I'm fed up with my budget - advice needed

Debt_Free_Chick

want2bmortgage3 wrote: »

mortgage £644.40

YIKES! I assume you're on a fixed rate (the interest on my £320k mortgage is only £660 a month!!!!).

If so, when does it end?

Strapped

want2bmortgage3 wrote: »

just an update i haven't had a lot of time due to work but now i have a week off so can get a few things sorted out.

i am going to give a lodger a go and see how i get on with it. also going to look for part time work. both of these could bring me in another 5/600 a month which would make things look a lot better.

i will see how that goes. in the future when house price go up a bit i may consider moving house. one idea (if i dont enjoy having a lodger) is to downsize to a 1 bed/studio and reduce the mortgage that way. the other option (if i do like having a lodger) is to get another bedroom and possibly not as nice an area just in order to increase my income. 2 lodgers could pay my mortgage for me.

right now i have more debt on a credit card than i have in my bank so its a bit worrying, but i think when you are put under pressure you either fail or become more determined to succeed...

Depending on the rental market where you live, you may struggle to get lodgers in a less nice area. Stick where you are if it's a nice area and get yourself one decent lodger. Have you ever lived in a shared house? You need to get yourself into a mind set to be able to enjoy sharing (not just "tolerate" or you won't keep your lodgers for long).

I'd try to increase your income in other ways too & chuck every penny towards getting rid of the cc debt first before the "having a life". Good luck.

want2bmortgage3

I must also add I have the option of moving back to the parents, in the bigger spare bedroom, for very little rent (probably £100 a month!). As much as I like my own space I am considering this because it would mean I'd be so much better off and could really hammer down the mortgage with overpayments. Also if I lived there I'd probably wanna be out more so may encourage me to get a 2nd job and earn even more. What do you think??

focus888

If your parents will have you and you dont mind the lack of privacy i would do this and rent out your flat, you make more money this way. You always have the option of moving back to your flat later on when you have saved up abit of money from being at home.

Fire_Fox

want2bmortgage3 wrote: »

I must also add I have the option of moving back to the parents, in the bigger spare bedroom, for very little rent (probably £100 a month!). As much as I like my own space I am considering this because it would mean I'd be so much better off and could really hammer down the mortgage with overpayments. Also if I lived there I'd probably wanna be out more so may encourage me to get a 2nd job and earn even more. What do you think??

Interesting - it would probably be easier to work two jobs if you have parents cooking for you several times a week (but make sure you return the favour sometimes!). :T

Ask local letting agents if it would be easy to let the entire flat or room(s) in the flat - this tends to vary depending upon what type of tenant the area attracts. You will need to be prepared for tenants to trash the place as you won't be there: do you have good quality or basic fixtures and fittings? Also don't forget the income will be taxable, and you will have to get your mortgage company's approval. :mad:

Perhaps it would be worth trying the lodger and/ or second job thing, then trying moving back with your parents if the lodger didn't work out. That way you would be clear in your mind it's the best option, and not think the grass is greener ...

want2bmortgage3

Thanks for all the advice so far. The decision has been made to rent out my property after a positive meeting with a local estate agent. Even after their 15% commision for managing the let, I will still end up with over £700 a month which covers the mortgage, buildings insurance and a small amount I can save for emergencies.

So I am going to be back at the parents rent-free (although will contribute to shopping and other things). This means I can use the majority of my wages for whatever I want. One big idea I have is to save a new deposit for another property, so I need to create a target based on the type of property I'd like. I guess that Id be better off putting this money into overpaying my current mortgage as it will be paying off at the rate of 4.89% which i would not get anywhere near with a savings account.

Fire_Fox

want2bmortgage3 wrote: »

Thanks for all the advice so far. The decision has been made to rent out my property after a positive meeting with a local estate agent. Even after their 15% commision for managing the let, I will still end up with over £700 a month which covers the mortgage, buildings insurance and a small amount I can save for emergencies.

You have to pay income tax on this - IIRC you can't write off the management fees on the first let. You can write off insurance, interest on the mortage (not capital repayments) and repairs (but not improvements).

If you live nearby and it's a relatively new flat I would pay a finders fee to the agent so they do all the necessary credit checks. Then cut them out of the equation as they will do very little work for the money. If they get involved in any repairs they will charge extra, both for the repair and often for their involvement. All you are paying for is collecting money (tenant should pay by standing order anyway) and fielding the occasional call regarding repairs.

The letting agent I used came recommended, yet they put a smoker in my flat (I specified not), charged him the wrong amount of rent, then went bust with two months of my money AND the tenants deposit.

KiKi

Debt_Free_Chick wrote: »

YIKES! I assume you're on a fixed rate (the interest on my £320k mortgage is only £660 a month!!!!).

That sounds LOW to me, though!! Assuming you're interest only?!

My mortgage interest rate is 0.99%, £165K when I took it out. I pay £560 a month!

Hope things are working out well for you, OP.
KiKi

want2bmortgage3

ok another update as I seem to be in a constant state of confusion and not knowing what to do!

Well I've found out my job is moving nearer to home so I will no longer need a car. Where I am currently is about 5 miles from work.

So now, I am considering either renting out my place and finding a room near town/work. I do fancy being able to walk to town instead of a bus ride.

Or selling my 2 bed and buying a 1 bed place nearer work/town for a bit less to cover fees and also reduce the mortgage a little.

Is it straightforward to sell and buy if the price is about the same or a bit less? I wont be wanting any more money from the lender..

want2bmortgage3

Thought has reoccured to me about 'downsizing' seeing as i dont fancy having a lodger and like my own space. Why dont i go back to a 1 bed/studio, which i've seen on the market for about £95k. my 2 bed is worth anything between £130-150k so would reduce my mortgage and make things a lot more manageable. plus no hassle of renting out/lodgers/finding a room myself. what do you reckon, and does anyone know the answer to my question about selling and buying a cheaper property, is it straightforward seeing as i dont want to borrow any more?