Should we move - help me get my head around it?

RoxieW

Well I've got a big decision to make and I'm struggling to get my head around all of the ifs, buts and maybes. I'd welcome all thoughts, opinions, points to help me make my mind up if anyone has a minute spare

Situation at the minute -
50% share of shared ownership house.
45K outstanding on mortgage.
0.5% mortgage interest rate (tracker) so £220 repayment
£150mth rent
Outgrown our house (3 kids) - standard 3 bed semi - low on storage, no garage etc. Area we live in ok - very rural, safe, comfortable but also not great facility wise and a little bit grotty (in case you thought it was some kind of idyllic county place lol) School ok but not ideal. Good friends in the area, plus children clubs/activitys.

The original plan was to stay here until we can afford 'the dream house' move in around 5 yrs time ie when I'm back at work and we have a bigger deposit.
However, we are literally bursting at the seams here and so are thinking of taking the next step up the rung onto a 'stop gap house' for the next 5 or so years.

House we have seen -
Asking price £179,995 but would offer £165K.
Need 90% ltv so higher interest rate - prob around 4% if we risked a tracker, 6% is we go for a fixed

The house has the extra space that we need. The immediate area around it is lovely (surrounding by huge houses). It is closer to the city which means closer to OH's work saving about £150 mth petrol - plus the £150 mth rent. Closer to the facilities of a city but also closer to the problems of a city too. The local schools are better. However, I wont know a soul

Trying to make sense of it financially as we dont want to shoot ourselves in the foot. We are on an amazing interest rate at the moment but how long that will last who knows?

As well as financially I guess I just have cold feet about moving to another area but then I know that friends aside this definitely is not an area we want to be in long term.

Any advice from anyone? thanks in advance

poppysarah

You own half and rent half
"0.5% mortgage interest rate (tracker) so £220 repayment
£150mth rent"

So why can't you rent 100%?

RoxieW

sorry i dont understand? we dont want to rent.

crabcakesfordinneragain

There are two seperate questions here - 1 financial, 1 domestic/emotional. I'd suggest you work through them seperately and I would recommend writing down - even if you just do it as a post here. Start with financial - a couple of points: have you had your current place valued? What is your equity and what are your savings like? How much would buying and selling costs (solicitors, stamp duty, mortgage application fees) add? What can you comfortably afford to pay on a larger mortgage? (Check out mortage rates first - 6% may be on the lowish side if you are going to be 90 LTV). Does it make more sense to overpay your current mortgage as much as you can/buy more equity and then move in a year or two? Start with these questions, you will come up with others as you think this through, and this will give you a feel for your financial position.

Something I occassionally do when trying to reconcile money v emotions is "traffic light" the scores - so when you have worked through all the money related points see if it is "red" (don't proceed, stay where you are) "green" (absolutely proceed) or "amber" (go back to in more detail, maybe speak to a broker or someone you know whom you trust first).

Then look at the emotional side, ask your self - how will family cope here, with move, with moving again in a couple of years. Distance from friends, services, family, schools etc at each property? You will know that the questions are.

One thing I think people often neglect is the ground where these two overlap - ie you might be spending less on essentials (rent, mortgage, trnasport) where you are now, but are you spending more on non-essentials to make up for distance, lack of space etc? If you have a monthly budget, bank online or keep receipts go through - for example, do you take the kids to soft play a lot because the house is to cramped in the holidays? How would they feel if you weren't able to do these things?

On another note - please think very carefully about your new mortgage. Are you sure you'd want to risk a variable, given that interest rates can't really go down (but they might stay here for a while)? Equally, are you thinking repayment or interest only?

crabcakesfordinneragain

sorry - long post!

poppysarah

RoxieW wrote: »

sorry i dont understand? we dont want to rent.

I was just suprised how much cheaper the rent was than paying the mortgage even on the very low rate...

maryotuam

Why is a 3 bedroomed house too small? 2 children in one bedroom and one child in another doesn't sound excessive. If you had a declutter session and redecorared the house you are in, would you feel more settled? On some of those property programmes which tart the place up for selling, some people have totally changed their attitude to selling.

Just throwing a point into the mix for consideration. It may or may not have any relevance in your situation.

RoxieW

oh I understand now - that rent is only so low because it is set by the housing association. Market rent is about 600 for similar property.

the 3rd bedroom is only a boxroom unfortunately and the house we are looking at also has playroom and utility room which would make a big difference.

poppysarah

RoxieW wrote: »

o
the 3rd bedroom is only a boxroom unfortunately

Can you fit a bed in it?

RoxieW

I think we've gone passed the declutter stage unfortunately. With two young boys and a small baby having a playroom would make a big difference as it would mean we can keep the lounge kiddy toy free! Plus the mountains of washing and ironing everywhere are a nightmare - a utility room would be fab!

Money wise we've £25K equity so that would mean using the equity for 10% dep plus fees, stamp duty etc. It's a tight squeeze and another worry really. We can afford the mortgage.

But another consideration is taking advantage of the housing market being low as we are in a strong position that we have already had an offer on our house and it has kept value quite well as shared ownership properties are always in demand around here.

RoxieW

i believe it does fit a single bed in - we havent tried as we have either had a cot or cotbed in there. A bed and a chest of drawers and that is about your lot. I think its about 6 x7ft.