issue - not a great idea.

Can I ask what kind of financial planning you did before the house purchase? How did you expect to be able to manage a €700k mortgage along with your childcare costs?
 
This is ridiculous - they OP has 1.2m in equity.

What's the point in 'hanging in there' when you can live a full and fun life - it just involves making a rational decision and down sizing.
 
Considering going interest only until eldest gets to school going age - is this madness??
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This is not madness at all. It is something you should be doing. Your mortgage is too high for your current level of income and expenditure. You can't afford to make capital repayments and interest payments. You are at a particularly expensive time with young creche going children.

You should only downsize as a very last resort. You are keeping your head above water and paying off some of the capital. No need to take emergency measures. You presumably are getting good value from the home at the moment. The worst thing you could do would be to trade down and then trade up again after a few years when your finances improve. You would be paying two lots of stamp duty to be in the same position that you are in now.

You have done well to have accumulated such equity at a young age. Don't throw it away now because of some temporary financial indigestion.

Brendan
 
My kids aren't in school yet, but while you will save on creche fees, you will be dealing with childcare, children who are too old for a creche but much too young to be left on their own, and covering holidays/sick children/in service days. From all that I've heard childcare gets cheaper but more problematical as they get older. There is also the issue that a toddler is easier to keep tabs on than a teenager. Is there some particular reason you don't want to move from this house? It seems to be crippling you.
 
Going back to your original problem. I think you need to look long term. I am in the same situation as you with two children in creche. Together with a large mortgage i am not at all suprised you are finding it difficult. It really won't be like this for ever. Before you know it your oldest will start school (yes, really) and you will have 1000 free a month for day to day expenses or savings for the children. You are in the fortunate position to have to equity in your house but I would say, hang in there if you can, cut back as much as possible, and long term it will all pay off.
 
Thanks to all posters - guess it is a question of priorities. We could downsize and live a good life with the equity from the house however we have worked very hard to get to where we are, taking some big risks (along with a tremendous amount of luck!) so I think we'll hang in there for now.

To answer the questions - we both were fortunate before we met to have invested in property and so when we got together we used both holdings to buy more which paid off for us in a real way. We sold all to buy where we are so we've no investment properties etc left but think we timed it pretty well considering the market at the moment. Might go back to property but need a break as despite doing very well out of it, it took a lot of work and stress and I couldn't do it with two small children at the moment.
 
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