Advice on what to do next?

Norfolkbor

Hi everyone,

Looking for a bit of advice really on what to do.

A while ago I spilt up with my fiance and we had both names on the mortgage. She then signed the whole mortgage over to me and I've been paying it every month.

The house is a typical Manchester 2 up 2 down terrace and is nice enough but does need some updating really. (Bathroom and Kitchen). It's in a fairly good location and is probably worth at least what I paid for it two years ago.

Although I earn a fairly decent wage, and I'm pretty good with my money (I have a pretty detailed budget) I'm not struggling to pay the mortgage (£750pcm) but it is leaving me with little else to have any kind of social life or luxury at all. I currently have no savings and I'm concerned that should anything happen, I'll be stuffed. I've cut everything to try to give me more savings/spending money a month. I'm not really keen on getting a lodger to be honest, plus the house will need work done to it to make it acceptable to a lodger.

The advice I need is do I sell the house and buy a smaller cheaper flat - ableit in a nicer area? I like my house, but at the moment I just feel that its tying me down and I'm resenting it.

Thanks for the help.

Fire_Fox

Are you sure it will be cheaper to buy a flat, have you factored in all the costs of buying and selling, service charges, ground rent, major works? Would you consider simply renting a flat? Have you thought about matched betting for extra income/ savings (NOT gambling)? http://forums.moneysavingexpert.com/forumdisplay.php?f=41

Are you handy or are any of your friends? If so you might be able to do much of the kitchen yourself, if the units are not rotten you can just replace the doors and worktops, tiling is really quite easy. Second hand kitchens pop up all the time on eBay and the small ads. That might help the place sell for the best price, or you might decide to try to give a lodger a whirl (larger bedroom would be more attractive). Remember lodgers have few rights so if it does not work out you can ask them to leave at relatively short notice.

pmlindyloo

You need to do a bit of number crunching.

First of all, have you any equity in the property? Think about getting 3 valuations from local estate agents (factor in the possibility they may 'bump up the price' to get your custom) Check what similar properties have sold for.

Factor in estate agents fees, solicitors, surveyors, moving costs. Now if you have equity and have deducted costs have you enough for a deposit on your new place? Or are you thinking about/are you able to 'port' your morgage?

Taking everything financial into consideration you will then have a pretty good idea whether this is feasible.

Reading your post suggests that you want to 'live a little' so how about selling and renting for a while? All very hit and miss but if you are young enough to spend a few years without scrimping and saving then I would say 'go for it'.

If you don't like the idea of renting then if the finances don't add up, you either stay as you are and try to find some extra money to do the kitchen and bathroom (shouldn't cost a fortune) and get a lodger to ease the finances or get a lodger at a competitive rent and manage with the kitchen/bathroom as they are.

Norfolkbor

Thanks for the advice guys.

I'm 31 and a teacher. I'm more or less at the top of my pay scale so no real chance of a pay rise without a massive promotion. I get lots of holiday - but have no money to actually go anywhere/ do anything.

I am useless at DIY - I dont mind getting my hands dirty to save money, but I just can't do it. Well anything above painting really.

There is some equity in the house (3 odd years of paying off the mortgage). My mortgage is portable, and although I have no savings I'll have my original deposit back I guess.

Not sure about renting - its a big step backwards.

After crunching numbers I guess that a flat would save me including ground rent etc about 200ish a month.

kingstreet

Norfolkbor wrote: »

My mortgage is portable

Just to clarify, this means you can transfer the rate from the old mortgage to a new one, if you qualify for it.

Many people think they can simply transfer a mortgage from one property to another. You can't do that. You need to satisfy the lender's affordability, lending and loan to value criteria, just like you did when you bought the first property.

Fire_Fox

Guessing is not good, research land registry sold prices for the street and area for the last eighteen months or so. Don't forget you will have to pay estate agents and legal fees out of the sale price. I rather suspect that £200 a month will be eaten up in the thousands you spend buying and selling. Will you still have a 10% deposit?

That is a shame you are not any good at DIY, since you have more time in the summer. If the house is safe you could still get a lodger if you were realistic about the price, might be worth doing for a little while to get some money behind you then reassess? Another option is to apply to your lender for consent to lease and let the whole house, again it does need to be safe and have the basics like functioning heating and hot water. Obviously you would have all the obligations and responsibilities of being a landlord, it's not for everyone.

hazyjo

Can you explain what you mean by 'signed the whole mortgage over to me'.

The mortgage provider surely wouldn't have agreed for you to take on the mortgage if your salary wasn't sufficient to support it. They are extremely careful still at the moment. Is it more than say max x4 times your salary?

Jx

Norfolkbor

When I started thinking about it I checked and like you say subject to critera it is portable.

Considering that I passed the tests for having the mortgage in my own name when I was earning less it should not be a problem. Or I could just get another? I'm past the date for early penalities with my current mortgage.

Norfolkbor

hazy jo - I just about passed. I borrowed £126k and my yearly pay at the time was 37kish

kingstreet

Norfolkbor wrote: »

When I started thinking about it I checked and like you say subject to critera it is portable.

Considering that I passed the tests for having the mortgage in my own name when I was earning less it should not be a problem. Or I could just get another? I'm past the date for early penalities with my current mortgage.

Yep. Ask your current lender what it has available to you as an existing borrower moving home and study new products from new lenders. Portability really suits those who have very good rates they'd rather not lose, or face early repayment penalties if they change lenders while moving.

G_M

There are 3 options and no one can advise which is best for you:

* increases you income (lodger, evening job, holiday job, internet business, etc)
* reduce your outgoings (this site is packed full of advice)
* sell and rent (will the income from equity cover rent? - unlikely)
* sell and buy (as advised, do serious number crunching on the various costs)
* use a dating site to find a handy new girlfriend who a) moves in and contributes to bills and b) does the DIY

I'm concerned that should anything happen, I'll be stuffed.

For some of the risks (eg ill health) you can insure.