To sell or rent out, impact on t/c?

mummytofour

Hello peeps, I live in a mortgaged property and plan to move and rent something bigger as I have two disabled children and we are in desperate need of more bedrooms to minimise distress to them.
I would like to buy but my credit rating is rubbish and I can't see me getting a new mortgage easily, my current lender no longer do mortgages.

If I sell and have some money from the sale of the house how will this impact my tax credits?

The other option is to rent this out and then rent a bigger home, how will this impact my tax credits?

I'm not a money grabber I would just like some info with the best options. Thank you :-)

Dogger69

Have you considered if anyone will rent to you, given your rubbish credit rating?

mummytofour

I'm not too worried about that at the moment but thank you for the imput :-)

leveller2911

mummytofour wrote: »

The other option is to rent this out and then rent a bigger home, how will this
impact my tax credits?

I would suggest posting this question on the Mortgages section.There are a few mortgage advisors on there who can advise you. Renting your existing house out will require consent to let from your mortgage provider which they may or may not allow.They may also put a time limit on the CTL and at the end of it if you don't decide to sell or move back in switch you over to a BTL mortgage.

You would also need to get landlords insurance,gas safe inspections etc each year and what will happen if the people renting decide not to pay the rent will you have at least 6 months payments as a safety net?. You really need to think long and hard about this as it can ope a can of worms.

I'm not a money grabber I would just like some info with the best options. Thank
you :-)

What exactly is a "money grabber"? and what level of benefits does someone need to receive before you see them as a money grabber? as opposed to someone who only receives what they deserve or entitled to.

POPPYOSCAR

Any money from the sale of the house would be invested yes?

So the investment income would need to be declared and this will reduce the amount you would get.

If you were to rent your property out, the income you receive(after deduction of expenses such as mortgage interest(not the full amount you pay) and other expenses) must also be declared and will reduce the amount you would get also.

mummytofour

I didn't want to come across as somebody who is just after as much money as I can get out of the state... But then I guess that's what I am trying to do, hmmmm....

Thanks poppy, I was just wondering if there was now a limit on saving for tax credits... I was thinking that there now was 6k limit but perhaps I'm confused.

Dogger69

mummytofour wrote: »

I didn't want to come across as somebody who is just after as much money as I can get out of the state... But then I guess that's what I am trying to do, hmmmm....

Thanks poppy, I was just wondering if there was now a limit on saving for tax credits... I was thinking that there now was 6k limit but perhaps I'm confused.

Savings may become an issue when Universal Credits are introduced in your area.

I would suggest focusing on what is best for your children, not what brings in the most benefit income. Is there a reason why your ex and the rest of your children cannot live in the house?

POPPYOSCAR

mummytofour wrote: »

I didn't want to come across as somebody who is just after as much money as I can get out of the state... But then I guess that's what I am trying to do, hmmmm....

Thanks poppy, I was just wondering if there was now a limit on saving for tax credits... I was thinking that there now was 6k limit but perhaps I'm confused.

Not as it stands at the moment.

Universal credits will eventually replace tax credits and a lot of different factors will come into play so you cannot really equate the same thing.However if you have savings over £16000 you will not be able to get universal credit.

Housing_Benefit_Officer

mummytofour wrote: »

I didn't want to come across as somebody who is just after as much money as I can get out of the state... But then I guess that's what I am trying to do, hmmmm....

Thanks poppy, I was just wondering if there was now a limit on saving for tax credits... I was thinking that there now was 6k limit but perhaps I'm confused.

You are at a crossroads - you have to look at all the different scenarios and decide which path to go down - why go down one path where you would have to sell your house lose this asset (how easy would it be for you to buy a home in the future?) and blow the capital on living - what financial position would you be in say 10 years time? If there is a way to rent out your home so the rent pays the mortgage and you are financially better off then go for it.

Once you are at the mercy of the private rented sector you could lose a rented home with just two months notice from your landlord. Do you want to give up the security of the home you own to be at the mercy of a private landlord?

I wouldn't feel guilty about wanting to know what the maximum you can get out of the state. Why impoverish yourself? You need to know what your options are before making potentially life changing decisions. It isn't just you your decisions will impact but yur children as well.

Have you approached your local social services to see if there is any funding available to modify or build an extension on your current home - just a thought.

POPPYOSCAR

If I understand it correctly you will not be able to get Universal credits if you own a property you do not live in, so something to bear in mind for the future.