Leaving house and renting - timing?

ascot64

We have equity in our jointly owned house and so the BI will go to the OR.

Either I can pull together 6 months rent now before BR and we move straight into a rented place or we stick it out until the OR forces us to move which I understand will probably be about a year after BR (we have 2 children).

The problem with the latter though is it will be much harder to find the money for 6 months rent.

I wondered what other people do in this situation? Is is better to get out asap or stay till the last minute.

tigerfeet2006

The general consensus seems to be to get out before the BR hits your credit files. So I would move now rather than later.

peachyprice

Hi Ascot,
Firstly how much equity is there in your house?
Secondly can you afford to stay in the house?

If you stay in your house now once the year is up you will still be given a reasonable amount of time to find accomodation, so you can then stop paying the mortgage to save for the rental deposit. By this time you will be discharged and will have had time to clear up your credit file, and may not have to find 6 months rent anyway.

With house prices dropping, and depending in how much equity you have I would say it's worth the gamble of staying put if you can afford it. Also, when the time comes for the OR to want the house you would still be able to negotiate buying the BI off him but for probably a fair bit less than there is equity at the moment.

I think if you jump now and the housing prices crash you could regret it, as you would have lost the house unnecessarily.

ascot64

Thanks for the reply PeachyPrice.

The equity is about 33%. We can probably afford the repayments if I switch to interest only for a while. It will probably be cheaper than renting something similar.

So from what you say we dont even have to start looking until a year from BR. I thought we would have a year from date of BR. Do they sometimes act much faster to get you out. I would hate to find that for some reason we ended up with much less time.

If the house prices dropped dramatically we might be able to raise a family loan to pay the BI so it may well be worth staying put as you say.

peachyprice

Hi Ascot, that's right you don't have to start looking until they ask you to move, and they have up to 3 years to do so.

They have to give you time to find somewhere else, and would only force you out with a court order as a last resort if they felt you weren't making any attempt to find accomodation or come to an arrangement over the BI.