Should we sell our house and rent??

floozy44

a friend of mine went bankrupt and lost her house (she worked ridiculous hours to try and keep her business afloat beforehand) and she hated the thought of renting..... but once she had done it, it was fine. For the first time in a very long time she looks happy, shes moved a few times and the properties have all been lovely. Its true in this country we are all obsessed with owning property-but in other countries not so much. Its just stuff. My friend feels like the weight of the world has been lifted off her shoulders.
Big hugs

fastnet

Thank you for your comments. It's really interesting to hear other viewpoints as it's so easy to blinkered. The situation your parents were in is exactly what I am desperate to avoid. We have limped on for years, not making any impact in the debt, especially when the children were young and our childcare costs were enormous. We have hung onto the house through some difficult situations, but it feels a lot easier to jump rather than be pushed.

You are absolutely right about our view of home on ownership. God knows we have not made good financial decisions but maybe the house can serve a purpose and be our lottery ticket out of a long term situation.

We have lived to a very tight budget for years and years now with no credit, it is our norm now and we have learned some very hard lessons. We have had to sacrifice lots of things over the years because of our self made financial mess, maybe selling our home will be another sacrifice but one that can give us as chance of a fresh start.

Debt free and with our salaries we could one day own a house again if we chose to.

I have two more agents coming out to value the property and then I think we will make our decision. It all feels a, lot clearer now.

Thanks to everyone for your time.

Fastnet. X x

Happier_Me

Hi

This is a tough decision and lots of people are giving the thumbs up for a house sale. I am not against this approach but you both have a good income and it would be sensible to rule out with absolute certainty staying put and digging your way out of the debt you have before you commit to such a big change.

Your household income is exactly the same as mine and our children are similar ages. We service a car debt at £436 per month and are currently paying £2500 per month in mortgage repayments. Our aim is to be mortgage free towards the end of 2016. We have £70k to go. 18 months ago we owed £134k.

You have mentioned your DMP payments are £330 per month and your mortgage is interest only so my immediate thoughts considering how much debt repayments (inc our mortgage) we make with a similar income is: where does your money go? What other financial commitments do you have that means you can't significantly increase your repayments? And are these essentials? Paying off debt with equity is still paying off debt with your money - it may be less painful short term but there are quite a few negatives to this option as you've pointed out and you essentially are paying someone else's mortgage when you rent.

Paying off such a large sum is doable given your income levels and assuming you have no unusual and unavoidable expenses. Another option would be to start saving outside the DMP and consider F &F offers to each creditor as you save enough - not sure if you could do this but if the remaining creditors receive more of the monthly payment as the debt reduces they will ultimately benefit from this.

And finally, if you decide to stay I would try to create a room for your daughter when the time comes for a little more privacy. Someone has mentioned plaster boarding off a bedroom. Or if you have a small dining room, use this as a bedroom. This could be a temporary solution until you have resolved your debt situation, at which point you may well be in a position to purchase a bigger house with the help of the equity you haven't used to pay off your debt.

Good luck.

cmcavon

We were in a similar position 18 months ago with the space issue. We have debts and knew we couldn't get another mortgage. Like you we have two children, a boy and a girl now aged 7 and 4 who were sharing a room. Eventually we decided to rent our house out and rent somewhere else. In a lot of ways its the best thing we ever did!

Yes there are pitfalls of renting, however there are benefits! Our roof blew off last week! Not our problem, quick call to landlord and no need to find the £850 it cost to repair it. Luckily the house we own was fine, phew!

I know your situation is different as we are still home owners but with your incomes you should soon build up a deposit should you wish to buy again. The position you're in now can't be easy! Imagine how you will feel with debts paid off, kids having their own space, and the knowledge that you can save for a deposit and start again.

In my opinion being a homeowner is not the be all and end all, especially with £100k worth of debts.

Hope you find the solution that's right for you.

Growurown

I regret selling our house and going into rented. However we are older than you and your husband, so very unlikely to get anyone to give us a mortgage now, ten years off retirement. If we had stuck it out we would have finished paying for our house by now.

