Selling House now for Future Value?

StanDK

So I bought a 3 bed semi detached house in 2005 and I took the loan over 30 years. Fast forward 12 years and now with a wife a 3 kids, we have decided to buy a bigger house but because our current house is in my name, it is affecting my affordability.

So we decided to sell the house. As you all know the market is very slow at the minute and I have not received an offer that I could accept since its been on for sale for one year.
I was recently contacted by one of 'those' property management companies and they made me an interesting offer and I am confused on whether to accept it and move on or not - so here are the numbers:-

House bought in 2005 for £80,000
Mortgage Balance with first Mortgage is £55,000
2nd Mortgage/Secured Loan on property for £14,000
Equity around £11,000 ( as house prices has not improved in the area)

The company offered to pay me £8,000 upfront
The want to take over the liabilities of both the loan with the bank and also the secured Loan

But they want all debt to remain in my name whilst they service the loans and plan to pay it all off within 10 years. The said that because I am on a cracking rate of 1.5%, they would not want to come out of that rate.
A legal document will be drawn to cover all these.

But I am uncomfortable having the loans still in my name for 10 years whilst this company renovates and rents it out to tenants. The only advantage to me is that i will get £8,000 to add to my new deposit for the new house and I can finally move on. Semi detached houses in my area are capped at between £70 - £80 so i know that I will not sell this house for more than £80,000 in ten years time anyway.

Your thoughts please?

tom9980

Stay well clear it smells dodgy to me, besides the house and mortgage being in your name will prevent you buying a home for your family.

mrginge

StanDK wrote: »

Your thoughts please?

Quite simply, my thoughts can be represented as -

:eek:

AnotherJoe

The market is "slow" for houses that are priced too high.
Steer clear of what sounds like a whacking big millstone of a complex financial arrangement which as said wont leave you in a position to buy as you'll have all that debt, and just sell it. Lower the price, speaking of which your equity is not £11k if you cant sell it at £80k.

Doozergirl

Money laundering, anyone?

davidmcn

StanDK wrote: »

The want to take over the liabilities of both the loan with the bank and also the secured Loan

But they want all debt to remain in my name

So they don't really want to take over the liabilities then? I'd hazard a guess that they don't want you to seek consent from your lenders to what they're proposing either.

A legal document will be drawn to cover all these.

That'll be good for a laugh.

But I am uncomfortable

Good, that's entirely the correct sensation to have.

Your thoughts please?

Run a mile.

Pixie5740

The mortgage and secured loan is currently in your name. You are named on the deeds. I cannot see either lender agreeing to a transfer of ownership between you and this property management company whilst they have charges against the property. Nor do I think that you will get consent to let from both lenders for 10 years.

You will still own the property so that means extra SDLT when you buy your next home plus affordability will still be an issue as you will be asking a lender to give you a mortgage when you already have a mortgage and a secure loan.

Be realistic about what your house is worth and price it accordingly. Alternatively cut your cloth accordingly and continue living with your wife and 3 children in your current home. 3 bedrooms between 5 of you is hardly overcrowding.

Thrugelmir

StanDK wrote: »

House bought in 2005 for £80,000
Mortgage Balance with first Mortgage is £55,000
2nd Mortgage/Secured Loan on property for £14,000
Equity around £11,000 ( as house prices has not improved in the area)

To improve your equity pay down the debt owed. Is the mortgage currently interest only?

tom9980

Doozergirl wrote: »

Money laundering, anyone?

My bet is they will rent it and run off with rent and deposit at some point, most likely a scam or fraud of some type. Even if the company holds up there end the OP is the one with the rope around there neck if anything goes wrong.

G_M

I cannot think of anything constructive to add to the above responses, except that I agree with them all.

csgohan4

if it's too good to be true....