Advice on going from a mortgage to renting

lynzpower

I worry about these firms as the rule of thumb goes, if it sounds too good to be true, it probably is, ie will they put the rent up in the future etc?

I wonder, would you be able to get council or housing association property to rent instead? the rents are pretty much capped to be "affordable"

briona

whitewitch wrote:

As to landlords- the ones I have had wanted references but i don't imagine they can do a credit check.

Actually landlords CAN do some sort of credit check. [Mine did!] It's called a Landlord Status Enquiry which basically means that your bank faxes his/her bank to let them know whether or not you can afford the monthly payments. While the landlord never gets to know exactly what your financial situation is, if his/her bank advises against taking you on, there is no way they'd do it!

I asked my landlord if anyone ever failed this check and in his many years of renting, he said there had been a few...

Briona

earthboundboy

lynzpower wrote:

I worry about these firms as the rule of thumb goes, if it sounds too good to be true, it probably is, ie will they put the rent up in the future etc?

I wonder, would you be able to get council or housing association property to rent instead? the rents are pretty much capped to be "affordable"

I have the same reservations, and the CCCS don't have much knowledge of how it all works. I am guessing they make their money by offering you less than your house is really worth, banking on the idea that being short of options you'll go for it. They suggested getting some advice from a proper financial advisor, though whether any of them will know much about it I don't know.

There is no such thing as council property round here. We need to stay in the town we're in for family reasons (schools, proximity of family etc) and it just doesn't exist round here. The town I live in is filling up with blocks of commuter flats. We have a 3 year old daughter and live in a 3 bedroom house with a garden - I'm not sure I fancy the idea of taking my family into a council flat just to clear the debts. I'd rather struggle on and scrape by waiting for my salary to go up (which it will do, in line with my studies).

There must be some way of researching the background of these companies? Are they obliged to provide you with a set of accounts I wonder?

earthboundboy

briona wrote:

Actually landlords CAN do some sort of credit check. [Mine did!] It's called a Landlord Status Enquiry which basically means that your bank faxes his/her bank to let them know whether or not you can afford the monthly payments. While the landlord never gets to know exactly what your financial situation is, if his/her bank advises against taking you on, there is no way they'd do it!

I asked my landlord if anyone ever failed this check and in his many years of renting, he said there had been a few...

Briona

Luckily my relationship with my bank is pretty good - never gone overdrawn or not had enough to cover the DDs going out. Hopefully that would be OK for them. If they *did* do a proper full credit check they are legally obliged to tell you so before they do I believe.

earwig

you wouldnt get a council house because you sold you house so you would have made your self homeless and if you are in rented they will tell you you our allready housed i knew this as im stuck in rented at the mo and that what my local housing dept told me i have 5 pionts but you need to have over 30 to get housed and the only way to get that many points is to be evected so council housing is not an opp for unless the house get reposed through no fault of your ie loss job ect hope this helps

earthboundboy

Well, I've just spoken to a couple of these quick sale and rent it back outfits and the most they will give you is 80% of the market value of your house. For us, that doesn't even cover the outstanding mortgage and the egg loan secured against the house.

God, how depressing.

library_lady_2

I sold my house in 2000 to pay off cc debts and to give us a fresh start, the plan was to sell quick (we did house sold in 2 weeks), we were fortunate as I was able to rent from my cousin (she moved in with her boyfriend), hoped to buy again once we had a good deposit unfortunately house prices almost doubled in 6 months (our house sold in May 2000 for £43,000 same house/area in October selling for £70,000) husband had a heart attack (at 39!!) and house ownership went out the window. Fortunately he was able to find work as school caretaker and we live on site so rent is nominal and taken from his wages. However whilst I would never regret selling the house (I really hated it and even now don't regret getting rid of it) I do see the financial sense in owning but I hate this countries obsession with home ownership, I still believe its just bricks and mortar and you can't take it with you. Having said that, renting is "for life not just for length of mortgage" so dead money and as our children grow I regret that I can't help them onto the property ladder and can't see them ever being able to afford one if they continue to rise also no inheritance for them when we die. Sorry this is an epic and totally contradictory I know but I see your struggle from both sides and essentially your decision had to be based on quality of life (it really is very short and we don't know what tomorrow may bring) and what is best for you and your family.

TBC

I would say don't do it personally. If you like the house and area stay there!

I did the same thing earlier this year to a company that buys them and offers to rent them to you.
The rent would have been over double the mortgage payment and if we had sold the house private, although it would have take a while longer, we could have made £20,000 roughly more.

We had more reasons than just the debts to sell up, we now live near a good school for the two kids, it's a quiet area where the cars don't get broken into but the bad bit, the part I truely regret.....
We didn't pay anything off :mad: we were left after moving, paying the solicitors off with about 3k in our bank account!!! this was because the solicitors fees and moving fees and such were so high, the most of it went on rent.
You will find it virtually impossible to rent without a credit check. I managed it by agreeing to paying 6 months in advance (650pcm, £3900) this meant that no credit check was required. Don't worry we didn't pay anything for 5 months so only have 1 month owing

Since then my OH has not learnt a thing from the 3 years of struggle and has run up a bill of £800+ in unpaid gas, water, electric and phone bills, basically all the money I've handed over to pay these has been spent.

So to top it off, we had a three bed semi, sold it for nothing, and now have a rented house, £9k in debts + new debts from rented house and as normal now I'm left trying to work out what to do.

Ah well, such is life, you know, I've been doing this for about four years now, I'm starting to enjoy the challenge!

kar

The agency my OH rents the house through did a full credit check on him, me (even though i am only on the agreement as an 'allowed' person) and his mother (hes 31 - but hadn't been working 6 months prior to taking the agreement). They do this for everybody as insurance to the landlords/ladies that the people renting the property are gonna pay.

Just so you know about this - they even made us pay for the stupid thing :mad:

On top of that we had to pay 2 months deposit and it clearly states in our contract that this can not be used for the last months rent.

I would say don't do it. If you possibly can cope with not doing it. renting is a big pain in the backside - we're just throwing money away - and for example if your boiler broke down your actually in a worse position. Ours broke down in sept - wasn't fixed until dec - you can't organise anything yourself cos the landlards are paying not you. It's never really your house and yuo constantlyhave to chase people to get things done.

Is there anyway you could increase your income at all? Second job at nights in a pub or something and then use all this extra cash to pay off EGG and then increase you agreement with the CCCS?