should I sell or stay put?

gemmacots

Hello, I would be grateful for some advice as I really do not know what to do.
I currently have a mortgage of £250.000.
I could sell my property for around £400.000 (one just sold down the road with similar spec for £425.000) So I could potentially have about £150.000 cash (if it sells for that of course)
My monthly morgatge payments are £1.500 per month, and we do struggle to keep up, but somehow we do, but admitedly it is a struggle.

So my questions are:
Should I sell up and rent for a while and sit on the £150.000 making interest (and use some of it to increase my business)and when we come across a good enough property, buy it so my monthly outgoings are more affordable? (so downsize and have a tiny mortgage in comparison to what we have now?)

Or should I just keep plodding along for the next 23 years paying off the existing mortgage until it is paid off and then I will be worth £400.000? (if the market doesn't go down further of course)

Part of me just wants to sell up, rent and then buy another smaller property when I find one worth while with a mortgage of around £100.000, and the other part of me thinks I should be sensible and stay put and just pay off the mortgage until it has cleared. Even though it is a struggle but we are paying it just about.

Any suggestions welcome as I just don't know what the right thing to do is? thanks in advance.

callmechar

gemmacots wrote: »

Part of me just wants to sell up, rent and then buy another smaller property when I find one worth while with a mortgage of around £100.000, and the other part of me thinks I should be sensible and stay put and just pay off the mortgage until it has cleared. Even though it is a struggle but we are paying it just about.

Only you can decide, but it seems like you already know what you want to do :money:

gemmacots

callmechar wrote: »

Only you can decide, but it seems like you already know what you want to do :money:

Thanks for your prompt reply.
The problem is I would love to stay put but I don't want to struggle every month until I am 63! Even though we manage to pay it every month, it isn't fun. But if push came to shove we could do it.
I want to do the right thing and what makes financial sense, I would love for someone to just say, this is what you should do because you would be mad to do the other.

So if there is anyone on the forum who thinks selling would be the right thing financially (knowing the way the market is and will be in the forseable future) or the wrong thing I would love to see what they would do if in my shoes. This is a genuine plead for advice, thankyou

ognum

Everything you are writing is speculation.

First look at the rental properties available and see if there is anything you would want to rent in your budget.

Do you have children, how will you feel about moving them every time a rental comes to an end?

Put your house on the market, then you will have some idea if it will sell and for how much. Maybe you won't get what you are asking, maybe you could get more.

Understand that the money in the bank will not make a lot of money due to current interest rates.

Only you know how the housing market is where you are.

Create a plan, work out the cost of moving, whether you would get another mortgage etc. Use your head not your heart!

Hope this helps!

SuzieSue

If you would be happy to live in a house worth £250k, then there is no point in stuggling with a £250k mortgage in a house worth £400k.

For me, quality of life is more important than having a big house (I have a £250k house with no mortgage and I could easily buy a more expensive house, but I would much rather be mortgage free and stress free).

If I were you, I would put my house on the market and also look to buy a smaller property. I would only rent if you have to in order to sell your house when you can't buy. I know too many people who sold up in the mid 1990s and rented and then missed the boat when house prices rose again.

gemmacots

ognum wrote: »

Everything you are writing is speculation.

First look at the rental properties available and see if there is anything you would want to rent in your budget.

Do you have children, how will you feel about moving them every time a rental comes to an end?

Put your house on the market, then you will have some idea if it will sell and for how much. Maybe you won't get what you are asking, maybe you could get more.

Understand that the money in the bank will not make a lot of money due to current interest rates.

Only you know how the housing market is where you are.

Create a plan, work out the cost of moving, whether you would get another mortgage etc. Use your head not your heart!

Hope this helps!

Thanks, well it is and isn't speculation. We love where we live, we have children and would rather stay put if we were rolling in it, but it is tight every month. And I sometimes wonder if it is all worth it just to live in a house and place you love.

We are in the south east so properties do sell, slowly, but they sell and we are in a good sought after location. We are self employed so one month our income is up, and the next it is down.

