AI Legalese Decoder Offers Hope for Homeowners Facing Financial Struggles: How It Can Help Navigate a 130k Mortgage While Dealing with Unfinished Home Renovations and Job Insecurity
- May 21, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Financial Crisis: A Case Study
My wife and I purchased a builders finished house a few years ago for 180k. Unfortunately, soon after, my wife fell ill and had to leave her job, leaving me as the sole breadwinner. The house is now valued at 350k, but it is still unfinished, with the bathroom and upstairs ensuite needing installation, as well as groundwork outside.
Recently, we made the decision to change our mortgage with the assistance of a financial advisor. Our monthly payments jumped from just under £600 to £800. This increase, coupled with our usual family expenses and bills associated with four young children, is putting a strain on our finances. To make matters worse, I have been informed that I may be losing my job soon, despite earning a professional and above-average wage for the past 17+ years without a university degree.
The thought of selling our house has crossed our minds, but its unfinished state may significantly impact its sale value. With my wife unable to work and our children’s school fees to consider, along with no extravagance in our lifestyle (having gone five years without a holiday), the financial pressure is mounting.
Considering my current mortgage of 130k, annual earnings of 46k, no benefits, yearly rates of £3000, and savings of £12000, the question arises: am I now in a dire situation?
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Surely you’d get some redundancy pay. You have 12k along with that which should give you at least 6 months run away to find another job.
What do you work is there there anything else in the field you can look for, to be fair I feel like 40k isn’t that high of a wage anymore and you could probably find another job paying that relatively easily.
Your wife should be claiming some sort of benefits if she isn’t working to help with the costs though .
I don’t think selling your house is the answer what are you going to do rent ?
Buy another smaller property with 4 kids ?
800pm on a mortgage isn’t that high either. You just need to focus and get another job and sort out your wife’s benefits
>*4 young kids with school fees.*
^^ This appears to be the obvious first place to start. The £12,000 will possibly stretch 3-4 months with 4 kids.
Do you know what your redundancy pay will be? Will it be enhanced ? The first £30k will be tax free, so that should provide an extra cushion.
Can you get a bridging job in the meantime just to cover the essentials?
Do you have a breakdown of essential bills ?
In the meantime you need to apply for Universal credit in the meantime ASAP.
Firstly, sorry this is happening to you, it’s scary times at the moment.
I’m sure there will be some good advice but I’d just say start searching for a new job immediately, freshen up the CV, start speaking with recruiters and try get some interviews lined up. If you know you’re going into work (even if it has a slight pay cut) you’ll feel far more comfortable!
I think your problem is more of a fear/ confidence issue that it is a financial one. You’ve got decent experience, you can easily transfer in to a different job, in fact, I know people who have blagged their way in to high paying roles with no experience.
Selling your house is a false economy, it’s ideally part of your retirement plan plus is you end up renting you become subject to the uncertainty of high rent, rent increase and potential for landlords to evict you.
Also in this current climate 50k is no longer a high salary, it’s average given the cost of living.
I understand right now is a fearful moment in your life, given the situation but you could actually see it as an opportunity to find better paying and more rewarding work.
Life rewards people who are confident, optimistic and willing to take risks, I think the 17 years you spent at your job may have impeded some of these instincts. Try to be optimistic about the situation, you’ll be fine.
Hey – I’d like to ask you a few questions:
1. Why are you asking if you are screwed?
First of all – well done. You have a solid emergency fund (better than most) which will give you 6-9 months runway if you tighten the belt and live frugally for the moment.
2. What industry and what role did you work in before this expected redundancy? I’m sure you have transferable skills if you landed and held a £46k/yr job all this time.
3. If you can’t get the job you want immediately consider something else as an interim.
A side hustle to help in the interim – deliveries, 10/20hrs a week of a minimum wage job just to hold you in the interim.
4. Benefits are in place for THIS EXACT REASON.
You pay your taxes I pay my taxes, so when we are in a situation like this draw on them guilt free knowing you contributed your bit. There are many others who can’t or don’t ever contribute – that’s part of the world we live in.
