I’m tipping you didn’t buy it in a good area in Dublin in May 2007 then.
I don’t think this chap needs to be reminded of his mistake, let’s stick to giving proper advice.
The fact that you have a mortgage of €1 million and no savings strikes me as insane What if you lose your job, or someone in your family gets sick? It’s entirely possible that you could lose the house within three months of that happening.
The first thing you need to do is to slash your expenditure until you have at least three months salary saved. That will give you a buffer should the worse happen regarding your job. If you go over to the Money Makeover section in askaboutmoney.com, there are some great tips on saving money.
Your missing the Irony Icon…
Pot, this is kettle. Come in kettle.
I think you should try and devide up the house. Let rooms - at least one with a bathroom. it is easy to put up a Studd Partition wall. Immediately let as much as possible and programme your entrances so that the entrance doors are seperate. Put it up for sale immediately - even though you will possibly not. Someone may be really interested in that house and you will be mooving ahead of the Banks if they ever come. Prepare to Downsize fast. Talk to your parents and see if they would be willing to help in some way, i.e. minding the children for a few months. Get the Granny moving - even the Obamas are mooving and putting a Value on their Granney. Sell some furniture and valuables at local auctions. Reduce your spending substantially. Do a deal with the Banks. Ask them to reduce your monthly Mortgage payments and increase the length (years) of the Mortgage. Now that you can still Think Straight - do all these things and more. Get the children out of fee paying schools etc. Sell a Car. Buy a Bicycle and Good Luck as everyone needs Luck! Stop Drinking!
Save some money in cash ASAP. Put it under the mattress, not in a bank/post office. If things go really wrong you will at least have access to this money. If you have credit cards run them up to the limits with you day to day spending so you can save the money quicker.
erm, the guy is not in trouble (Yet)?
I’m just shocked that you paid 80k doing up a house that you just paid 1 million for.
If I paid 1 million for a gaff, I’d expect to just turn the key, saunter in, throw my jacket over the leather chaisse- longue(comes with house), as I pace the lush carpets in my jim-jams (comes with house), smoking a pipe (comes with house).
I have absolutely no advice for you, other than to try and keep your job or embark on an illicit relationship with a member of the Cabinet.
As you are in a well paid job, it’s criminal and totally irresponsable that you do not have any savings. You are obviously an intelligent person, but fail drastically in your handling of personal finance, and budget.
I think I know someone in a similar-ish position regarding the size of mortgage but aren’t in such a doomsday position with regards employment. If you lose your job does the State help you out and to what extent ?
In terms of the system breakdown we’ve had I’d humbly suggest that folks in your positions use a website like this or another or set one up, purely with the aim of dealing with potential cases like this as well as ye offering valuable feedback as to how we all think the system went funny in the first place and how this shouldn’t be allowed to happen again.
Someone somewhere needs to be prosecuted, though the consumer is partially to blame for stepping on the panic culture boom bus that swept the place in the last ten years. It’s a combination of consumer frenzy but authoritative irresponsibility but someone somewhere needs to be put away. (and it’s probably savings … )
Can you take out some sort of income protection insurance policy to cover your mortgage in the event you are made redundant?
get off your high horse will you!!!
It is not criminal to pay stretch yourself financially
We’ve all done it at some stage
An honest post gets responded to with a hectoring sanctimonious lecture.
From reading the original post. I suspect that the poster knows he’s going to be in trouble sooner rather than later.
Could posters confine themselves to constructive advice/suggestions please ?
The country is in debt up to it’s tits due to irresponsable spending, people trying to look flash and savers derided as “scrooges” or " having no balls". I’ve no apology for the above post. It’s high-time the next generation learn from our mistakes and these mistakes must be pointed out. The guy pays 3.5k every month for a mortgage and has zero savings, whereas he could’ve got a decent home for half the price save possibly 2k a month, and not have to post here looking for advice.
the very first thing i would do, and i would do it fast, is sell your house and move the family into rented accomodation. its gonna be less than what you paid for it but they still have a long way down to go and if you get out now you mightn’t be too badly stung. find out what the market clearing price is for a similarly sized/speced house in the area and put it up for sale at that price. no higher.
there’s lots more but that is step 1 and i wouldn’t hang around if i were you. i know thats not a nice thing to hear when you’ve just bought the house but its the sensible thing to do and you’ll be glad you did so in 2 years time.
How does maxing the credit card help? For mr average joe soap, a 5k CC might last 6-10months paying the mort to keep the wolves at bay. For this guy, it wouldnt last two weeks
My advise, would be to carry on regardless, because lets face it, being able to service a 1M mortgage requires a special pay packet. i doubt if the poster would be able to get “another” job paying anyway near that salary again.
If he does lose his job, and is unable to get a “new” one, he is instantly buggered.
Most people with a Reasonable mortgage, could hit the panic button, consolidate loans, GO IO on the mortgage, send the Old doll out to work, and get SOMETHING resembling a pay packet, and just maybe, scrape through till better times.
With a Mort of 1M. its Giddy game over.
No, he should carry on regardless, and live life to the full.
Should he lose his job, instanlty declare bankrupsy and go on the scratch.
Yup. Get out while you still can and take the hit. You’ll be left with an outstanding debt of a couple of hundred K but that’s better than an outstanding debt of 500K after the bank repossesses…at this stage you are in damage limitation mode. It’s important to accept the fact that you bought at the very peak of one of the greatest housing bubbles in history, and your sole objective should be to get out of this with your family intact.
The fact you have no savings is worrying. You need to sit down with herself some evening once the kids are in bed, explain matters, and start going through the family finances. Can savings be made anywhere e.g. downsize the car(s), start shopping in Aldi/Lidl, is there a lot of frivolous spending going on e.g. paying €10 a day for a ropey sangwidge and a coffee at lunchtime? There’s a “scrimp and save” thread here somewhere that is sometimes very tongue-in-cheek but also has some very good money-saving tips. You need to do that this week.
As part of that “family budget” you need to total up your non-mortgage debts. Cut up the credit cards. Some kinds of debt are more expensive than others, and usually the order is something like Credit Cards->overdrafts->personal loans->car loans->mortgage.
Look at making savings wherever you can in monthly outgoings, and putting those savings into clearing off your most expensive debts first. Your focus needs to be on debt reduction initially, as a long term goal you want to be aiming towards having 3 months wages saved but in the short term you want to pay down your unsecured debts (credit cards and overdrafts). You’ll sleep a lot easier when they are gone, trust me I spent 2008 clearing €9K in unsecured debt and it feels brilliant making that last payment.
If you can sell quickly and rent, you will probably save at least €1K a month on your current mortgage payments too. There is a massive rental supply out there right now and rents are falling, so with only a little bit of luck you should be able to find an equivalent house very close to your current home, minimising disruption for the kids.
I know the thought of maybe 300K in unsecured debt (the negative equity remaining after you sell) is very scary but if you lose your job it’ll be much easier to declare bankruptcy…and if you keep your job, have trimmed the household budget and have saved at least 1K by renting, then you could be paying that negative equity off at about 1.5K a month…or about 4 years. Starting 2013 completely debt-free doesn’t sound so bad, does it?
You are missing the point, the OP will not be able to sell for less than the mortgage without the banks consent, Bank would be unlikely to give consent without some sort of guarantee that at least some of the o/s mortgage be repaid , possibly from family memebers etc