Downsize or remortgage?

CKhalvashi

One that I’ve given a bit of thought over the last few months, we’ve finally put the house on the market!

We were one of the people that upsized (from 3 to 6 bedrooms) on a 95% mortgage in 2006, using the equity we had accrued from 2003. A property has come up for sale in our road by the local council that has been empty for some time at £250,000, and with around £150,000 equity in our own, this seems the perfect chance to reduce massive monthly payments and possibly clear the credit card debts, whilst staying in an area of the town that we want and in the perfect position for schools for the girls. Our property is on the market for £900,000, however we are willing to go down to £850,000 (what we paid for it).

Has anyone else done something similar, and is anyone aware of anything that could be hiding (I already have the boiler/electrics sorted, should take days, with a full survey in my hands showing that a new roof is needed, but nothing too drastic) with a property that has not been occupied for some time?

We’ve already had cash buyer offer of £875k, so can’t afford to wait around at the moment!

C

Sepa74

Hi there, I'm afraid I can't offer any practical advice, except to talk to your solicitor about putting some sort of 'warranty' clause in the contract in case something does crop up within a specified period of time.

However downsizing looks like it will make such a massive difference to your financial situation, and with a buyer in hand (worth two in the bush!!), I think you're right that you need to take the plunge and just go for it.

CKhalvashi

It’s more of a case of being able to change the girls’ lives with the money we’re saving each month. We both earn 6-figure salaries, however in the world of Company Directorship, profits are never guaranteed, and when it comes to the stage of having to change a car because my old one had 291,000 miles when it went, knowing that there may not be the money there to do this over the 3 year term, I start to get a bit worried. I’ve worked hard to get the debt down (sometimes 18-20h per day, 6-7 days a week) and don’t want it to creep back up again under any circumstances!

The fact there’s a cash buyer is a huge relief, and the added bonus is that this is someone I’ve not met, however in my opinion, what’s the point in having a large house if you haven’t got the money to enjoy yourself with it.

In my opinion, the best thing to do is more than halve the mortgage term (to 10 years), whilst at the same time reducing the mortgage payments to around £2005 a month (£200,000) and paying the credit cards. If possible then pay the mortgage in full at the end of the 5 year fixed term. The extra £56,000-ish will be used to pay my own car off and replace a high-mileage car, most probably with a 2nd S-Max/Mondeo/Grand C-Max or something of the equivalent size (not recommending any particular car manufacturer here). Ex-demo, of course, not brand new!

As already stated, it’s going to be a big change, but in my own situation, the best thing is go for it. If there’s a mortgage advisor/IFA around, can you please offer some quick advice on this, knowing what is above and contacting me if there’s any more that you need.

Thank you

C