It does sound as though in your circumstances that selling is the better option. You have time to buy another house and you earn good money between you. I'm a little perplexed as to why your DMP payment is so low. We earn less than you between us, run a car each but we are paying over a £1100 a month on our plan. Granted we don't have children at home though. Could you post a SOA and maybe we can find you some savings.

hettiecarro

Hi - My partner and I regularly have this discussion. He is very reluctant to sell our home, and I am anxious to do so. Slightly different circumstances as we are in our early 60's therefore renting would be a permanent option (unless someone will give a mortgage to a pair of octogenarians!!! :rotfl:
But seriously, as has been said earlier, we are totally obsessed in this country with owning our own property. The reality is that very few of us are in a position to pay off mortgages early and therefore we are effectively renting, albeit from a mortgage lender. I personally think it is too simplistic to say that renting is paying someone else's mortgage for them. A responsible landlord (not the dreaded cowboys we all have anecdotal evidence of), has to ensure the safety and functionality of the property is top notch, which as has been previously stated can run into hundreds if not thousands of pounds if structural repairs, boiler replacements etc need to be undertaken.
With £100k of debt hanging over you when will you realistically finish paying for your house?
As far as friends etc are concerned, I understand the 'pride' thing that comes into play - BUT the saying that pride comes before a fall is very true, and reading between the lines you are suffering some anxiety due to these debts.
It is a relatively recent 'norm' that we have to buy a house, and todays youngsters are more and more likely to rent. Not necessarily because of the mortgage lenders, but because there is not THAT much more security in owning than in renting. I also believe that over the next while we will see a shift in the legislation regarding the tenure of a rental. It is unrealistic the way Britain's economy is going, to have a situation where millions can be evicted with only two months notice and no reason given. I think it is important to rent a property that has been either built, or acquired for the specific purpose of renting, and not one that an amateur is renting out until there is an upturn in the housing market.
The property we live in at the moment will need substantial work done over the next 10 years - and to be honest I would rather it were someone else's problem.
Your home is NOT about where it is, or how much it's worth - you make your home your own wherever you are - rented or owned, and I am sure with the situation you find yourselves in with the children, moving to a more suitable property with no debt and all the lessons you have learned over the recent years, you and your family can be more happy. If you really feel you have to save face with your friends etc then simply say your house is too small, you don't want to invest any more in it, and you are going to rent for the foreseeable future until you decide what type of property you want.
This post has gone on a bit, but whatever you decide, do it for the right reasons - and the wellbeing and health of both your children and yourselves should, in my opinion play an important role in your decision making.
Good luck with it all.:)

fastnet

Wow what fantastic replies, what a lovely online community. Thanks to everyone who replied, it is so nice to have a conversation about our situation openly as we would never do it face to face with friends.

Hetticaro thanks for your views, it is certainly a way of thinking that I have come round to ie we are just renting from the mortgage company. I have been through a lot over the last few years for various reasons and I completely agree that your home is were you make it and that renting can work with the right property and landlord. It doesn't have to be a nightmare.

Thanks again everyone.
Fastener x

chevalier

On a slightly different tack, have you looked at the snowball calculator? Put in the repayments you are doing now to the DMP and then up the payments and see what the difference in running time would be. I would say you have about 4 years before sharing with her brother will REALLY be an issue as regards your daughter.

Or as others have said you could save for full and final offers for those long term debts.

Indeed you could ask the DMP company to ask for full and final offers from all your creditors to see what they say. You many find that how much it would take to pay off the debt is way less than 100k....
chev

dktreesea

Growurown wrote: »

I regret selling our house and going into rented. However we are older than you and your husband, so very unlikely to get anyone to give us a mortgage now, ten years off retirement. If we had stuck it out we would have finished paying for our house by now.

It does sound as though in your circumstances that selling is the better option. You have time to buy another house and you earn good money between you. I'm a little perplexed as to why your DMP payment is so low. We earn less than you between us, run a car each but we are paying over a £1100 a month on our plan. Granted we don't have children at home though. Could you post a SOA and maybe we can find you some savings.

I can say I know just how you feel. I regret not owning a house, but the one we had wouldn't have been the one I wanted to retire in, and selling it meant we could change countries, something I would not have been able to do were it not for selling the house.

I too am not 20 years off retirement either, so it would be much harder to buy again, even with a deposit. Well, to buy somewhere suitable around here at least.

OP, you and your partner are only in your early 40s, and have good incomes. Renting wouldn't be forever. But one thing - make sure you keep your personal possessions pared down and don't end up having to waste money on storage fees like we did. Sometimes I think back to those years, and realise if we hadn't kept any of the stuff and had just let it go, I would have saved at least £8,000 in storage fees over the years. Moving from rented property to rented property is expensive enough, without having additional costs due to having accumulated too much stuff.

Prothet_of_Doom

So Your JOINT income after tax is 62K.

In my humble oppinion, most people can and do live on much less than half that. Which suggests to me that you have a spare 2K a month for debt repayment.

So given that house prices are rising, I think that you should think very carefully before selling up.