What would you do? Any advice/guidance would be appreciated!

Leasem

Hi There,

I was wondering if you could offer any advice to us. I've outlined our position below.

Myself, fianc!e and my 2 yr old daughter are moving to be near my fianc!e family for my daughter to grow up with her cousins. The dilemma I have is what to do with the house we currently live in. I was gifted and have sole ownership of the property with no mortgage and neither of us have any debt. The property is worth around £55000-£65000 and the equivalent properties in the location we are moving to are for sale for around £165000. I am 30 years old, work full time on £18000 basic plus around £2000-£3000 commission with a company car for which I pay around £600 out of my tax per year. I am coming towards the end of my first year of a 3 year full time degree via distance learning for which I have a student loan for.

My fiancee works 10 hours a week for £6670 per year and we also get £984 p/a child benefit.

I went bankrupt in October 2008 and my fianc!e went bankrupt in September 2009, she also had a CCJ against her for our first property for which we defaulted just before she was made bankrupt. Our situation wasn't because of irresponsible spending - my fiancees mum tragically passed away in 2007 - we had just my income to live on as she wasn't able to go back to work for sometime and as she always handled the money, everything sort fell apart for a few years.

I don't know what would be the best thing to do:

1. Sell my property and put £50000-£60000 deposit down on a £150000 property in the new location.

2. Keep my property and rent it out (I can get perhaps £400/450 per month before tax relevant expenses) and rent in the new location where a 2/3 bed is £600/£700 per month.

3. Mortgage my current property to pay a deposit on a new one and rent out my current property.

4. Would we even get a mortgage?

If all goes to plan ill be earning at least £24000 pa to start with when I finish my degree and my fianc!e will be able to take on some more hours when our little one is in fulltime education.

We 100% have to move, staying where we are for more than another year is not an option.

Any advice you could offer would be greatly appreciated. We will also ask a professional.

Thank you in advance.

[Deleted User]

I have to be honest, not sure I'd jump through hoops to move just to be near my daughter's cousins on my gf's side. What happens if you split up.., or your daughter doesn't get on with them? Could become a nightmare situation.

I'd think this through carefully.

Are u wondering whether to sell the house you have or rent it? Selling would be simpler.

pyueck

Sell the property and get a mortgage. You will not be able to borrow enough to buy the house and not sell your existing one.

Renting your new one and renting out old one makes no sense from a fees or tax perspective, unless it is a very short term thing.

The repayments on your low income is I suspect likely to be a stretch. Try to budget your spending money with the mortgage and assess if feasible.

Leasem

Thank you pyueck and deannatrois. I should of added we've been together 11 years and we don't live in a good area with regards to schools and no where safe for our daughter to play. We have no friends that have children to do things with or go places with children around her age so she is on her own a lot. My daughter and fianc!e are often on there own and the move will mean they both will have company.

TBagpuss

What about your job? can you do that from the new location, or are you planning to get a new job after/before you move.

I agree that selling the house and buying a new one is likely to be the best option. I would suggest speaking to a mortgage advisor about youi mortgage prospects - given that you have both been bankrupt you find it more difficult than average to get a mortgage, but on the plus side you will have a reasonable deposit.

Renting initially and then buying may be sensible as it will allow you to get to know the new area better before you buy, give you time to save (and perhaps for your fiance to increase her earnings) and to put some more time between you and the bankruptcies.

Leasem

We both work out of our area (not much work here) and are able to keep our current jobs.

I briefly spoke with a whole of market mortgage broker who said that we are likely to get a mortgage with the deposit.

We too think its sensible to rent initially and agree that more time between the bankruptcies will also benefit us. As soon as my fianc!e can take on more hours she will but its more than likely going to be when our daughter is in full-time school - a couple of years yet.

Thank you TBagpuss!