Urgent Dilemna

Cafemunners

Hi there. I wonder if anyone could give their thoughts as to what to do. Last year, I moved over from Wakefield (sold my house) and bought a flat in Newton-Le-Willows in Merseyside. I like the flat and the area and even now have a lodger to help with bills. However, my financial situation is very tight. I don't spend extravegantly. I work full time, have a repayment mortgage but no pension, life assurance or medical protection, yet on paper I should have £180 left over each month. I worked out if I co-buy a property, then that would solve all my problems plus I would have a pension, medical insurance and life assurance and a LIFE. If I sold my flat and rented a house with my lodger, then I would be around £300 per month better off and have a pension and medical protection. A friend of mine suggested that I change from repayment to interest only mortgage (even though my fixed term hasn't finished yet with the repayment mortgage) and not have an endowment policy or savings account until things get easier. My dilmena is should I change to an interest only account but not have a savings account/endowment for a few years and have no pension but get life assurance and medical protection OR sell and rent a property with someone and have a pension, medical protection and pay off my loan (which I haven't been able to pay back yet) and mortgage?

I thought about selling and renting so that I can save up and if I get to rent with someone and get to know them, they might want to co-buy with me in the future.

Thank you for reading and hope to hear from everyone's thoughts.

Lee

kingkano

Are you charging your lodger enough??? or giving them an easy ride....?

Is there a particular reason why you keep mentioning medical protection/insurance?? I mean NHS is not perfect but anything you really need will be taken care of. Also life assurance... you arent going to need the money if your dead (as my mum always said)?? But I presume you do actually have some... because it would be a requirement for your mortgage. Have a check....

DO remember if you break the fixed term, you liable for a penalty. Usually x% where x is how many years left of the fixed term. ie if you took a 3yr fixed term and your breaking it in year 2, your liable for 2% penalty of the total loan!! Which isnt to be taken lightly....

I cant advise on changing to interest only. Although I am not keen on interest only mortgages myself. I hope someone else will be along soon to give you some better answers....

when you say co-buy a property... I take it you dont know anybody now?? because you can always let them buy half your current flat... kick out the lodger?? Although if that would solve your situation it definitely means the lodger isnt paying you enough.....

AMILLIONDOLLARS

This is one for the DFW Board. I think this is down to proper budgeting, and you should start a spending diary, listing everything you spend money on, it should give you an indication of where your money is going. I agree with Kingkano, are you charging enough for rent and bills, have a look at your budget and see where you can make savings, its always hard in the first couple of years, it would be a shame if you were to sell as it would be much harder climbing back onto the housing ladder, don't forget your property is increasing in value every month, surely its worth being a bit broke every month for long term security.

By the way how old are you? why the importance placed on Life,Medical and pension? have you any dependents that will benefit from these?