Difficult situation

Crashy_Time

theartfullodger wrote: »

May I please check I understand: For the avoidance of doubt I am neither criticizing nor praising your approach, just checking I understand what you are proposing: You've got into debt and see renting, thus getting HB/LHA, at the tax-payer's expense, as a way out?

If possible a yes or no answer would be helpful, please.

Best wishes to all at this festive season of goodwill to all.

With savings and/or income from a house sale or rental income they won`t get any help. They should concentrate on paying down their debts, that will improve credit scores.

Philuk

Doozergirl wrote: »

It's only two years to 2019 and that is when you will have some freedom from the DMP. I wouldn't sell up at all. Your debt payments are manageable and interest free so there is no genuine gain to paying it off in one go other than the feeling of being debt free. I think that would quickly be replaced with the anxiety of being a tenant and wondering how/when to get back on the ladder.

I don't think the security of home ownership is less important than the label of being debt free.

Sub prime equals expensive. Rent that is double your mortgage is expensive. Your husband is potentially jeopardising your financial position with the romantic idea of paying off debt.

I'd really try and stick it out. It might be possible to port the mortgage and that would be second best.

One could argue about the "romantic idea" of home ownership too. We do not know where OP lives, not every regions of England are following the so called "ladder" model, if price are flat like they have been in most of the depressed north, OP wont be locked out of the market any more than she is now.


Rents are obviously more expensive than mortgage...for now. We are experiencing a prolonged period of zero interest rate environment never seen in 300 years, odds are that will change and "normalise" before the OP fully repay her mortgage. It would not be unimaginable that interest payment doubles on her mortgage so would her interest earned on 50k saving if she were to liquidate her asset.


There is also a small chance that she end up with very little equity if the markets drops significantly given her LTV of 70%, the market is at record high in many places, so has significant "headroom" (or quite the opposite I suppose) for a fall.


I would personally sell the house, clear the debt and start renting a modest accommodation till I am all clear financially (can always upsize to a better rented house if money starts flowing down).

Crashy_Time

Philuk wrote: »

One could argue about the "romantic idea" of home ownership too. We do not know where OP lives, not every regions of England are following the so called "ladder" model, if price are flat like they have been in most of the depressed north, OP wont be locked out of the market any more than she is now.


Rents are obviously more expensive than mortgage...for now. We are experiencing a prolonged period of zero interest rate environment never seen in 300 years, odds are that will change and "normalise" before the OP fully repay her mortgage. It would not be unimaginable that interest payment doubles on her mortgage so would her interest earned on 50k saving if she were to liquidate her asset.


There is also a small chance that she end up with very little equity if the markets drops significantly given her LTV of 70%, the market is at record high in many places, so has significant "headroom" (or quite the opposite I suppose) for a fall.


I would personally sell the house, clear the debt and start renting a modest accommodation till I am all clear financially (can always upsize to a better rented house if money starts flowing down).

Good post, paying off debt becoming a "romantic idea" is the one thing that will catch a lot of people out when rates rise. The dream of homeownership eh, can`t pay the debts and can`t escape the neighbour! (and probably can`t sell the house?)

smudge2013

Without turning this into a ownership vs rented thread, I think in the vast majority of areas ownership costs less per month in terms of mortgage, you have security of owning the home, and of course the money you pay goes towards your mortgage, not somebody eleses!

If I were you I'd stick where you are because if you sell now, you are no longer going to benefit from the likely increases in the value of your home, which means in a few years your money would be worth less than if it was tied up in bricks and mortar. It may be worth talking to your mortgage company to see what your options are - they might be able to help.

Crashy_Time

smudge2013 wrote: »

Without turning this into a ownership vs rented thread, I think in the vast majority of areas ownership costs less per month in terms of mortgage, you have security of owning the home, and of course the money you pay goes towards your mortgage, not somebody eleses!

If I were you I'd stick where you are because if you sell now, you are no longer going to benefit from the likely increases in the value of your home, which means in a few years your money would be worth less than if it was tied up in bricks and mortar. It may be worth talking to your mortgage company to see what your options are - they might be able to help.

Does HB pay the mortgage if you lose your job?


"Likely" is not a word I would use in conjunction with rising house prices at the moment!


"Tied up" is the problem, the money is illiquid (you need a buyer) and YOU are tied up and stuck until you find a buyer.


I`m not saying never buy, I am just saying that being debt free and renting as cheaply as possible has a lot going for it. Lets see how many people still buy the "paying the landlords mortgage" meme after a proper house price correction.

dogand2kids

If you want to sort out the problems with your neighbours mediation might be an option. Some areas have organisations that provide free community mediation.

cloo

The question for me here seems to be whether the neighbours have a problem with *you* specifically or are problematic in general? Are they likely to move on in the foreseeable?


If it is a disagreement with you and they are likely to move on, maybe let out the property (obviously clearing with lenders) and move back when they're gone?


dogand2kids also has a good point that mediation could be worth a try - it has a very high success rate and is much quicker and cheaper than court, though I appreciate that if things have really curdled it can be impossible to take the other party to the table but it is always worth a attempting.

Crashy_Time

cloo wrote: »

The question for me here seems to be whether the neighbours have a problem with *you* specifically or are problematic in general? Are they likely to move on in the foreseeable?


If it is a disagreement with you and they are likely to move on, maybe let out the property (obviously clearing with lenders) and move back when they're gone?


dogand2kids also has a good point that mediation could be worth a try - it has a very high success rate and is much quicker and cheaper than court, though I appreciate that if things have really curdled it can be impossible to take the other party to the table but it is always worth a attempting.

Easier to just drop the price and find a buyer IMO.

Jack_Johnson_the_acorn

Crashy_Time wrote: »

Easier to just drop the price and find a buyer IMO.

Hahahaha, Crashy is desperate for a house price crash, hence why he comments on every single thread where people are selling their house saying "drop the price" the mans lost a lot of money over the last 20 yrs waiting for a crash, so take his advice with a bucket load of salt. :rotfl: