Am i crazy and/or stupid?? Help with a scenario....

lolamancity

A possibly unusual scenario that has only just occured to me, but i can't help thinking i'm missing some huge problems with this idea....

Basically, i own my own little house, with my 2 sons, aged 5 and 3 months. I bought my ex out of it years ago, and now have a mortgage of 47k left on it (fixed rate ends next month)

As it is TINY, when i found out unexpectedly, that i was pregnant last year, i put it up for sale straight away intending to take the plunge and move in with my babies father (would be his 1st mortgage, he's still living with parents) because it's too small for 2 kids to grow up in. Its valued at approx £80k. I put it up at 78k, and because of the FTB market in my area, its not sold since Oct 12... no viewings either! Houses on my street are only selling to developers when the sellers drop to below £65k in desperation. I recently dropped it to £74k and still no interest.

We have been looking for houses in a specific area up to £160k (specific area due to sons school and his dad lives nearby too) but houses that we love (of which there a very few) are vanishing quickly, while there's no point even looking seriously anyway due to my house not selling. The equity in my house is the crux of deposit on the next. Without selling this house, there is no moving - partner has only managed to save £6k in 18 months (had to pay off debt amounted when undertaking his apprenticeship) so i've been the key in all our plans so far.

However... i've been thinking about another route, but i don't know if it's viable...


Can he solely buy a house on a first time buyers mortgage rather than joint mortgage (we'd turn it joint after i sell my house) and would he need to beg/steal/borrow money off family to even get close to the deposit he'd need??

We've seen a house that needs a lot of work, but in skeleton form, is almost perfect. I am very undecided on the location...but it has got me thinking... Could, for example, he buy it for £115k but with it, bear in mind that it needs needs 40k of work...
(I can prob pay the fees involved in buying it with my savings depending on how much) What's the likely deposit he'll need? And would he be able to borrow, say £20k extra on the house to start the regenerating the property? or as much as possible (although could do with keeping his mortgage well under £600 pm as he'll need to contribute towards his sons childcare costs) FTR his wage is approx £34k a year but a lot of that is overtime. He is in line for a promotion/payrise very soon to approx £38/40k but that's obviously not on paper yet.

I suppose in the whole equation, I am irrelevant, (other than me hopefully providing the second 20k IF/when my house ever sells) - it's a scenario based on his possibilities as a first time buyer. Are our ideas above out of reach for a FTB?

Although i'm a bit nervous of leaving him to do it alone, i'm thinking it would actually be the perfect answer to the other problem i would have in that i cannot move two small children to a shell of a house/building site, so keeping my little one for now would be the perfect answer to that problem as we'd then only move in with him once the house has had it's major bits of work done... i am desperate to move as i currently share a bedroom with my 5yo which is proving tricky as he's only just stated school and we're both struggling with this set-up as we both don't have our own space, especially for sleeping, but not desperate enough to either sell my house to a business man with a huge portfolio of these houses for little to no profit after many years of blood sweat and tears on my own, or to move my kids to a building site when i suffer from manic OCD and struggle juggling life with a 3 month old baby enough already!

Any see any huge holes with my daydreams? Would appreciate other opinions!

Much thanks

Dave_Ham

Hi there,

You are off I am afraid, if I read this correctly. You can only get 95% of the lower of valuation/purchase price. Typically 90% is more commonplace and the rates are lower and from mainstream lenders.

Another option, why do you not raise finance on your property as a let to buy and then rent yours out, use deposit to add to other funds to buy a new place together??

Not everyone's dream to be a landlord, but subject to valuation and the housing market picking up; it may provide a practical solution.

All the best

lolamancity

Ahh thanks for your quick reply... i did think the deposit would be the first sticking point, seems i was right! He's said he can potentially borrow another 4k off family but i'm not happy with that idea as once we start spending on making the house into a home, i would never want to be in the position where we couldn't pay our family lenders back - and then there's the issue of needing a large amount of money to spend ON the house too to make it even remotely livable, so all in all looks a pipe dream to go down that route.

As for renting mine out... i just don't think i can be a landlord, i'm just not cut out for it, nor do i really have the time or money to put into it (tbh, the house needs a few things doing to it structurally to make it up to scratch.. this is another reason i don't want it up for sale too low, as i know i'm going to get chipped further on the price when it comes down to it) I suppose the ball is in my partners court... there's not a lot i can do to change the situation myself at the moment, especially on maternity leave!

Thanks again for your reply