whats the best ?

pigalert

hi have just been reading a few of the threads on here some great info

i was wondering what you would do in my situation
we bought our house 5 years ago from the council so now our payback has finished the end of this year. we have a mortgage on it but only pay the interest because we never planned to stay here. we have quite alot of debt but if we sold we could pay off most of our debt and rent. also our kids go to a school out of our catchment area and we have been told they are ok at the primary school but secondary school they have no chance of getting in. we cant afford to buy near school but if we sold our house got rid of debt we would be able to rent. really we are only paying interest on our own so we are technically renting this one.

do you think letting go of this house and renting one is the right thing to do so we can get rid of debt and give our kids a better education ?
ps soz bout spellin and punktuation :rotfl:

BitterAndTwisted

Why on earth do you have an interest-only mortgage? What plans did you have in place to pay off the capital?

One would have thought that if you only have an interest-only mortgage to pay each month you should have sufficient disposable income to get those debts paid off.

Have you done any research on what properties might be available in the area you want to live and what the expected rent might be? Would you be happy with the possible prospect of being on the move every 6 to 12 months?

pigalert

we never plan to pay off capital as we wanted to sell this and buy another.

cant afford to buy .

we are paying out other money in debts.

if we get rid of them we would have plenty of money to pay the rents.

and there are lots of long term lets in the area we are looking .

sonastin

I have to confess that my instinctive response is one of horror. It appears that you are milking the right-to-buy discount to let you live beyond your means. Effectively the taxpayer picks up the tab for you living it up. I hate the fact that we've wound up with a system that lets people do this.

Objectively, I can't find fault with your plan. Just make sure you don't get into debt again because its not the taxpayer's job to bail you out...

kingstreet

Choosing an interest-only mortgage was not in itself incorrect if the OP was using the money saved to paydown other more expensive credit first. However, this doesn't appear to be the case, so now the only option appears to be to utilise the capital gained from the RTB discount to settle these debts.

TBH, it's your call. If you want to rent again, that's up to you.

TonyMMM

Current value of house ?

Mortgage outstanding ?

Any penalties repayable to council when you sell ?

How much other debt ?

pigalert

we are the taxpayer for gods sake. people make mistakes getting into debt i thought this was all about helping people and not judgement all we do is pay bloody money out we dont claim anything. the tax payer isnt paying my capital we pay our debts not the tax payer most people on this forum are nice and give advice but you know what the rest of you are nasty people. yeah were living the high life we live on a horrible council estate were i darent even take my rubbish to the bin at night and we have to spend hundreds of pounds a month driving our kids away from here to a good school every day because we thought we were doing the best thing buying a house and now i wish we hadnt bothered
like i wish i hadnt bothered posting this i suppose you live and learn i want to do the best by my family and i couldnt care if you think im milking something cause we have never got anything for nothing

kingstreet

As far as I'm concerned, you paid rent for long enough to qualify for a discount. You've seen out the pre-emption period. Your home is yours to do as you see fit.

Others may disagree.

Do you feel confident in selling the property in the current market, given the surroundings you describe in your latest post?

joerugby

The main disadvantage of renting in the UK is that it is insecure. Once your original term is up the landlord can give you just 2 months notice to quit for no reason. It can also be difficult to get repairs done and moving out is sometimes the only feasible option.

If you decide to rent, once you are sure you've found the right house and met the landlord try to get a one year contract, then if you are still happy after a year go for another 12 months.

Make sure whilst you rent you are also paying down your debt and saving so you will be in a position to buy when the time is right.

Good luck!

ladymarmalade1970

My initial thought was you must be mental to give up a house you have a mortgage on in order to go and rent but when you said it's a horrible area I can see your reasoning. However, have you thought about renting your house out and renting nearer the school for your kids yourself? Not ideal i know and you will still have debts but at least you would have some security for the future.

BitterAndTwisted

I think with the OP's past decision-making they are not in an ideal position to become a landlord, so letting the property and renting another could become yet another millstone around their necks.

I'd sell up if it will release equity to pay off debts, it's just a shame that yet another property has been removed from a local authority's control which could have housed a family in need.