5. Where in the UK are you based?
Location impacts opportunities, living costs etc. would you be willing to travel/temp relocate for work if need be?
The no degree won’t affect you, 99% of employers value experience over qualifications unless it’s something like healthcare etc. try and tailor you CV for each job. It’s annoying but worth it if you get interest. Also get a LinkedIn and see if any of the competitors are hiring…
Surely after 17 years with the company you are due some sort of compulsory redundancy payout that may fill the gap until you can secure a new job. Try not to waste time on worrying, it won’t fix it – start the new job search now and don’t feel bad about taking a temporary pay cut to go and work for a reputable company with opportunities to get back to your normal salary position within a few years.
My partner did this recently and it was very scary at the time, but they’re through it and actually a lot happier for it. It builds resilience which is hard to see just now but very valuable.
Good luck!
You have savings, equity in your house, 17 years of employment experience. Probably time for you to move on anyway! View it as an opportunity. In my experience the best things in life happen because of the difficulties and “circumstances”. Get your cv sorted and start looking at jobs. At first you may feel like your experience doesn’t match any of them but job descriptions are usually a list of everything they want and hardly anyone ticks all of the boxes. Think about transferable skills from one job or industry to another as well. You aren’t screwed by any means. Make sure you look after yourself, get plenty of sleep and exercise to avoid falling into a worry spiral. If you want some extra buffer money then think about other things you can sell. I sold a load of stuff recently and found it very satisfying to declutter as well as freeing up some extra money.
Good luck with the job hunting.
Hi, I work in an organisation where we calculate people’s benefit entitlements and help people in similar situations everyday. I would recommend contacting your local citizens advice or to call moneyhelper for advice regarding applications but to also see what you would be entitled to. The savings threshold for benefits such as UC is 16k. With 12k in savings, amounts will be deducted accordingly until it hits the lower end of the limit of 6k.
Difficult going on the job market after so long but I am sure you will be fine.
Your wife should be claiming New Style ESA and looking at PIP (presuming you live in England) as these are not means tested.
Hi, by school fees do you mean private school fees?
If so, how on earth are you managing that on £46k?
18 years experience and slightly above median salary. Could be a blessing. Get that CV embellished.
With 17 years experience you will find another job. Get applying. Make that your full time job. Given you have been there for 17 years and are only earning 40-50k, I would bet you have been severely underpaid for at least the last several years.i bet there are easily attainable jobs for you above this figure.
Not financial advice, but have you considered finishing the work yourself? I managed to find a good condition bathroom suite on gumtree for free and I installed it myself just following some YouTube videos etc. then spent about £100 on some nice tiles and re-did the tiling. Transformed my bathroom from a dated orange 70s bathroom to a clean modern looking one for £100. Obviously just takes a few weekends of time, but these things don’t have to be expensive.
Hi /u/NoZombie7399, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/financial-advice/
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I’m pretty sure if you call your bank they can give you a break for a few months
You will be reet mate if you don’t get another job right away get some of those savings withdrawn and get universal credit.
Sorry to hear this
Are you on LinkedIn, if not update your settings as you can let recruiters know you are open to work
Or just change your banner however everyone can see this, look for jobs on LinkedIn that you like, you can apply directly or send a msg to the hiring manager or director of the company,ensure your hashtags match the job search request and add any that dont
post you CV on Job boards
CV library is good and treat it as a game, good luck op
Civil service may suit if your military, no degree required as well. but recruitment is slow have a look here https://www.publicsectorresourcing.co.uk/
Firstly – well done on having that level of savings. You’re a shining example of how an emergency fund can be vital.
Do you mind me asking what industry you’re in? Your experience should, in my opinion, count for a lot and it’s certainly impressive on a CV to see someone with that level of service. Prospective employers will see you as someone with long term potential.
My next step, even pre-redundancy / losing job, is to contact a leading a recruiter in your industry (explain the situation) and see how you get on.
I’d take refinancing the house / selling as a last resort as I think you’ll be pleasantly surprised by the opportunities out there.
Good luck mate.
If you are being made redundant after 17 years, you should get a pretty healthy redundancy pay-out.
