should we sell or keep

sternjohn662200

Basically my wifes 100% mortgage is up for renewal. we currently rent the property oout and rent ourselves up north. With costs we have to cover mortgage by 140 but we would have to pay that if we lived there ourselves. we want to sell but at moment we wint break even and will end up loosing money.

This is causing problems as we want our own home up north but cant get one as we cannot sell that one and are stuggling to save up

we are up north because of my job and cannot live in the house but we dont know wether to cut losses and lose a few grand. start a fresh and take 3 years to save deposit or keep the house, subsidise the rent and hpe the prices go up and we cqn make a deposit on it as the mortgage is going down with each payment and hopefully the price will rise to what she paid for it.

any help or advice would be appreciated.

de1amo

i should post some figures as details to trigger the 'minds' off!

DVardysShadow

sternjohn662200 wrote: »

Basically my wifes 100% mortgage is up for renewal. we currently rent the property oout and rent ourselves up north. With costs we have to cover mortgage by 140 but we would have to pay that if we lived there ourselves. we want to sell but at moment we wint break even and will end up loosing money.

You are currently losing £140/month. It could be more if interest rates go up, which will put downwards pressure on house prices - meaning that you stand to lose more whether you keep it or sell.

As I see it, there is little immediate prospect of house prices rising and you are effectively paying £140/month to hold off a loss with no prospect of the loss reducing. So not a lot of point.

How big would your loss be and how many months of £140 does it represent?

poppy10_2

Sell up. It is much more likely that your interest payments will start to rise before house prices do. Get out while you can.

rising_from_the_ashes

Difficult without some figures ....

How much are you likely to lose by selling up? (bear in mind there will be fees as well as any shortfall in the selling price / outstanding mortgage)
How would you make up the shortfall?
When's the tenancy up for review?
Could you achieve a higher rental for it?

I would agree that unless you're breaking even at a minimum it seems fruitless to continue .....

sternjohn662200

Well the best offer we have had is loosing 3k if we sell now. Also with tenancy ending for every month we dont sell we lose £600.

We have been renting it out at 600 a month and the mortgage repayment with it on svr is £700 and we allow £40 @ month landlord fees. We probably could raise rent to 630 or 640 based on local prices.

Its a matter of cutting losses or renting it out and overpaying. I mean i could overpay by £400 @ month. Its a matter of saving deposit for next house after selling this at a loss or overpaying and saving for deposit that way.

DVardysShadow

sternjohn662200 wrote: »

Well the best offer we have had is loosing 3k if we sell now. Also with tenancy ending for every month we dont sell we lose £600.

Invest £3000 in stopping a loss of £140/month? Or put the £3000 in a savings account paying 56%? That's a hard one. But if you can't find a savings account paying that much, you have no choice really. Take the loss on the sale, not on the rent.

For £600/month, that is 240% return.

sternjohn662200

But if we lived in the house and it was a normal situation where we didnt move up north then we would be paying that amount anyway and have to live there. We dont really lose the money each month as if we lived there we would have to pay that money if you see what i mean.

The morgage repayment is £740
We rent out for £600 then rent ourselves for £600.


If we keep the mortgage and continue to save and overpay where possible then we build a deposit through house and there's a possibility of a house rise as money even minimally is coming off the amount owed to mortgage company. But if we sell then we lose £3k and rent for 2 years which doesnt pay anything off.

I just think that if we save £140 a month on selling house then its 21 months till that 3k we lost is saved back.

Where as at the moment we are loosing the oppurtunity to save £140 a month at the moment we are paying money off the mortgage aswell each month. And would have to lose £3k to save that money.

Thrugelmir

sternjohn662200 wrote: »

I just think that if we save £140 a month on selling house then its 21 months till that 3k we lost is saved back.

You are underestimating the cost of retaining the property. Over time the cost of refurbishing the property will increase.

Better to cut your losses now. Than hang on in hope.

pinkteapot

sternjohn662200 wrote: »

Basically my wifes 100% mortgage is up for renewal.

If your LTV is still 100% (or higher if in negative equity) then you won't be able to remortgage. You'll switch onto the SVR. What interest rate are you on now and what is the lender's current SVR?

How much longer does the consent to let from the mortgage company last?

originalmiscellany

For what it's worth, I'd sell up - cut your losses and accept it as a valuable lesson learnt I don't think that prices are going to increase - I think dropping prices is what'll happen for several years - so unless you are planning to be in the game for 10 + years sell up. Sorry that you're in such a tricky predicament.