Thinking of Selling Up to Rent before buying again

J-lo

Hi

Desperate to move house but taking on a more expensive mortgage with lots of outgoings is not a possibility.

We've had a plan to sell our house, use some of the money to pay off all our debts, stick the remainder in our savings and rent, saving all the money we used to pay our creditors. I can see this happening for 12-24 months. We're both coming up to being 40 so we have to do this sooner rather than later if we don't want to pay off a mortgage for the rest of our lives!

Eventually we'll get a new mortgage, debt free (other than that of course!) and start off in our new house with no worries.

Can it really be that easy? Has anyone got any good advice about this?

mjdh1957

Not sure about it being easy. You might wait a long time to find a buyer for your house once you have decided to sell.

Otherwise. it sounds like it might be a good idea. One concern might be that you need to address your underlying overspending problem (assuming that's what got you into debt in the first place). Otherwise you might find yourself in more debt in a few years time but with no assets or savings.

Check out the Debt-free Wannabee Board for more insights into this problem.

J-lo

mjdh1957 wrote: »

Not sure about it being easy. You might wait a long time to find a buyer for your house once you have decided to sell.

Otherwise. it sounds like it might be a good idea. One concern might be that you need to address your underlying overspending problem (assuming that's what got you into debt in the first place). Otherwise you might find yourself in more debt in a few years time but with no assets or savings.

Check out the Debt-free Wannabee Board for more insights into this problem.

Many thanks for that - I understand what you mean about the 'overspending'. I know I don't need to justify it but most of it's down to bad luck! A bit is from a failed business but we both are in full time employment now and this year we had to get a lot of work done to the house (roof, chimney etc) and at the same time our car went 'bang'. Yes this can happen anytime but when you've already got a bit of debt it can easily escalate. Plus in a few years we won't have to pay child maintenance anymore which is another mortgage in itself!

Chinkle

It can be the right move for some people. Have you looked at the rental market to see what you can afford? Are you looking to downgrade house when you rent to help build up a savings pot for when you do buy again. Or maybe just clear your debts and then rent a nice place that you wouldn't otherwise be able to afford to buy?

You are taking a bit of a punt on what house prices may or may not do in the future, so if you do fully intend to buy again at some point, keep in touch with what the market is doing.

J-lo

Chinkle wrote: »

It can be the right move for some people. Have you looked at the rental market to see what you can afford? Are you looking to downgrade house when you rent to help build up a savings pot for when you do buy again. Or maybe just clear your debts and then rent a nice place that you wouldn't otherwise be able to afford to buy?

You are taking a bit of a punt on what house prices may or may not do in the future, so if you do fully intend to buy again at some point, keep in touch with what the market is doing.

Believe it or not we can rent something a lot bigger for the mortgage we're currently paying on our own house. Just realised one problem though - I have 2 cats! That will seriously cut down on my renting options. But you don't know until you ask - least we're not smokers or DSS (**being hopeful**).

Horasio

We were lucky and sold our place three years ago and have rented ever since.

We can live in a place that we could not afford to buy and feel free if we want to buy or move away.

Animals can be restrictive, I wouldn't pick a really pristine house, as they may say no pets, and the LL wanting to evict to sell or demolish or live in it can happen.

Gwhiz

I sold 2 years ago and have been renting while I look for a plot to build on. It's a great feeling knowing as soon as you see something you want you have nothing stopping you from making an offer and doing a deal.

tyllwyd

Have you looked at any other options, like extending your mortgage to as long as possible to bring down the monthly payment and putting any spare money into your debt repayments? Have you used the snowball calculator at whatsthecost.com?

Selling to rent is quite a big decision and so it is worth checking all your options first. If you are using almost all the equity in your current house to pay debts, how long do you think it will take you to save up a deposit for when you want to buy again?

Jollygiantswife

Hi J-Lo, we are in exactly the same position as you! Our current mortgage lender has offered us £20k to buy us out of our mortgage before they go into receivership and due to my husband being off work due to long term injury from an industrial accident we are not in a position to re-mortgage (despite several attempts over the last year...)Added to this, our local council has pulled the subsidy for the school bus my daughter used to get to school (which is 15 miles in the opposite direction to where I work) and our son will be starting at that school next September.So, we are thinking along exactly the same lines as you - selling our house (which, combined with the offer from our current lender should leave us at least £30k in our pocket), rent a house closer to our daughter's school (means moving 5 miles but she'll then be entitled to a free bus) and use the next 12 months or so to get ourselves in a better position financially so that we can buy again.It's not an easy decision to make, and we do worry about stepping off the property ladder, but our gut instinct tells us that this would be a sensible decision in the long term.Good luck with whatever you decide - keep us posted!