Anyone stuck in a house they can't really afford?

walletmoths

Hi. I was just wondering if there are others out there that are stuck in a house they can't really afford, but no bank will allow you to move cheaper?

We're in that situation. We're paying interest only on our mortgage, and could afford a house at half the price, much closer to work, closer to family (for childcare help) and we'd be TONS better off. But, because of debts and defaults, and the fact that there's only one wage coming in thesedays - nobody will touch us.

Working with Christians Against Poverty with our situation has helped no-end, and we're making ends meet - but it does turn out that selling up to rent would leave us much, much worse off than we are now. So we're pretty darn stuck.

Madness isn't it?

I was wondering - if you are in this situation too - what are your plans?

haras_nosirrah

Sounds like you need to sell up and rent in this alternative area

If you have enough equity to put down another deposit and pay fees for new house do you have enough to clear your debts and start again in rented

You can then save up your income as you would be debt free and have lower travel and childcare and then when your credit file is clear you can buy again

[Deleted User]

The OP has already said renting would be much more expensive. And it sounds like they might have problems with credit checks possibly

kinger101

If you have a spare room, you might consider getting a lodger. You can get up to £4,250 (£7,500 from April 2016) rent tax free.

haras_nosirrah

The physical rent may cost more than the mortgage but if the move means they can clear their debt, have no maintenance to pay, less childcare as closer to family, cheaper travel costs then it may still work out better to move and rent

The alternative is to stay where they are and struggle even more when the rates start rising

This may have the knock on effect of people rushing to put houses on the market which will depress the value

Monthly rent vs monthly mortgage isn't the only cost to consider

selloptape

sounds like times have been tough, sorry to hear that. Don't know if it will help with your situation but I was wondering about renting out my house to tenants and then renting a smaller place for myself to ease the pressure a bit. This is a long term plan, when/if my son moves out in a few years.

Good luck - hope you find a solution. X

Pixie5740

It's not really madness. You have a history (for whatever reason) of borrowing money and not making the repayments on time (hence the defaults) so it's not surprising that no lenders will touch you. It actually makes sense.

You have an interest only mortgage. Do you have any repayment vehicle in place for repaying the capital at the end of your mortgage term? If not you might be better off selling, repaying your debts and starting again. It's not as straightforward as saying rent costs more than interest only mortgage payments.

bigfreddiel

Sell and buy something you CAN afford

fj

getmore4less

bigfreddiel wrote: »

Sell and buy something you CAN afford

fj

As they still need a mortgage that means nothing is affordable no one will lend.

getmore4less

Even if someone would lend it would be on a repayemnt basis.

can't afford interest only unlikely to be able to afford repayment unlesss a much smaller amount.


What do the rent to rent numbers look like?

If houses are cheaper where you want to move to rents should be cheaer as well.

walletmoths

Hi everyone.

Wow - so much advice on here, thank you so much

The plan we've got at the moment is to do our level best to get hubby a job once the kids have started school next week. Unfortunatley, there are limitations as it has to be during school hours, during term time - but I've asked on here for people's ideas, and there are loads too, which is great. I'm so glad I joined this forum.

6 months ago, we went through hell when we sold this house and looked for a rental. Our buyer then dropped out, but it wasn't a pleasant experience, so when we hooked up with CAP, we worked out an alternative plan (above).

I asked if we could change our mortgage to 'buy to let' as we'd be able to rent a cheaper place an make a profit on this place. The banks said "no chance".

Rental agencies treated us like common criminals because we'd got a poor credit rating - even though we could stump up 6 months rent in advance.

Because of this, we couldn't look at most properties.

When we did find rentals, we were literally queuing outside to view as they were so much in demand.

We needed a rental within walking distance of a primary school (as we can't afford a second car) and these were way out of our price range.

The contents and car insurances were triple in the rental areas we looked in - as there was no off road parking and the areas weren't particularly 'desirable'.

Because we've got boy-girl twins, we were forced to rent 3 bed houses - but could only afford a 2 bed house. 3 beds were VERY difficult to find, and of course had queuing potential residents when we did get there.

A lot of rentals wouldn't entertain the idea of young kids in the house.

In the end, we did find a place. It was quite a long walk to the school, but possible without having to pay bus fares (the stop was a long way, anyway). It was a fair distance from any relatives, so the immediate help we wanted wasn't as good as it could have been. But, even though we lost it anyway - the owner turned around at the last minute and decided that they didn't want kids in the house after all. So that was that.

I can't begin to tell you how stressful it was. And, on top of that, because we were driving to places 40miles from here, we spent so much money on fuel that we got even further into debt. So much so, that we would have had to borrow money to pay the holding fees and deposit for a rental. Plus, after 20 years of mortgages, it was such a huge emotional wrench to have paid for so long, and to see it all disappear as if it had never happened. Hubby especially became so depressed and withdrawn. My CAPmoney leader talked it over we me, and we both knew that if we carried on like this it would have destroyed our marriage.

Our plan now is to get hubby a job, pay off our debts properly, and in 6 years time - when our credit rating is better - do our level best to move to a much cheaper place. Even if we are earning more, I'd rather live in a cheap house that we can actually afford if things went pear shaped again. The worry of course is if the job doesn't happen or if the interest rate goes up

It's still stressful of course. There's no easy answer.