Property Ladder or Debt Free?

Meffontour · 26 March 2012 at 12:38PM

Hi, I could do with some real help!

I currently have a 95% mortgage for a house I bought with my ex nearly 5 years ago. The mortgage is up for renewal in 6 months and I would like to take his name off (as was agreed between us), but to do so I would need to remortgage, and I'm not sure that I'll be given one as was based on 2 incomes. My new partner has an extremely poor credit file and I don't know whether they would touch him with a barge pole!!!!

I also have quite a large amount of debt (about £9k!). If I sold my house it would pay for selling fees and all debt (£15k profit from house sale), but obviously I would then need to rent instead!

Is it better for me to keep my house, knowing that it will never be worth more than it is now OR shall I sell it now, get debt free and then save again. I am in my mid-30s and would like to settle down with kids soon, but see this as an impossible task with the money situation the way it is! Any advice would be grateful. Thanks

Niv · 26 March 2012 at 12:47PM

Meffontour wrote: »

Is it better for me to keep my house, knowing that it will never be worth more than it is now OR shall I sell it now, get debt free and then save again. I am in my mid-30s and would like to settle down with kids soon, but see this as an impossible task with the money situation the way it is! Any advice would be grateful. Thanks

If you have to remove the ex's name from the mortgage and you are unlikely to get a mortgage in your own name, the question answers itself.

If I were your ex I would be pushing for my name to be removed so unless you can get a mortgage on your own, I think you will be selling up.

Niv

choclover · 26 March 2012 at 2:48PM

Tricky - your rent might end up costing you more a month than your mortgage.

princess*daisy · 26 March 2012 at 4:15PM

I agree it is vital that ex-partner's name is removed from mortgage for both of your sakes.

My feeling is that it would be better to clear the debts - at present, it is unlikely you would get a mortgage based on your change in circumstances and even if you did, you would pay through the nose for the rates (I know this because my deal has recently ended and the rates for over 75% LTV were pretty poor

)

If you paid off the debts, you would be in a better financial position overall and free from any ties to your ex. You would be able to start afresh and would have approx £6k to put towards a deposit on a new home. If you could rent as cheaply as possible or even houseshare, you could look at saving towards your deposit. JUST DON'T BUILD UP ANY MORE DEBTS - ditch the CCs and loans for good!

Posting your SOA might help, then people could advise on where you could cut back to help you save more money towards your deposit.

Good luck

downsizer3 · 26 March 2012 at 4:24PM

Will you sell your house OK - how quickly are things moving? My point is - will you get what you want for it?
If so - personally I'd sell up and rent. Again - I'd check local availablity and prices first. How do your monthly income and outgoings look with the rental prices ( and no debt repayments).
I'd be wanting your ex off the mortgage ASAP and its up for renewal anyway - sounds like you may not have a choice if you can't afford a mortgage anyway.

Meffontour · 26 March 2012 at 4:48PM

Thanks everyone for the advice. My mortgage at the mo is just over £1,000 a month (bought at the peak 5 years ago at 5.89%) and renting will be around £850 per month in my area.

Thinking selling might just have to be the way forward!

Meffontour · 27 March 2012 at 9:26AM

[QUOTE
Posting your SOA might help, then people could advise on where you could cut back to help you save more money towards your deposit.[/QUOTE]

Can someone tell me what SOA stands for please? Thanks