Moving house dilemma -please help

Hunter80

Hello

My wife and I are in a real predicament. We live in a 3 bed terrace town house and now have 2 children. We are starting to push the limits of the house in terms of size and are keen to move to a 4 bed.

Our house is worth roughly 185000 with a mortgage owing of 167000. We did have a lot more equity years ago but the recession has eaten into this. The houses we are hoping for are around 270 to 280k. Because of our lack of deposit (no savings due to children) we are not able to even consider mortgages it would seem.

I earn 70k and my wife 10k (part time).

Th annoying part to this is that at some point in the future we stad to inherit around 100k.

Has anyone any ideas? It's frustrating as we need to move now but can't even though we earn decent amounts and stand to inherit a large sum later. I wasn't sure if new builds or alike were offering something for our situation?

GMS

Hunter80 wrote: »

Hello

My wife and I are in a real predicament. We live in a 3 bed terrace town house and now have 2 children. We are starting to push the limits of the house in terms of size and are keen to move to a 4 bed.

Our house is worth roughly 185000 with a mortgage owing of 167000. We did have a lot more equity years ago but the recession has eaten into this. The houses we are hoping for are around 270 to 280k. Because of our lack of deposit (no savings due to children) we are not able to even consider mortgages it would seem.

I earn 70k and my wife 10k (part time).

Th annoying part to this is that at some point in the future we stad to inherit around 100k.

Has anyone any ideas? It's frustrating as we need to move now but can't even though we earn decent amounts and stand to inherit a large sum later. I wasn't sure if new builds or alike were offering something for our situation?

There is a 100% mortgage scheme which requires a 25% equity charge on a close family members property. Something which needs careful consideration from all parties though.

Basically you would borrow 100% of purchase price with 25% of the purchase price being secured on the relatives property. The charge can be paid off as and when you choose, when equity in the purchased property reaches 25% or at a set date regardless of LTV.

Not a perfect solution but it is a possible avenue to look at assuming a relative could put up the property as security.

Have a chat with a broker if it sounds like a possibility.

arby

adding 100k to your mortgage would seriously increase your monthly outgoings. if you think that's manageable for you why aren't you saving that money now? you state that you can't save due to kids, how are you planning on paying interest on the extra debt? I understand that the inheritance issue can be frustrating, however i would seriously advise you to ignore it for a number of reasons, firstly that it won't do you any good, but more importantly, that it's not guaranteed; I've seen late changes of wills and in particular nursing costs eat through way more than 100k in a short space of time.

Could your wife increase her working hours (without childcare costs increasing too much?). What sacrifices can you make to enable you to save each month?

Thrugelmir

Why are you unable to save?

If you can afford a larger mortgage then you should be able to.

Suggest you start by overpaying your current mortgage by whatever you afford. Also review your outgoings to see where savings can be made.

chilli_red

GMS wrote: »

There is a 100% mortgage scheme which requires a 25% equity charge on a close family members property. Something which needs careful consideration from all parties though.

Basically you would borrow 100% of purchase price with 25% of the purchase price being secured on the relatives property. The charge can be paid off as and when you choose, when equity in the purchased property reaches 25% or at a set date regardless of LTV.

Not a perfect solution but it is a possible avenue to look at assuming a relative could put up the property as security.

Have a chat with a broker if it sounds like a possibility.

Hi GMS,

Is the best bet to finder a broker to deal with this sort of thing or can it be done through a bank. We have saved about 7% deposit for a house we love and my mum has offered to do this for us but I dont know where to start.

Thanks in advance J x

GMS

chilli_red wrote: »

Hi GMS,

Is the best bet to finder a broker to deal with this sort of thing or can it be done through a bank. We have saved about 7% deposit for a house we love and my mum has offered to do this for us but I dont know where to start.

Thanks in advance J x

I would suggest a broker. Some schemes are accessible via brokers only so couldn't go direct.

Plenty of potential pitfalls to be looked at too. Not something to be taken lightly by all involved.

Hunter80

Thanks. We can save going forward. We ave about £600 spare per month but although you are right about overpaying, it would take many years to achieve what you say and give us sufficient equity to move. This is my frustration in the sense that cash isn't the issue but equity is but I just wanted to explore options to see if there is any way we can move sooner rather than later.

chilli_red

Thank you for the information, I will look for a broker in Manchester or can I appoint one out of area so to speak?

It was my mum who suggested this to me so hopefully she has looked into this J x

GMS

Your Mum would need to seek Independent Legal Advice as part of the application anyway.

Where you choose your broker is up to you. The further away you will not get face to face. However many people prefer to deal over the phone so up to you.

rising_from_the_ashes

Hunter80 wrote: »

My wife and I are in a real predicament. We live in a 3 bed terrace town house and now have 2 children. We are starting to push the limits of the house in terms of size and are keen to move to a 4 bed.

Not really ..... I was speaking to one of my neighbours a while ago (1 bed flats) and her and her husband brought up their 6 children in that flat..... If each child & your/DW have a room, then you're not overcrowded.

Yes, it might be nice to have more space but it's not essential and IMHO not worth stretching finances for - much better to stay put where you are until you can save some money for a deposit.

If you can't save money now (due to the kids) - how are you going to afford a bigger mortgage?

Hunter80 wrote: »

Th annoying part to this is that at some point in the future we stad to inherit around 100k.

Think this could maybe be better phrased ..... certainly not annoying for whoever you stand to inherit it from!

Thrugelmir

Hunter80 wrote: »

Thanks. We can save going forward. We ave about £600 spare per month but although you are right about overpaying, it would take many years to achieve what you say and give us sufficient equity to move. This is my frustration in the sense that cash isn't the issue but equity is but I just wanted to explore options to see if there is any way we can move sooner rather than later.

Reducing your debt is the issue. If moving house is a priority then make sacrifices.

Unfortunately house price inflation is no longer inflating debt away.