Sell & Rent or Stay & Struggle???

zopoll

Everyones advice would be appreciated on this one;

There is no equity in our house, if we sell we would just about break even. We are making the mortgage payments but at a stretch and to the cost of our standard of living.
The way I see it is that we have two choices; Either we sell our house - cut our losses - and rent a property of the same size for at least £200 per month less than we currently pay on our existing mortgage. Or, we stay put, struggling but making our payments, waiting the problem out (not knowing how long it will take) and praying that our interest rates don't take a hike in the mean-time.

Thanks in advance

dimbo61

It will cost you to sell the house and you may end up getting less than you owe in the current market.
Cancel the SKY, GYM, going out and start living the debt free way using this website to save money on everything you have to buy.

SimbaSimon

Agreed. Cut back on your outgoings as much as possible and look at where your money is going. With a mortgage, it may go up if interest rates go up, but the mortgage total will go down with each payment. In 10 years time rents could have increased and your mortgage may be cheaper. If there is no equity then you'll probably just lose money on the selling the house.

Gyms, sky, mobile phones, holidays are all non essential. And you may get a pay rise or increase your income which could make it more managable.

The only things to consider if your on a fixed rate or not in case mortgage rates do go up in a few years.

Dick_here

Switch to interest only mortgage payments temporarily if things are that bad. After giving up other things already mentioned that is.

Dan_1976

If your income is not going to go up and your interest rate is low I would seriously look at selling up.

If your rate is average or higher than what is out there now and your income can go up then try and stick it out. You can cut back, but understand that is your struggling now you may have already cut back.

If your stressed and its getting you down blow the property and get a more healthy life.

Dan

snowmen

our friends have recently split and are in a similar problem.

their house is in negative equity by about £40K and they are struggling to make payments. They are on an interest-only mortgage already.

Is their best bet to sell the house and split the £40K negative equity half each?
And if so how do they pay this - obviously there would be no house to secure this loan as the house would have be sold?

Any help?

lynzpower

Snowmen

The remaining 20k each transfers onto an unsecured loan in thier names that they deal with like a normal loan.

dimbo61

That would only happen IF the lender agreeded to them selling the home at a loss and being happy with the repayment terms on the outstanding debt!

sabretoothtigger

What is the interest rate that you cant make mortgage payments, I doubt renting would be cheaper so I guess you really want to downsize and save that way.
Rates are only going to get worse from here so better you take action early I'd say