In a financial pickle, can anyone advise on mtg or shared ownership. Thank you.

mkbswimstar

Hi, I am in need of advice and not just from some estate agent wanting to sell my house who will tell me the easiest option.

I am a single mother and the ex wants his name off of the mtg. He has been paid to leave and has signed away any rights to the equity.

I have 30k of unsecured debt, £158k of mtg.
I earn £12k gross from my job, and £100 per week child maint, £150 per week working tax credit. Also £134 per month child benefit.
I have discounted council tax and free prescriptions.
On a good day the house is worth £300k.

My monthly outgoings are high due to the unsecured debt that I would love to get rid of. The monthly mtg on repayment is £640 (which is a lot lower than renting the equivalent).

I am skint and am getting into worse debt.
I would love to remain in this house for the kids security but I am also aware there is a nice lot of equity that I can use to get rid of the debts.

If I sold up and rented I would be paying £1k rent a month and due to the equity from the sale of say £120k (with loans gone) in the bank, I would lose out on the WTC £600 a month and pay £80 extra a month on council tax.

If I put the money into another house, I can't see a lender offering me much of a mortgage. (I have also recently been late on a few payments on the unsecured debt) and I could only buy a one bed dive on £120k.
I have 2 children, a boy and a girl.

Could I get a mortgage for £100k? (this would buy the cheapest 3 bed house in the area).
or could I buy a shared ownership property worth more?
This way with the money tied in the house I would still get the WTC e.t.c.

I am in such a pickle and would prefer to buy something to stop the kids from the risk of moving over and over again. I also have a few pets and landlords are not keen on these.

What would you the experts advise?
I appreciate any feedback/advise.

Thank you so much.

dimbo61

Have you looked at Housing associations in your area?
If you can give a deposit and bond for damage your pets might cause Landlords may consider you!
You have so much debt and a lot of equity tied up in your home ( its a pile of bricks at the end of the day)
I would sell up and put the money in the bank.
Clear all your debts and move into rented for 12/18 months while all the debts are cleared off your file.
£12k income plus £400 a month child maintence, £134 per month child benefit and £120K deposit should buy a property you can afford.

dimbo61

£120K is 10 years rent

http://www.aspirehousing.co.uk/TemplateIndex.php

Maybe not your area but most parts of the country have housing associations

ethank

You will not get a mortgage fof 100k. A lot of your income will be not be counted.

Frankly if you sell and have over 100k left after your debts/mortgage are paid off, it would be immoral for you to take so much money in working tax credits - paid for by the British taxpayer.

dancingfairy

It might be easier to get help from someone like Stepchange or National Debtline or your local CAB for help with the debts.
In terms of getting another mortgage then I would ask an independent mortgage adviser for your best options.

df