Help- should I sell to rent?

Mrssweetbell

Hi all,

Hoping you can help or give some advice as I'm unsure what is the best thing to do at the minute.

We currently own a 2 bedroom terrace house which we bought in 2006 for £89,000. This is now worth £75,000 (to sell- I've had estate agents round and next door has just sold for £75,000 too) and we owe £73,500 on the mortgage. Our main end goal is to buy a larger, family home and we have £10,000 saved separately to go towards that. At the end of last year I started the process of remortgaging our house (we have an NRAM together mortgage so are stuck on their SVR of 4.79%) they valued the house at £60,000 so we couldn't remortgage.

We have a good disposable income and already overpay our mortgage. We could overpay by around £500 a month.

Recently we've toyed with the idea of selling the house to break even and moving into rented accommodation in the city centre that we work in, meaning we'd save time and cost of parking / petrol (around £200 a month) there are two of us so driving is cheaper than the train / bus.

My question is, and sorry if this is rambling! Which is the best thing to do? Stay in this house and risk the value falling lower and keep paying to maintain it or move to rented accommodation and save a deposit for the next house? (The outgoing a for both work out roughly the same, apart from we would be paying off someone else's mortgage in the rented property)

Thanks in advance!

Pixie5740

I'd sell it and get rid of the NRAM mortgage. You have some equity at the moment and whilst no one can say for sure whether the value of your home will go up or down, it looks like (in my crystal ball ) the value of this property is on a downward spiral. If you are looking to buy somewhere else you don't want to get lumbered with negative equity.

TBagpuss

I think this depends.

- Do you think hat the hosue is likely to fall further in value?
- How much would you pay in rent compared with your curent mortgage?
- Could you use the £10,000 savings to reduce the mortgage to the point where you could remortage at a better rate?
- How soon do you want to buy a larger property?

If you think that property values are going to continue to fall then it would be sensible to cut your losses and sell, and then save as hard as you can to rebuild a deposit.

If renting would be chaper or the same cost as paying a mortage, and you think the calue of the hosue is going to fall or stay at the same level, it may make sense to sell.

How much of your current monthly mortgage payment is capital and how much is interest? Because it is only the capital element which is paying of your mortage, the interest is no diferent to paying rent.

In your position, unless you think hat prices are goingto start to rise, i personally would probably sell and then save hard - from what you say, if you sold, you could then save £700 a month which added to your exisiting £10,000 should allow you to build a deposit fairly quickly.

Mrssweetbell

Thanks for the replies guys!

- I am unsure about the house value, I'd say there is a 50/50 chance it could fall or rise. I can't see it rising to what we paid for anytime soon though!

- we currently pay £550 mortgage and rent would be around £800. But renting in the city would mean we'd save the petrol and parking money.

- we could do that but I'm scared to sink that into this house in case the value does fall. I feel like that £10,000 is our lifeline to get out of here!

-the capital of our mortgage goes down around £230 a month at the minute

I should also probably say that we bought this house way too young (19) and its in a fairly rubbish area. I feel like we missed out a bit by being sensible and buying (we thought) and not living in town! We plan to have children in the next two years when we get the bigger house.

Guest101

Mrssweetbell wrote: »

Thanks for the replies guys!

- I am unsure about the house value, I'd say there is a 50/50 chance it could fall or rise. I can't see it rising to what we paid for anytime soon though!

- we currently pay £550 mortgage and rent would be around £800. But renting in the city would mean we'd save the petrol and parking money.

- we could do that but I'm scared to sink that into this house in case the value does fall. I feel like that £10,000 is our lifeline to get out of here!

-the capital of our mortgage goes down around £230 a month at the minute

I should also probably say that we bought this house way too young (19) and its in a fairly rubbish area. I feel like we missed out a bit by being sensible and buying (we thought) and not living in town! We plan to have children in the next two years when we get the bigger house.

So your raising £3,000 on top of savings a year, I'd keep the house going for a year or 2, as you aren't in a rush with the children side of things.

Debtslayer

Mrssweetbell wrote: »

Hi all,

Hoping you can help or give some advice as I'm unsure what is the best thing to do at the minute.

We currently own a 2 bedroom terrace house which we bought in 2006 for £89,000. This is now worth £75,000 (to sell- I've had estate agents round and next door has just sold for £75,000 too) and we owe £73,500 on the mortgage. Our main end goal is to buy a larger, family home and we have £10,000 saved separately to go towards that. At the end of last year I started the process of remortgaging our house (we have an NRAM together mortgage so are stuck on their SVR of 4.79%) they valued the house at £60,000 so we couldn't remortgage.

We have a good disposable income and already overpay our mortgage. We could overpay by around £500 a month.

Recently we've toyed with the idea of selling the house to break even and moving into rented accommodation in the city centre that we work in, meaning we'd save time and cost of parking / petrol (around £200 a month) there are two of us so driving is cheaper than the train / bus.

My question is, and sorry if this is rambling! Which is the best thing to do? Stay in this house and risk the value falling lower and keep paying to maintain it or move to rented accommodation and save a deposit for the next house? (The outgoing a for both work out roughly the same, apart from we would be paying off someone else's mortgage in the rented property)

Thanks in advance!

Could you buy now in a better area? You would just about break even on your current property and would be able to remortgage at a lower rate. Plus you would still own a property in another better area

merrydance

Out of interest where do you live? First post I've seen in ages that property prices are not going up.

Mrssweetbell1

Me again! I had to join as a different name, I couldn't log in.

I live in Dewsbury. You may have heard of it as the 'terrorism capital of the UK' / Shannon Matthews!

We have £10,000 saved so could buy a £100,000 house somewhere in a nicer area but I'm not sure we'd want to- I'd rather wait and be able to buy the next house as a family home.

The other thought I had was maybe to rent ours out while we rent and save up for a year too- but it's the same worry that the house would drop in value again ��

AnnieO1234

Just remember that you could get stuck with fees and even moves every six months which could be in the thousands. I really feel you should try to buy somewhere else now or stick with it till you can buy somewhere else in a year or so. Xxx

Debtslayer

If it were me I'd buy the 100k house in the nicer area and get rid of current house. I presume the nicer area hold their value/ increase?
Factor in moving and using the 100k house as a stepping stone against renting for say 12 months and how much you will have spent on rent and fees in that time.
I wouldn't step off the property ladder