Should I sell the house and rent instead?

cannegan

Hi there - really confused so hoping someone can advise. We have a secured loans / mortgage worth around £125000 on a house worth £135000. We are also in a debt managment plan with payplan to repay debts of around £50000. Also have a car loan of £270 / month.

I think if we sold our house the equity should just about be enough to pay for removal / fees for leaving mortgage agreement / stamp duty etc. Our mortgage and secured loan payments are around £900 a month, and we could rent a decent sized house in the same area for £600 - £700. Should we do this and to save £200 a month, plus save on house insurance / life insurance costs? I should add that we are only paying interest on our mortage payments, so they feel like wasted money anyway!

I thought we could consider buying again once our debt management plan finishes, by which time we would hopefully have saved enough for a deposit?

Please help!

Many thanks

cannegan

Just bumping this in the hope that someone might be able to help.

Jollygiantswife

Me too! I'm in a similar situation so any advice/opinions will be appreciated!

tyllwyd

Before you start - if you are in a debt management plan for a pretty substantial amount, are you sure that you would pass a credit check for renting? If you plan to buy again, how long do you think it would take to pay off the dmp before you can start thinking about saving a deposit? How confident are you that you would be able to get at least £125K plus costs from the sale?

cannegan

The DMP would take around 5 years to pay off - maybe less. As for the credit check for renting, I honestly didn't realise I would need to pass a credit check! Eek! That's a bit worrying and I'm not sure whether or not I would pass such a check. How could I find out?

Thanks for the response, by the way.

cannegan

Oh, and I'm pretty confident the house would sell for £135k. If not, I suppose I wouldn't sell.

tyllwyd

cannegan wrote: »

The DMP would take around 5 years to pay off - maybe less. As for the credit check for renting, I honestly didn't realise I would need to pass a credit check! Eek! That's a bit worrying and I'm not sure whether or not I would pass such a check. How could I find out?

The best thing to do would probably be to ask in the debt-free wannabee forum. I might be worrying you unnecessarily and it might not be as difficult as I thought, but just in case it is better to get an idea now rather than further down the line when you have committed yourself.


Could you really pay off a £50K debt in 5 years? Wouldn't that be about £800 a month? Sounds a lot to me!

cannegan

Around £600 a month at the moment, with a further £270 a month in two years when the secured loan ends, plus I've already been paying for 6 months, so its a bit less than 50k.

Thank you though - I will certainly check whether I could rent or not with my credit rating.

hermum

An agency probably wouldn't touch you, unless you have a working guarantor.
Are you able to have a lodger or do you not have the space? The chances are that if you bail now you won't get back on the ladder.

cannegan

When you're on the ladder it's madness to jump off.

Why? I currently can't see a benefit to being on the ladder. I feel like I'm on the bottom rung and unlikely to climb any higher at the moment. The house is too small to rent, its a two bedroom bungalow and I have a wife and two kids.

carolt

There isn't any benefit. The poster who posted that is a well-known housing troll and can be ignored.