Should we sell up and rent?

Jollygiantswife

Hi,

Just after a little bit of advice - as I'm not really sure where to get it from!

To cut a very long story short-ish, our current lender (Advantage) has made us an offer of £20,000 to end our mortgage with them (think they're going into administration and are trying to offload mortgages). The thing is, this offer has been available to us for well over a year and we've been frantically trying to re-mortgage which we knew would be difficult as my DH is currently unable to work following an accident, so we have my full-time salary, his benefit and Tax Credits coming in.

Unfortunately we took the advice of a deluded financial advisor who has not only cost us in excess of £1500 in surveys and solicitors fees, but has generated 15 searches on our credit file - our credit rating has gone from 'Good' to 'Fair' in the last year....

Added to this, the bus our DD used to take to school has stopped running (due to County Council spending cuts) and since we do not live in the catchment area for her school we are now having to pay in excess of £5 per day for school transport (this will increase next year when our son starts there). I really can't move her out of that school, she's just started year 10 and the local schools are awful!

A solution could be to sell our house, take the money from Advantage and rent a property closer to our daughters school for a year or so (therefore providing approx £35,000 for a deposit on our next home when we decide to buy again and getting free school transport).

Our biggest concern is: would we find it even more difficult to get a mortgage in a year or so (we're hoping that DH will be able to return to work within the next 3 months) as we've come off the property ladder. Also I have no idea how much it would cost us to rent (apart from the obvious monthly rent) i.e. deposit, admin fees etc, and would our credit rating prevent us from renting?

Ooh so much going on in my head!! Any help would be greatly appreciated!!!

missile

You do not give your income and current mortgage so it is difficult to give constructive comment on remortgage. You could look at one of the online calculators > http://www.halifax.co.uk/mortgages/remortgage-guide.asp
Presumably your financial advisor thought you were elidgeable for a mortgage? You must know with which provider(s) and why you were rejected?

Do you think you could sell quickly? Some areas are more bouyant than others. You do not say where you live?

You seem to want to move to be closer to a.n.other school. Unfortunately, if your local schools are so bad this would lead me to believe properties near the better school might be much more expensive? Your £20,000 payout could easily be lost on buying and selling costs, removal fees and expenses.

Jollygiantswife

Hi,

My income is approx £25,000 and together with the benefits and Tax Credit we receive we have an 'income' of approx £39,000. We have done all of the online calculators - and on paper we qualify for a £110,000 mortgage. The problem always seems to be that either lenders stop lending (Beacon) or get cold feet about our method of income (Abbey - as was, Alliance & Leicester - as was, Barclays, Woolwich), or have been given incorrect information by our financial advisor (which happened just lately with AToM) and then decided we were too much hassle!

I think we could sell relatively quickly, the market here seems to be fairly buoyant (Norfolk) and the area in which we live is favourable. Properties near the better school tend to cost about the same or even cheaper - this is because we currently live in a town and the properties we'd be considering are spread over a large area in rural villages (hence the decision not to try and buy straight away - we want to make the right choice of location).

We know (from previous experience) that it would cost in the region of £7-8 K to move - but this is something we would probably have considered in the next couple of years anyway - we're just bringing it forward and thinking of renting in the gap!

Hope this helps.....