Outstanding loan and Child Care Considerations

D

Dualtha

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Myself and my wife are expecting our first child this month. We have done the usual Creche routine and have decided we would prefer if she could stay out of work for the first 12 months. The cost of the creche is 850 a month which we can easily afford but the heart of the issue is do we want her to stay at home and mind our child or sent the baby to the creche after 4 months just.
We cannot afford for her to stay out of work in the long term.
We both owe approximately 27k in debts plus our mortgage (5 months old) and the loan is costing 600 monthly so what I was wonder is would it be possible to absorb the 27k into our mortgage (100%) and then use this cash for additional household costs and thus enable my wife to stay at home for first year at least.
We are both expecting full SSIA's next April also and were thinking of using one of these as paying off lump sum from mortgage.
Does anyone know if this can be done without remortgaging or what is the story?

Thanks
 
You'd be far better using your SSIA to pay off your short-term debts (the 27k) rather than paying it off your mortgage.
 
MoneyHoney,

We did take 100% mortgage but the house has increased in value by almost 30k since we bought it only a few months ago (at least that's what a smaller house next door sold for) so suppose anything from 15k increase, we have also added decking and conservatory since so value will have risen by this. We were going to use our SSIA's to clear the loan but need a short term solution to avoid my wife going back to work so soon after baby is born.
 
I'll preface all this by saying this is only my opinion, so take with pinch of salt if you wish!

Although the value of your home has increased, I would be reluctant to remortgage so soon. Wait & see what property market does over next while.

Is there any possibility that you could:

1. Take payment break on your mortgage for a few months until your get your SSIAs & clear the loans
2. Take payment break on your loans meaning you'd only have to cope with mortgage while your wife is at home.

Talk to your lenders & see what, if anything, they can suggest.
 
Also, FWIW, give some thought to the amount of spend that your new arrival will incur. Some of this could be addressed by borrowing, but many people prefer to buy new for their baby.

Apart from the cot and the travel system and the rest of the paraphernalia, there's the increase in the weekly grocery shop, the cost of additional heating/electricity with mother and child at home. Some of that could be addressed by the positive cashflow effect of having no social life ;) .

Don't want to freak you out but if your financial situation is changing, you should collect as much relevant information as you can, especially from those who are in the throes of a new arrival, or those a few months into it.
 
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