We would probably struggle to get another mortgate as we are on a DMP, so there is that to consider, so would have to buy something with the £150.000, or pay off the creditors and then apply for a mortgage, but i wouldn't want any more than say £100.000.

So we would have to rent for about at least a couple of years until our credit score is up to scratch, or longer maybe.

My head is spinning and I really don't know what is the right thing to do.

Yorkie1

It may well take longer than a couple of years to repair your credit record.

If you have only recently paid off your DMP then you may not find a mortgage lender willing to take a risk on you so soon, particularly as you are self-employed and have variable income by all accounts.

I think you need proper financial advice about the likelihood of getting another mortgage in whatever timescale, before you make decisions based on assumptions of how it will be.

gemmacots

SuzieSue wrote: »

If you would be happy to live in a house worth £250k, then there is no point in stuggling with a £250k mortgage in a house worth £400k.

For me, quality of life is more important than having a big house (I have a £250k house with no mortgage and I could easily buy a more expensive house, but I would much rather be mortgage free and stress free).

If I were you, I would put my house on the market and also look to buy a smaller property. I would only rent if you have to in order to sell your house when you can't buy. I know too many people who sold up in the mid 1990s and rented and then missed the boat when house prices rose again.

Thanks, my problem is we would have to rent until my credit is back up again so I can apply for a mortgage as we are on a DMP so would need to use some of the cash to pay off the creditors. Even though we would have £150.000 deposit, I know they won't just give us a mortgage with a shot credit score. I am just worried that renting would be a nightmare as I have never rented before, especially with small children.

I don't want to fell well off with all that money in the bank but hating renting or waiting to buy again.

ognum

In my opinion the thing to do when your head is spinning is to write it all down, presumably you have a business plan for your work if you are self employed, now create one for your home life.

Pros and cons, income and expenditure.

Check rightmove to see the cost of renting in an area you want your kids to be in.

Costs of moving etc

Work out how much money you need each month.

How does your partner feel about it?

Write it all down tonight and then sleep on it! Not literally!

SuzieSue

gemmacots wrote: »

Thanks, well it is and isn't speculation. We love where we live, we have children and would rather stay put if we were rolling in it, but it is tight every month. And I sometimes wonder if it is all worth it just to live in a house and place you love.

We are in the south east so properties do sell, slowly, but they sell and we are in a good sought after location. We are self employed so one month our income is up, and the next it is down.

We would probably struggle to get another mortgate as we are on a DMP, so there is that to consider, so would have to buy something with the £150.000, or pay off the creditors and then apply for a mortgage, but i wouldn't want any more than say £100.000.

So we would have to rent for about at least a couple of years until our credit score is up to scratch, or longer maybe.

My head is spinning and I really don't know what is the right thing to do.

Well, the DMP changes everything.

I know it is far from ideal with children, but is there anyway you can take in a lodger? That is what a lot of people (including my parents) in the 60s and 70s. We had lodgers until I was 10 (but you have to be very careful - my parents stopped taking in lodgers after the police came looking for one of them as he was wanted for !!!!!philia!). But it was the only way my parents could make ends meet when we were young.

gemmacots

ognum wrote: »

In my opinion the thing to do when your head is spinning is to write it all down, presumably you have a business plan for your work if you are self employed, now create one for your home life.

Pros and cons, income and expenditure.

Check rightmove to see the cost of renting in an area you want your kids to be in.

Costs of moving etc

Work out how much money you need each month.

How does your partner feel about it?

Write it all down tonight and then sleep on it! Not literally!

We have both been sleeping on it for months now and still don't know what to do, one day we think we should sell and next day we think we should persevere and stay put. We both said maybe we should wait another say 5 years until our youngest has finished primary, try to pay off our creditors and then maybe try to sell.
But then I worry in case the equity we have in the property just dissappears if the market gets worse and we are still left with a large mortgage with no cash because our house has devalued if the economy gets worse! So that makes me want to sell to get my cash back, before my house devalues and I lose all the deposit I put down!