Downsize for school fees

kingstreet

If this is done post 26 April, those school fees are going to be factored into affordability whether they are being paid from a lump sum or not.

This could be a major issue and prevent you getting another mortgage!

amnblog

a low blow for a Friday afternoon KS

kingstreet

I know.

I'm already MMR-proofing our new enquiries and people are getting a bit of a shock when I explain their borrowing power just dropped £10k because of their £125 per month ground rent and service charge.

We're having to assume those coming along now won't be able to reserve before 14th, as we have nothing due to be released before then.

Yorkie1

kingstreet wrote: »

I know.

I'm already MMR-proofing our new enquiries and people are getting a bit of a shock when I explain their borrowing power just dropped £10k because of their £125 per month ground rent and service charge.

We're having to assume those coming along now won't be able to reserve before 14th, as we have nothing due to be released before then.

Genuine question: even if someone reserves before 14th April, what's to stop the lenders reviewing all existing offers against their revised criteria?

kingstreet

As long as there are no major changes after 26 April the case will remain on the old basis.

If there's a change of product, increase in mortgage amount etc, it will be reviewed under the MMR rules.

That's why we are MMR-proofing our cases now.

Idiophreak

silvercar wrote: »

Not having the mortgage makes no sense if it is only costing you £67 a month.

How do you work that out?

Last time I checked, 67 > 0....

Fine, they may be able to get a little interest on the money through ISAs etc...but would it really be worth the risk when the mortgage is tracking? Not sure myself.

shortchanged_2

silvercar wrote: »

Not having the mortgage makes no sense if it is only costing you £67 a month.

If you are struggling with school fees and looking to move area, why not move to an area with decent state schools?

Second this. Sometimes people put themselves into too much cack for that special school.
Put them into a good state school and I'm sure your precious little ones will do just fine.

Facing financial ruin to pay for something you blatantly can't afford is just madness.

silvercar

Idiophreak wrote: »

How do you work that out?

Last time I checked, 67 > 0....

Fine, they may be able to get a little interest on the money through ISAs etc...but would it really be worth the risk when the mortgage is tracking? Not sure myself.

School fees are going to be ~£1000 a month per child, so in comparison £67 a month is chicken feed.

downsizeforschoolfees

We have 10 years to run on the mortgage & £80k left to pay. I don't know where the £67 per month idea came from but believe me, we are paying way more than that!

I'm not going to get into a private v state debate - that is our choice!

My calculations are roughly as follows:-
Sell at around £350k
£80k oregon mortgage
Leaves us with £270k equity
Take out £20k for moving fees, stamp duty, removals etc
Leaves us with £250k to spend on a house to be mortgage free - however we would like to keep the 0.5% above base rate deal incase (as I suspect we will) we end up choosing a house for say £270 instead of £250k.
Sound finances? I calculate that even with the slightly higher cost of school fees at the new school we could be better off by at least £650 per month!

Alternative? To find a grammar school (which would be our only state preference) we would need me to give up work (no work for me near any grammar school) & pay a much higher price for a house in a grammar school area. This would make no sense to me & I would hazard a guess that those arguing against our choice of school & area to live have a much higher mortgage to pay than we currently pay on school fees! Personal preferences!

That's all I'm asking for is advice on a short term loan until we can sell this house - surely there is some option to borrow £10k somewhere?

~Chameleon~

Credit card?


Although to be honest, it sounds as though you're living way beyond your means already.