I need to Sell up what to do with proceeds?

Noggin_1

I was wondering if any of you lovely people have some advice?

I live alone with my young son, I have a mortgage and some equity. I don't really like where I live. I constantly have to spend money on the house and I only bought it so me and my (then) partner could live together, be near his family and start our own family. We split but he lives in his own place nearby and helps care for his son, no problem there. However, I have found myself out of work and unless I find some I won't be able to pay my mortgage. Proceeds from property sale will be £45k


Do I sell up?

I can't buy a new house without any income. I would have a tidy sum to invest but I really don't want to use this money on rent. Housing benefit will only give my £40 toward my £440 a month mortgage. If I was to rent a place I would have to use my proceeds on rent, as it would be classed as savings over £16k.

Should I rent my place out?

I could get £600pcm for my house but then I still have to find somewhere to live. I could rent a nice place for the same amount and have a little extra in my pocket. Would the DSS pay for the rent on my new place while I am out of work? I would also still have to maintain my house and pay mortgage while its unoccupied.

Would I be able to invest my proceeds into a shared ownership property?

If I sold my place could I invest my £45k in a shared ownership house without a mortgage? No mortgage to pay, nice newbuild house, would DSS pay the rent if I'm not working?

I really don't know what to do. Does anyone have any ideas? I think the best investment is definately property.
Has anyone else been in a similar situation?

Looking forward to hearing from you x

sandsni

It's unlikely you would qualify for HB on a rented house while you own and let out another property. Also you would have to declare the rent as income to HMRC (only the interest portion of the mortgage would be tax-deductable) and any benefits people.

Letting property is no longer the easy option it once was. There are a lot more requirements and responsibilities for LLs (and rightly so). And the things you might turn a "blind eye" to in your own home may not be acceptable to tenants (skirting boards needing a lick of paint, chip in the bathtub enamel, all that kind of stuff), so the cost of maintaining, repairing and sprucing up would also have to come out of the rent.
Does your son's father pay child maintenance? Would he be willing to help a bit more to keep a roof over his son's head?

iammumtoone

How old is your son? Are you now claiming benefits JSA or IS depending on his age. You can also claim child tax credits. You can claim for help with the mortgage (interest only) after a while, sorry I don't know how long you need to wait but its not as long as it used to be.

This should help you in the meantime whilst you look for work.

Noggin_1

Thank you both for getting in touch.
My heart wants to get rid of the property but my head says keep it as an investment.
I don't really think I could cope with renting it out, maintenance, mortgage payments when unoccupied ect.

My son is a year old. His dad earns 2 wages but I am still waiting for CSA to sort this out, another story! But he helps out with a bit of money, but it doesn't cover all of the mortgage. He owns and shares a house with his brother, 3 wages going in to their house.

I recently started a claim for JSA after my contract ended last month. I was advised to go on Income Support and this is now being processed. Child Tax Credits claim is also being processed, taking a long time! Housing Benefit will only pay the interest on my mortgage after 12 weeks and this is only £40 per month.


Once the house is sold I want to re-invest the proceeds rather than paying rent and it going in someone elses pocket.

I have applied for a few jobs but heard nothing yet.
My work situation has been unsteady for a while, all I ever seem to get is contracts these days. I have always paid the mortgage and until now I have been solvent, I don't like the thought of ever going into debt and I'm doing what I can to avoid it.

I am having some work done in my kitchen (saved up for this) this week and then the house is good to go. I have looked into shared ownership but I need to sell up first to have the deposit. Not sure if I need a job to apply for this type of house. I won't have a mortgage on it but will I need an income to pay the rent on it? I just don't know!!

iammumtoone

£40 a month interest! you must have a very low mortgage (lucky you) yes you do have to pay the capital but that should be possible out of your benefits as a stop gap (especially as your mortgage is that low)

Personally I would put the thinking about what to do with the house until you have managed to find work again, you will then have more of an idea of what your options are, the wage that you will be earning may determine which way is best for you to go.

My sons father does not cover my mortgage either I have to pay the capital out of my benefits. Do you know what your ex earns you can Google a child maintenance calculator and it will tell you how much he should pay, you can then compare that with what he does give. Try showing him the calculation he may agree to give you that amount (maybe he already thinks what he is giving you is fair?)

cattie

Is there any reason why you can't take in a lodger to help with the mortgage payments until you get on your feet?

With a child to consider, I certainly wouldn't be thinking of selling up to go into rented. Plus you are thinking of shared ownership without knowing if you would even qualify.

I think any housing association would expect you to be working when you apply so they could see that you could afford the rent & any associated service charges plus your living costs.

I think you are wrong to be thinking of your house as an investment, rather, you need to look upon it as a home for you & your son. As long as you own the home & make the mortgage payments, you should have equity sitting there should you ever need it.

Noggin_1

Mortgage is £440 so I guess I am lucky but get no help from DWP to help pay for it. It frustrates me because if I was renting it would be paid for me but us homeowners get very little help.
I know what my son's dad earns but because he has 2 incomes paid separately on different dates the CSA find it very confusing and have messed it up. Last month I received £90, it should have been 4 times that amount. He gave me the remainder in cash. They mess me about and mess him about too, earns the same amount each month but they still find it hard to process and I'm getting fed up of phoning them!

I am never usually out of work for long but childcare takes up a big chunk of my income and I have to pay a month in advance for it.

I can't get help from my mortgage lender. Technically I shouldn't even live here. I have a buy-to-let mortgage and should have tenants. But being a contractor it was the only type of mortgage available to me. This is why I can't access the equity-I need proof of tenants.

Oh what a mess !!

iammumtoone

If your mortgage is £440 per month than you should get more than £40 towards the interest that does not seem right. However if it is a buy-to-let mortgage this might be where the problem is? Speak to citizens advise. This might help for you to see what you would be entitled to.

http://www.turn2us.org.uk/benefits_search.aspx

Noggin_1

I looked into this last time when I was out of work and pregnant, that's how I know it would only be £40. I used all of my savings to pay the mortgage because no one would employ me and my son's dad wasn't very helpful. He pays half of his mortgage and lived with me for a while but wouldn't commit to being a family unit. He couldn't see why he had to pay me and his brothers bills and the brother won! So rather than contributing to keep a roof over his newborns head he would rather pay his brother who I might add is only his step brother. This is by the by now and I have accepted it but he remains a big part of our son's life which I'm okay with.
I'm not happy living here and ideally I need to move on.