Need advice

mabbu79

Hi all,

This is my first post so I apologise if I do anything wrong?

I will cut to the chase...

We currently own our flat and have been paying our mortgage with no problems and no missed payments from day 1 (nearly 5 years now).

I dont want to go into this much but during our first year living in the property we had to take out a large personal loan due to medical reasons, we are notashamed of getting into debt as it was for a good reason and we got our beautiful daughter out of it.

Anyway our daughter is now 2 and we need to buy a house because we live on the sixth floor which isnt ideal with a toddler and we have no room.

I work full time and earn a good wage but my wife only works part time, we have the 15k of debt and our flat is in around 6k of negative equity (damn recession!).

What are my options? do you think I should speak to a broker? We are thinking of a part exchange deal on a new build?

kingstreet

How much deposit do you have?

mabbu79

We have about 5k but could get another 2k?

We have been wondering if to put that money towards our debts?

kingstreet

The loan will affect affordability as your borrowing power will be reduced. This will influence the type of property you can purchase.

For the new mortgage on the new property, you'll need at least 10% deposit. If you do part-ex, you're going to use up all the goodwill from the builder in getting them to accept your current property at 100% of market value, let alone with them taking on the negative equity in the transaction. That's if they are prepared to take a high-rise flat.

That means no builder's deposit on the new one, and few other incentives.

I honestly can't see this being a workable option. Selling, trying to deal with the negative equity from your savings and renting a more suitable property appears to be the most sensible option.

mabbu79

Thanks Kingstreet,

I thought that might be the only option we had and to be honest I dont mind renting, its just a shame because it took us years to get on the property market and now it turns out it has been a waste of time, money and effort.

Oh well :-(

somethingcorporate

You could stay put if you are desperate to stay on the housing ladder.