Anyone else in Mortgage Stress ? 50% Pay ?

[Alex P Keaton]

Hi

Anyone else in mortgage stress?

50% of my salary is going into ppor & ip mortgage repayments. I make $1547 net a fortnight.

I'm struggling atm and my bank balance has been going down! I'm down to $1600 now. I'll get paid tomorrow though. I'll be ok and have some breathing space once I get my $3,500 tax return back in August, but in the meantime just to stay afloat I've had to open a new credit card with my anz account for a limit of $3000 set to min payments. Also instead of paying off my nab credit card in full each month i'm going to start paying just half the amount.

I'm using the credit card as a short term back up and once I get my tax return I'll be paying off the credit cards. I'll be using the credit card to pay for expenses such as food, petrol, accountant fee, yearly water bill, rate bill. Because I have to make sure I have enough money to make my mortgage repayments. Other living expenses for the next 2-3 months will have to be on credit.

In January I'll be increasing the rent from $230 pw to $245 pw. For it to become neutral it needs to get to $270 per week. So as I increase the rent that will make it easier to handle for me!

I'm thinking I may have to get a 2nd job but I really dont want to have to do it due to health reasons of which i'm not going into on this forum. 1 full time job is enough for me as it is.

I really need to be extra frugal now. Pretend to live like a pensioner and be so careful. The next 2 years I think will be tough but If I'm careful I can get through it.

Any tips encouragement or advice would be great!

Anyone else struggling too? People usually go quite when they struggle dont they and dont want to say anything.

 

[Graingrower]

Keep in mind that things will get easier down the track. Wages will rise, rents will rise. Start budgeting for an interest rate rise and see if you can put that money away. If the interest rate rise doesn't eventuate - bonus!

Make up a poster or cork noticeboard and cover it with pictures of where you are gonna be in two years, 5 years, 10 years, etc. Make sure you have something to look forward to. If not a holiday it might be a weekend camping or even just a family gathering. Don't focus on what you can't do but focus on what you can. Find a cheap way to spoil yourself every now and then.

 

[Alex P Keaton]

Keep in mind that things will get easier down the track. Wages will rise, rents will rise. Start budgeting for an interest rate rise and see if you can put that money away. If the interest rate rise doesn't eventuate - bonus!

Hopefully I'll be reclassed to a level 3 at work. I'm a level 2 atm and yes rental increases will take some pressure off. In the meantime I'm just gonna have to strictly budget. Spend mostly on my needs. Not as much on wants.

 

[Rixter]

Alex, how are your finances/loans structured? Where does all your income and rents sit before you pay off the nab card each month? Where do your loans get paid from?

Maybe able to get your cash flows running more efficient.

 

[luce.rocks]

Does your PPOR have a spare room that you could rent?

 

[Pa1nter]

Can you rent out a room at your PPOR,
$100 a week extra can be a godsend especially when it is placed directly into your mortgage?

 

[Pa1nter]

Does your PPOR have a spare room that you could rent?

I just read your post,sorry but we must think alike

 

[luce.rocks]

I just read your post,sorry but we must think alike

Great minds

 

[devo76]

If I read correctly you are about $40 off being neutral on the IP so I assume the bulk of your outgoings are on your PPOR.
Is moving out and renting a cheaper property an option. This would make your loan payments,insurance,rates etc tax deductible while hopefully achieving a lower rent than you are currently paying on mortgage repayments.

 

[Ace in the Hole]

Seems like the PPOR is the problem, care to share the figures on it?

 

[bluestorm]

Hi

Anyone else in mortgage stress?

Any tips encouragement or advice would be great!

Anyone else struggling too? People usually go quite when they struggle dont they and dont want to say anything.

Nah mate. At these LOW interest rates, it's a walk in the park if you don't overextend in the first place. Tip. Factor in 10-12% interest rates when you next purchase (ie, a substantial buffer). This way when they are a very low 7% like now, you can sleep easy.

Hopefully I'll be reclassed to a level 3 at work. I'm a level 2 atm

Wow, level 3. Suppose it means something in your workplace. Perhaps also move jobs. I never do understand people who sit for 10yrs with the same company waiting for measily pay increases. Take control of your career. I'm 8yrs in a career, and $3300 net fortnight.

 

[Edmond Dantes]

One suggestion:
- You still have a cleaning lady? get rid of her, and do the cleaning yourself. This is an exercise in itself.
- You've done an amazing job with your weight loss. Are you into the "lite n easy" schemes where they provide you with the food? if yes, start cooking your own food (which I'm pretty sure you know by know what to eat and what not to eat).
- Look for another job? improve your skills, study something else?

cheers

 

[Intrinsic_Value]

I'm thinking I may have to get a 2nd job but I really dont want to have to do it due to health reasons of which i'm not going into on this forum. 1 full time job is enough for me as it is.

why not a second job thats 'easy' and non-stressful. You mentioned sometime ago about loosing weight, what about something like a letter box distribution job.
Great for exercise, and can provide some extra pocket money.

I used to do it back in uni days, contacted several distribution companies and over time took on multiple 'jobs' for a specific area, since you get paid for each job, walking the same grounds doing multiple 'jobs' works out at a decent rate of pay.

 

[Jamie M]

Have you considered spreading that $3k tax return over the year via a PAYG variation? It will help with cashflow - but August won't be as exciting.

Cheers

Jamie

 

[BuildingBlocks]

Set your mortgages to IO if not done already?

 

[virgo]

Mortgage stress

Hi Alex

Sorry to hear that...

2 suggestions

1) convert all loans to Interest only

2) Revalue (if possible) up to higher LVR and stick extra funds into an offset?


Also the idea of a boarder is very good; i have resolved to be a stay at home mum now and am thinking of building a granny flat; it will cost me about 80K and it should bring 300-350 per week....passive income; gotta love it!

 

[Peter_Tersteeg]

Stop using the credit card immediately and pay it off as soon as you can, then get rid of it. Credit cards are useful way to optimise using the banks money, but if you can't easily pay it off every month, it ultimately gets you into a bad place.

Also write down everything you spend your money on. It's a great way to budget.

 

[investor2009]

Pffft, mortgage stress..
80% of my pay goes toward investments.

 

[Sheryn]

Any tips encouragement or advice would be great!

1. Rent out second bedroom to someone who goes home on weekends (needs to board in town during week)

2. Get a second job that combines exercise. My son has one he does a lot of walking.

3. Review your budget.

4. Ask parents for a loan to pay off credit cards until tax refund.

5. Review your investment strategy.


Cheers
Sheryn

 

[investor2009]

To elaborate a little, (sorry, I'm busy at work) Around 85% of my wage goes toward investments, half of it straight toward a mortgage, and around a little over a 3rd or so towards investment properties. I have $100 left after this before tax.

I factor neg- gearing as part of my pay (extra $200p/w) and prefer it in a lump sum each year, and also have a LOE cash buffer that keeps me feeling quite well off.

My portfolio has been making around 3-4x my wage in growh each year and I'm a bit more 'eager' than most people when it come to my aggressive mindset because I am fully aware that size matters, big time and 'time' is the other factor. So size, and the shortest timespan possible= magnified gains/losses. I have gains on a much larger scale than any losses or stagnant growth, for what it's worth. .

Ifr I chose to play it safe, I would not have been making anywhere near as much profit as I have/am.

I don't see this as risky at all because I have a cash buffer, and I have plenty of time on my side to ride out any bumps along the way.