Some Advice Required <pretty pls

PaisleyPPL

Hi folks ,

Having a wee debate here between my partner and i ,looking for some extra opinions ,so heres the dilemma :

We are looking to move as we are graduating from uni this year (wooohhooo).Our debate is over whether to sell our property(and boogie on outta here ) or to rent the place out (whilst still booging on otta here lol) >When giving your thoughts pls be aware we havent got much cash and to be honest have been abit foolish in the past with cash ,we have pretty bad credit ratings but have no debt (other than mortgage stuff) and are current with NR with a together mortgage (i know iknow stupidty at its worst ). So Here goes

Our Current Situation :

Mortgage :£48,831 Unsecured Loan :£11,652 paying about £427 (including insurances ).

Have spoken to NR today they've said if we want to sell we can keep secured loan with them at a rate of 9.79% .Recent property sales in our area have been from £58,000+ .

My plan :Sell the place ,keep the secured loan ,either refinance later or over pay loan .By doing this we can then rent somewhere else when me move ,no hassel no fuss ,this time save for deposit and buy another place when we have about 20-30k saved up .

Partners Plan :Rent place out (assuming we get consent to let ,to me abit ifffy whether they would agree) ,move to rented accomadation when we relocate ,hope to god we can find someone to rent out quickly ,and sell in a few years .However this means staying on NR's SVR rate ,as we probably are not gonna be able to re-mortgage

So there it is folks ,hope i explain everything ok ,personally i wanna jump ship ,and set up somewhere else no ties ,he wants to hang on to the old place hopin to make alittle cash

wot to do ????????????????????????????????????????

TrickyDicky

Can you afford to completly refit the place if the tennents smash the place up and pay no rent?

PaisleyPPL

thats my point exactly ,if no-one rents thats an extra 427 on top of renting another place .I think altho yeah we could possibly find the cash ,it would probably leaves us scrapping the bottom of the barrell ,were moving to dublin and its looking like rent is goin to be around 900 euro a month ,factoring in that we wont be earning a huge amount as we will be on graduate salaries .

Fire_Fox

Haqve you factored in income tax, letting agency fees, repairs, tenants who don't pay/ smash the place up, gaps between tenants, landlords insurance, cost of safety certificates?

As regards your debts, complete one of these in full and consider posting on the Debt-free Wannabe board for advice: http://www.makesenseofcards.com/soacalc.html

PaisleyPPL

we have looked at costs for renting ,including those uve mentioned ,but when u look at all of that it will be quite tight for us ,it simply comes done to whether its worth being skint for a few years and sell the property when its worth more ,or getting out now and living better off in a rented place ,saving for a more reasonable mortgage i.e having a decent deposit ,would never go down the "together" mortgage route ever ever again >my partner feels that we should really try and make money off the sale of the property ,were as i think we should cut our losses and make a fresh start (all be it witha 11,000 unsecured loan! but we would look to refinance that at some point ,and heavily over pay it ,to get rid of it within 2yrs )

pie81

Seems pretty obvious to me. You are simply not going to make enough from renting the property (once you deduct management fees, empty periods, maintenance expenses, etc) to make letting it worthwhile, unless there is some sort of mega boom in property prices. With the economy the way it is (and likely to stay that way for several years) that seems very, very unlikely. I think your partner is being unrealistically optimistic, your plan is much better.

pie81

PaisleyPPL wrote: »

whether its worth being skint for a few years and sell the property when its worth more

IF it's worth more. Property prices could easily dip again over the next few years or even fall quite radically. Yes, they could also rise, but this is not guaranteed and you don't have enough of a financial cushion (in fact the reverse) to take the risk of a fall in prices.

Fire_Fox

Have you used the snowball calculator? http://www.whatsthecost.com/snowball.aspx
I think you should look at the cost in terms of interest payments on the loan plus mortgage, again the interest payments whilst you overpay the loan. Forget refinancing, you have rubbish credit ratings and this may never happen.

PaisleyPPL

Ahhh the calculator brings up some shocking figs ,looks like if we over paid it will take 4yrs to pay off .As for re-financing you are right forgeting about is probably the right idea ,however i was trying to find out if when moving to Republic of Ireland ,whether our credit rating would follow? ,if not we thought we may have a chance in a year or 2 if we built up a good rating ,have no idea wot im talking about ,probably talking rubbish .My main thought would be to overpay as much as possible

Fire_Fox

I am not saying don't try to refinance in a couple of years, I am saying don't factor that into your calculations. Check your loan will not be front-loaded with interest, or overpaying will be pointless.

PaisleyPPL

sorry if this sounds daft ,but what is front loaded loan ,and how would i know if ive got one ?:rotfl:really shouldnt be graduating from uni im a donut lol