Having a wobble

alfiemama

Ok whenever I come on here, I always get very good advice, and everyone really helps me to get a grip of things so here goes.

I suppose the crux of it is, I am worried about the housing market, basically.
We have an interest only mortgage for £186k, and we re mortgaged with tsb in April the house was valued at 215k, so we are assuming that in order to have the LTV to buy another house, we just wouldn't be able to sell for enough (hope that makes sense)
Therefore, we are thinking about selling up and renting, we have a fixed rate for 2 years but think that when the rate goes up, we just wont be able to afford it.

We also don't really want to live here any more, we have been here 6 years now and never really settled, (we both feel like this).

We now feel trapped, dh wont put the house on market as says no point at the mo, but I have said surely we have 2 years to sell this house before the situation becomes really bad.

My question is, do you think that things will have to change, I mean surely banks and mortgage companies will be going under left right and centre, not to mention estate agents. Are we right to try and sort now?

Any advice welcome

hostman

IMO you have missed the STR boat by several months, a year even (Sell To Rent).

Have you sat down and calculated how much your repayments are going to be when you come to re-mortgage? Would renting be cheaper for you?

The housing market is not going to recover this year and its very likely it won't do next year either. If you look at the last "crash", my own area took nine years to return to peak prices. This "crash" is possibly worst than the last in terms of size of falls, but it may play out quicker, who knows ...

The economy as a whole is a hairs breadth away from recession, this will mean an increase in unemployment, which means more repossessions, which means cheaper prices - Couple this with less lending, high and increasing inflation and a Government who have taxed everyone to death over the years = One Fine Mess.

If you want to sell your house you'll need to discount it, otherwise it won't sell. So the small amount of equity you think you have could be eroded very quickly and then what's the point of moving once it's gone?

You're certainly right to look at the options available to you now - My advice and others you may receive may be unwanted, but that's the stark reality of your situation.

- Are you comfortably affording your mortgage payments now?
- Can you afford your mortgage payments if you moved on to your lenders SVR, even if it means cutting down on luxeries for a year or two?

If you can't afford your lenders SVR and remortgage is not possible / more expensive due to high LTV, then you may want to sell now, break even and rent, if the rent is cheaper than the mortgage. No point hanging on if it means bankcrupcty and being repossessed IMO.