I’m a single mother of three children with part time work (30hrs a week).
I have sole ownership of my house, the mortgage is approx 25% of the house value. No other debts. As part of the ongoing financial abuse my ex husband has put me through he pleaded broke and paid the entire separation settlement as a super transfer. With the separation payment to my super, the balance was doubled.
I work on contract, not a permanent position. I also have 100% care of my children, which makes additional work difficult.
I have ongoing bills which are becoming harder to meet.
Banks can’t approve topping up my mortgage or giving me a personal loan. I don’t have any other debts to consolidate. I don’t meet the superannuation criteria for financial hardship, and am about 20 years off being able to access it with my age.
I’ve successfully applied to child support to have an assessment investigation so there is now a debt that is being paid back at $20 per month - which really doesn’t help right now.
Is there any other option available to me to utilise my assets (house / super) to cover my expenses? I would also like to do some work to the house as I intend to sell & downsize within five years.
TLDR: asset rich (own home, low debt, healthy super), cash poor. Single mother without permanent job. How can I utilise assets to access or borrow money?
10 Replies
Have you thought about renting your home out and staying with someone for a year or 2. Get some money behind you that way. If not, the only thing I can suggest is to to a broker & see what they recommend you do.you are doing an amazing job. At the end of the day, you’ll have your home and kids; he will have nothing. I know it doesn’t help but you are doing so well for yourself under the circumstances. Hang in there, I’m sure brokers will be able to help you, just don’t over commit. Just get what you need.
Unfortunately, unless you leave Australia permanently, become terminally ill or permanently incapacitated (unable to work again), if you don't qualify for hardship, you can't access it.
Just thinking out loud here, crazy thoughts but, I wonder if you could transfer part ownership to your parents and if they are over 60, they could apply for a reverse mortgage for you?
All on paper obviously, you retain full ownership, assuming your parents are trustworthy.
The big issue with reverse mortgages is they lend you maybe 20% of the equity value, and the interest payable on that loan eats the rest of your equity very quickly.
They don't care if you've done it 'on paper'. Once you sell you'll find that the bank will take their cut to repay the interest. OP could end up with half, or more, of her equity gone.
Thanks for clarifying, I'm not a broker and have no idea.
No problem. My husband is in finance (including broking among other things).
They seem like a good idea until you see the figures on how they work.
Asset Rich Cash Poor. So to up the cash you need to earn more or spend less. Sorry to make it so blunt. Building assets is much harder than increasing cash flow. You've got a great foundation. You can do this. So big girl pants on and assess your outgoings. You may have already done this but, write down everything, coffees, gym memberships, media subscriptions, tuckshop. Everything. Barefoot investor has a great process you can follow if you need some help with this. Once you've pulled the outgoings back as far as possible, tackle earning more - can you work extra hours from home? Get a 2nd job? Babysit other people's kids while you are busy looking after your own? Take in ironing? I have friends making extra cash selling honey from their bee hives, propagating and selling plants, weeding other people's gardens, selling their baking. All things they do for pleasure that they do a little more of for someone else... Make sense? Good luck mumma, you can do this!
Since you're so close to paying off your mortgage why not just wait it out and keep going? If you have no real need for money right now you would be crazy to get in more debt. You will be going from asset rich/cash poor to asset poor/ cash poor.
See a broker about refinancing. Although big 4 lenders might not be interested, there's plenty of smaller lenders who have different criteria. It's an avenue worth exploring.
I suggest it because you can refinance your mortgage over a standard 25-30 years. Repayments based on your current balance on a 25 year loan term will have a much lower minimum repayment than an existing loan that has 15 years left.
Of course you should still pay as much as possible as it still lengthens your loan, but it's a better option than borrowing or getting behind.
If you're struggling now, how do you think thats going to change with added repayments when your cash runs out? You should be looking at increasing your income to cover the expenses you have now.