to sell or rent or stick with it

fizzysweets

We own a home that we have on the market as we are in desperate need of more space . We do have some debt that we could pay of if we sell up, but this would mean renting our next home rather than buying again. What would your opions be on this? Is it better to clear all debts and have £35k ready to buy again once we can save abit more, or keep the debt and buy somewhere or stay where we are on our interest only mortagage until our loan o £15k is paid of in 4 years time.The loan is £240 a month which is a huge strain on the finances and it would be lovely to get rid of this but im not sure if it would be madness getting off the proerty ladder to do this or not.
Thanks in advance for your opinions and any advice.

LilacPixie

Well its hard to say.. have you factored in the cost of selling?? is renting a larger home cheaper than mortgage when u consider you may have to move every 6 months? Have you mad all the cutbacks you can?

Personally i have 3 kids and i wouldn't want to rent if i could avoid it because of the having to move aspect

Standingtall

Do you have pets? I ask this as we have a cat and a dog and most rental properties do not allow pets.

fizzysweets

No pets!! Yes we have taken into account the selling costs and deposit if we rent.
Its just if we buy again we would have an interest only mortgage until the loan is cleared so mortagage would be £450 ish a month, renting would be £800 p/m but we would be saving £400 a month on debt what with the loan and cc.
We have 4 children between us and yes the idea of renting isn't great if we do end up having to move again , however being debt free would be a huge relef.
Oh just so confusing knowing what is for the best.

Standingtall

My gut instinct is to stay put and try and blitz the debt. However I am sure people with far more financial savy than me will be along with advice.

I just like the security of having my own home, my 'castle', lol. i rented for while but missed the freedome of being able to change things if I so wished - i was always conscious that the property was not mine. My ex fell out of the loft through the lounge ceiling once as well (it was a bungalow). We had the ceiling fixed but were petrified the owner would notice and keep out bond (they didn't fotunately).

Can you not post an SOA and see if people can help you cut back so that you can pay off the loan a little quicker? Or could you not cut back your current mortgage to interest only and again blitz the loan?

rising_from_the_ashes

mmmmm difficult one - to play "the devil" a couple of things to consider:

If you do decide to sell & rent - are you absolutely 100% positive that the deposit money won't be touched (something breaking down, wee treat etc etc) - not a critism - I've been there!

If going down the interest only mortgage option - have you incl setting aside money to repay the capital?

Are you positive you'll be approved for a new mortgage? (sorry had to ask)?

Aside from the deposit money - are you positive that if you rent you'll be 100% sure you'll not get into debt again and can live within what you'vegot left ... covering any emergencies etc (again, been there!)

and finally .... is it likely that you'll actually be able to shift your house? Some on my street have been on for 10 months - and they used to shift in around 3 weeks!

Standingtall

Sorry - just realised you are already on interest only. durh

~Beanie~

Well if it were me in your position, for the sake of 4 years and £240 per month, I would do everything I could to repay the current mortgage and stay where I was for the rime being. Then you can look at the situation again.

If you are already on interest only, how are you going to repay the capitsal in 4 years, would you have to sell anyway? How much profit would you make?

LilacPixie

Plus how desperate is the need to move? As your current home is on the market how long has it been on for, it the 'profit' based on selling at current asking price? Plus devils advocate again if you are 450ish on mortgage and 400 ish on debt is stretching you financially then rent of £800 will still be tight IMO. Plus the moving costs possibly every 6 months and maybe loosing some or all your deposit every 6

TBH I would be looking at economising and maybe one or you either getting a 2nd job or a another stream of income to ease the pressure and then make overpayments and go towards being debt free.