?Sell to rent

djarvis25

I would really appreciate some advice. Me and OH are debating if we should sell our house and rent a smaller house instead. This is our situation:-

Mortgage each month is £1,470 with zero equity and 19years still left-which takes us to retirement age. We have unsecured debts of £38,000 with we are paying off at £178 per month by DMP sorted by the CCCS.

We are considering renting because my husbands job is unsecure- He's already been made redundant 3 times in the last 4 years- each time the debts have mounted putting us in the current situation. If it happens again we won't cope financially.
We can save £700- 800 p/m by renting a smaller property which could go to our debts and pay them off more quickly and give us chance to build our credit rating. I do appreciate selling is not that easy at the moment.

The reason I am doubting the sell/rent idea is because I have always been told renting is a mugs game- why pay someone elses mortgage? the landlord could decide to sell, etc.
We'd love to downsize but due to no deposit and bad credit rating this isn't possible. We could sit tight and hope our finances stabilize/improve.

Any advice appreciated.

Squirrel29

Its something I've considered to be honest but just don't like the idea of paying rent through my retirement. I'd love to live in countryside and renting and using some of my £50k equity would mean I could to that!

mrsrwallace

djarvis25,
you are kind of in a similar set-up as me and my DH, he had lost his job and although he is in employment now we are both on a low income and have a mortgage. We struggled to pay the mortgage and like you debated whether things would improve financially. Like you we would have quite a few years left on our mortgage term as we had to extend it to bring our monthly payments down.

consequently we have now put house up for sale and also have negative equity and there will be a shortfall if/when we get a buyer. As for renting we are in the same situation as rental properties cost at least £200 a month less than our current mortgage so we would have more money to pay off the shortfall over time and clear the debt.

We have heard too that the rental market is "dead money" but at the end of the day you need to make a decision as to how to go forward with your life. The thing is you will have some time on your hands to come to a decision as the mortgage companies tend to be a bit more helpful in accepting lower payments but they will not do this forever and so you have to see what is best for you and your family.

The pros of renting are that you are not responsible for the maintenance of the property, something breaks the landlord has to fix it and as you say you will have surplus income to pay off your unsecured debts quicker. The only con is that the house is not yours and you may have to move more often than you would like to but in my honest opinion that is a small price to pay to be able to get your debts paid off and you can start again to get a life without debt.

It is a decision you cannot take lightly so seek help from CAB etc to get more info.

minipenny_2

Its not really dead money if you have a roof over your head and a less stressful life I think So i totally agree with poster above on a small price to pay!

I only say this as we're about to sell our house to pay of our debt and rent till we can save up again at first I was horrified at even thinking it but now I know our life will be so better off, less arguments, less penny pinching and secure in the knowledge that we no longer owe anything to anyone
We are in a different situation though. We have a good equity in our house so when we pay everything off we will still have a small amount of savings (depending on what it sells for) but even if we have no savings pot I think its still worth it for our sanity!

Englands one of the only country's to be bothered about ownership of houses. Most other places its mainly rentals.

I dont think renting is bad. Whatever work for you is the right option! Good luck with it all

moohound

Would it be worth looking at bankruptcy, people smarter and more knowledgeable than me might know.

mildredalien

Given that you are 19 years off retirement age, would you ever be looking to have a mortgage again or would you want to rent forever? In the long term, would you be able to rent a property well into your retirement without struggling financially? Even if your husband were to be made redundant and/or or struggle to find work?

Personally I don't think renting is a bad option for everyone, sometimes owning your own home just isn't possible, practical or necessary. However in retirement you would still have to pay rent rather than owning your own home and being mortgage free, which can help keep costs down when you have a reduced retirement income.

If you have a larger property than you need, could you consider taking in a lodger to help cover some of your costs and provide a steady income when your husband struggles with work? I don't know your circumstances, do you also work to provide income? Is your husband in a career he needs to stay in or could he switch to one that is more stable?

tallyhoh

If I had my life over again I would not buy a house. Although I no longer have a mortgage there is always something that needs money, the guttering needs doing & need a new boiler etc etc

[Deleted User]

Squirrel29 wrote: »

Its something I've considered to be honest but just don't like the idea of paying rent through my retirement. I'd love to live in countryside and renting and using some of my £50k equity would mean I could to that!

if you are over 45/50 do what we did and buy a park home 100yards from open countryside in a small village,our cost £45k brand new 2 bedroom fully furnished,and the bills are all ALOT less

Sparklyfairy

I have also thought about selling up & renting, so you are definitely not alone. The one thing that's stopping me & my oh is our credit rating...it would have to be checked & may deny us getting a house.

The positive points to renting have only really become clearer to my oh & I - if we did go bankrupt, we wouldn't lose our house & when you are older should you have to go into a care home, it would be free - not possible if you still owned your home...all things to consider tbh.

spamhill

I am not in the same position, in such that we are still homeowners of a small house, but we threw the towel in and took a huge hit on a 2nd property we bought at peak, rather than ride it out in the hope that the market would get better, having the constant fear that if one of us lost our job, it would be financial carnage. In the space of a week I feel like a different person as all the pressure has lifted. We are never going to be minted in our later life like we'd hoped, but we are having quality of life now (on an mse budget of course ) and have different hopes for the future.

Hope you don't mind me posting as my situation is different from yours, but I can say that choosing to sell a property at a loss now, for us, is the best emotional decision we have ever made.

pennies_from_Heaven

We have just sold our house (moved at the end of march) and now rent.
It was good for us as we luckily had equity which paid our debts, and now have a small amount of savings.
We have moved into a property that would never be affordable for us to buy, in the countryside, so i guess we are living our dream!
Our rent is slightly more than the mortgage, but with no debt we are better off as long as we budget.
For us it was the best decision we made, we love it here, and yes maybe we are at risk of being asked to move out at the whim of the landlord (hopefully not as we plan on continuing to be good tenants!) but weighing that against paying a mortgage on a house we didn't like, in a place we hated, with lots of debt, theres no contest!
Good luck in whatever you decide