The main thing is to start searching for another job and thinking about how you can use your skills. You might even surprise yourself by finding a more interesting better paid job than you have at the moment.
£130k is not a big mortgage. Based on bank’s standard affordability calculators, a £130k mortgage is viewed as affordable on a £29k salary. A bit tougher with children of course but could be managed.
First things first, do not panic You have a good amount of savings to ride any storm out Secondly, my company specifically hires talent based on potential rather than academic results, we do this for major firms do no degree is no issue
Competent employees are hard to come by these days. With your work experience (and dedication – 17 years in that position), you will snap up another job very quickly. Don’t panic, you have savings to get you through a few months, so start sending out those CVs. Don’t worry about school grades, they are irrelivant these days (unless you’re a doctor).
I bookmarked two super-helpful as I could see the way the wind was blowing for my husband:
https://www.reddit.com/r/CasualUK/comments/195kggb/should_i_be_on_the_dole/?utm_medium=android_aRedpp&utm_source=share
https://www.reddit.com/r/UKPersonalFinance/comments/12jc083/25_being_made_redundant_next_month/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=3&utm_content=share_button
And yes, my husband was made redundant. He has lined up a much better job with a ~15% pay increase, mostly wfh. He starts soon, taking a two week break between jobs. It was a worrying time but looking super-positive now.
Every time I’ve read about these situations or know friends who were made redundant, they say they come out in a better position with more pay. OP I wish you all the very best.
>don’t know how I will get a similar job as have been working for same organisation for 17+ years, and no university degree
Don’t undersell yourself. 17 years of practical experience is worth more than a degree! Get on LinkedIn. Talk to some recruiters who specialise in your field. Looking for a new job is daunting but you don’t know what’s out there until you have to look.
Good luck and try not to panic.
Talk to you mortgage company, explain the situation.
You might be able to take a payment break or pay interest only for a while.
The worst thing to do is nothing.
Rental prices are crazy, so avoid selling up.
She should get PIP if unwell and can’t work? You should be getting child benefit too. Get these claimed asap if not already.
I’d pay for the jobs to be done, sell and move somewhere cheaper.
I’m no expert on benefits, but if your savings get low enough and you don’t find a new job, I think you may qualify for housing benefit to cover the mortgage interest (as well as other benefits). Unsure how easy it will be for you to move to an interest only mortgage, but it must be feasible.
Most homes are wildly over valued. Is 350k realistic?
Not sure what you do, but my o/h is in IT, he doesn’t have a uni degree, but he does have yrs of experience, that counts for a lot, so even if you see a job that states a degree is needed, don’t let it put you off, talk up your experience in your field. Also think about contracting as they tend to pay a lot higher than a regular job, but keep looking while your contracting, use it as a safety net. Good luck.
Some advice from the job searching side.
– 17 years with one company, you’ll receive a decent redundancy package hopefully? This will keep your head above water along side the savings. Don’t take the first offer, push for better terms.
– don’t worry about not having a degree, if you’ve progressed in your role and done it for that long, you know what you’re doing. Very few people are going to ask for a degree.
– get networking, get a professional LinkedIn profile set up. Start connecting with competitor companies, and the relevant hiring managers. Depending on what kind of work you do, indeed, reed, CV library are terrible. LinkedIn is your best bet but you have to be proactive. Don’t just sit and hit easy apply. It’s all about networking it will set you apart from the other 100 irrelevant people hitting easy apply.
– there’s a website called agency central. You can input your industries, skills set and it will give you a list of agencies that in theory specialise in your line of work.
– sign on, there’s absolutely no shame. That’s what the system is there for, you’ve paid into it for 17 years, use the “insurance” it is designed to provide.
Been through this in the past a couple of times, be strong, don’t over think but start networking now, get a job any job within reason.
There’s options to go interest only, if you get under 34k then give help available as you are sole earner and have kids. Your redundo is probably worth about 15k plus depending on leaving terms, this may affect benefits as you have savings but you may be able to reduce your outgoings with some of your savings and fall into the help zone.
finally….Get better more concise advice than I can give.
Good luck