Stuck between a rock and a hard place

sofrajean

Thankfully the bathrooms and kitchen are in a decent state of repair so no new fittings as such. The house is just really shabby, my aim is to neutralise and dress well.

You have some very interesting points. I am unsure about whether or not we can put on the market before July, something I will have to look into.

With the housing market being as it is currently I'm not expecting that doing work on the house will increase the value but speed up the sale.

Living in or renting out the house would depend entirely on what i decide with this situation. I will however need somewhere to live in this area next year if not beyond so it would save me looking and rushing in to buying somewhere else or wasting money on renting. I have wondered how easy it might be to fill one of the rooms with a tenant?!?! and have the mortgage paid for me.

I suppose the question really is am I better off if i get an affordable mortgage to buy this house at a reduced rate or should i be mortgage free on a lower priced property.?!? I cant seem to decide which of these options would be more beneficial for me in the long run. On the one hand no mortgage = increased savings = possible to buy larger outright later on the other if i sit on the property long enough for the market to increase potential for greater percentage gain.

mlz1413

Only you can decide if its better to stay put or to buy/rent somewhere and call it your own, even if this means the inherited house sits empty.

A 'tenant' in one room is normally known as a lodger, ie they have a bedroom of their own and then share kitchen, bathroom, lounge areas. The government allow you to charge upto £4250 per annum without paying tax on the income - look up direct.gov and 'rent a room scheme' for details.

As you have 5 months until July maybe you could agree a plan with your sister that say March to May you will market property at highest valuation, then June to July at lower price. Then from July you can take the feedback received and discuss with your sister how to move forward, ie one buys out the other or you redecorate and remarket. Assuming of course it hasn't sold.

IMO whatever you decide take out the worry of future % gains v smaller/larger property - just do what is right for you now.

sofrajean

I think I've decided that I want to buy her out, I'm mentioned the theory to her and she's cool about it I now have to see about getting the finance for it.

I have been accepted on a course beginning in september where I will be receiving a 9k bursary for 9 months study. I'm currently earning 17.5k.

I have spoken to a mortgage advisor that doesn't think it'll be possible to get a mortgage because i know that my income will reduce.

Are there any products available for assisting in keeping inherrited property in the family?

Do you think i should hide the fact that I'm going back to being a student? Contingency is there to make the mortgage repayments durring this time.

Grrr its all a mine field, inherritance is the hardest thing ever if its not bad enough that you have grief to deal with.

456789

Instead of getting a mortgage arrange to pay your sister £x/month until it reaches the value of her share?

p00hsticks

sofrajean wrote: »

Grrr its all a mine field, inherritance is the hardest thing ever if its not bad enough that you have grief to deal with.

I'm sorry for your loss, but compaining about the fact that you've been left half a house does seem a bit ungrateful! Many people would love to be in your position.......

sofrajean

yeah i've thought about that, will depend on what she says about the whole thing. Part of the reason for buying her out is because she'd like to release the money from the house. I suppose tho we could have an agreement that once I'm qualified and earning then I take out a mortgage. Or maybe asking for a smaller amount and be able to give her a lump sum now and regular payments.

mlz1413

Contingency is there to make the mortgage repayments durring this time.

can you use any of this contingency to buy out sister?

Or if you are both being left half the house and some cash could you offer to take more the house and let sister have more the cash?

sofrajean

p00hsticks wrote: »

I'm sorry for your loss, but compaining about the fact that you've been left half a house does seem a bit ungrateful! Many people would love to be in your position.......

To be fair I'm not complaining about being left half a house and to be honest I'd live in a cardboard box and live off scraps if it meant i could have my mother back.

I take it from your comment that you've never been in my situation, now that I've decided that I would like to keep the house that I've lived in since i was 6 months old I'm terrified that I may not be able to.

I ask you to consider who you would be willing to 'lose' in order to be in my situation?!?!

sofrajean

there isn't enough cash to cover the value of half the house.

smartpicture

sofrajean wrote: »

I'm currently living in the property which needs work which she is uninterested in doing or paying her share for.

Are you living there rent-free, or paying something to your sister for her share? If rent-free, I would have thought it was fair for you to pay for the work that needs doing, as you're benefitting from, say, £500 rent you would otherwise have to pay to live elsewhere, while your sister pays for her own accommodation. Your sister could suggest that you find somewhere else to live and you rent the house out so you both get the same amount of benefit from it, but she's allowing you to benefit from living in the house until it's future is decided. Of course, if you're paying her rent, this point doesn't apply.

Re the mortgage, it's hard to see how you could afford it, and you may be better off not tying yourself up financially in this way so early in your career. I know it's hard when you're sentimentally attached to somewhere, but try and look at this as an unemotional business proposition before you commit to anything and ask yourself if it still makes financial sense.