Downsize for school fees

downsizeforschoolfees

Hi, I'm new!
This is what we want to do & we are looking for advice please on how to best make it happen.
Currently living in a house worth £3-400k, 80k left on great rate mortgage. Been running on empty paying school fees for 5 years. Spent all £15k of our savings. Want to downsize to a house worth £200-250k & put a lump sum away to help pay the rest of the school fees - about £100k & 6 years left.
Problem is, we have no money spare to make the house look good before we sell it!
We want to borrow ideally £20k (£10k might just do it) but mortgage company won't do it without swapping us onto a much higher rate. They also say we are living beyond our means, but obviously, we are doing this to help the situation! Where we move to will also enable me to work more hours as we will be moving to somewhere where there is more work in my business. Any ideas as to the best way to borrow? Shouldn't need it for much more than a year!

Yorkie1

I don't know the answer to your question, I'm afraid, but £20K (even £10K) just to make a house look good sounds a lot. What needs doing? Have you had EAs round to find out the realistic sale prices as it is, compared to after you spend £20K? Is there a risk of spending money where it might not actually attract more buyers? What is the selling market like in your area?

Thrugelmir

Sell the property for what it's worth now. There's no certainty from a lenders point of view as to what the released equity will be actually spent on. The new incoming rules regarding affordability have changed the rules of the game.

Idiophreak

Working on the assumption that you can't afford to service the repayments on a personal loan...I don't really understand why you'd rather have the lump sum and continue to pay *any* interest on the mortgage, rather than just clear the thing...

Then you have a bunch of money each month to pay the school fees.

Also, if you do that, what does it matter if the lender stick you on a higher rate when you take out some money - you'll be free of the thing in a year anyway.

All of this, however, hinges on the value of your property - there's quite a difference between 300k and 400k - you need to work out exactly what it's worth before you make any kind of decisions...

amnblog

Have you considered letting the property out and keeping it?

downsizeforschoolfees

Front & back door dire, lots of decorating to do & ideally a new kichen/diner knocking down an easy wall! Plus moving fees etc.
Trouble is, we live in a tiny village where only a couple of houses go onto the market per year & only the smartest ones sell!

downsizeforschoolfees

Letting is a big gamble when we will need the income to pay our own rent in another area. This also involves a school move of 20+ miles so another thing to consider.

Current mortgage is 0.5% above base rate & we will need to keep some mortgage when we movw

amnblog

So in effect you have been paying £67 a month interest on this mortgage and you have still been struggling to maintain everything?

downsizeforschoolfees

A 20% smaller house has just sold in the village for £330k, but that was done to a higher spec. I think I am right not to want to bring the estate agents around for a look until we've finished smartening it up?

downsizeforschoolfees

£3-400k may not sound like a lot & it wouldn't be in the South East, but where we are an average 3 bed semi is only £180k so we are top of the average market/bottom of the top end market for where we are

Kazza_Monkey

Hi there, I'm from the South East and believe me 300-400k would buy you a 5 bed detached house in the nicer areas where I'm from. we are paying £185k for a 3 bed semi I guess If you are looking closer to london then yes it would be a flat or something equally as tiny. Not all of us in the south east are rich in fact we get niggled by what we call DFL's (daan from Laandoners) hiking our property prices up. Anyway that aside what OP said could you not just sell with work needed doing? I'm sure it wouldnt knock your price down too horrendously.

Kaz