In a mess 😕

Mrs_confused

Hi there,

This is my first post so please go easy on me.

Having a bit of a disaster at the moment, it's a long story but here goes....

In early 2008 we naively took bad financial advice and at the age of 23 my partner and I bought our first property through Mortgage Express with 100% mortgage on a flat for 93k.

Fast forward 5 years and 2 babies later the flat became nightmare. We looked into selling but we were faced with a 30k shortfall due to negative equity. We managed to secure a second mortgage through the Halifax to buy a 4 bedroom family home and decided to rent the flat out with permission for Mortgage Express.

Fast forward another 5 years.... The once sought after area that we live in has steadily gone down hill and last week we were victims of an arson attack while we in bed sleeping. We were woken by a neighbour on an early morning dog walk who had luckily spotted the fire. 3 wheelie bins had been set alight and propped against my house. Luckily no one was hurt and the fire was swiftly under control thanks to the emergency services but this has left me shaken to the point I no longer want to live in this house. We have around 25k of equity in our house.

To make matters worse on the same day our tenant of 5 years contacted us to say she was moving out of the flat next month. My mortgage for the flat is around 77k, im confident we could sell for between 70-75k. We are not keen on letting out the flat again as we have no desire to be landlords and do not have to spare cash for the upkeep.

Myself and husband both work hard but we don't have great paying jobs and with 2 young children we struggle to save. I also have around 5k on credit cards. We would manage to pay 2 mortgages short term but this isn't an option for more than a few months.

I don't feel safe in our house but it seems impossible to move right now. Not sure if we should try and sell the flat and do our best to come up with the cash to cover any shortfall as I feel this would make moving less complicated. Or I was thinking of contacting local builders and enquiring about part exchanging one of the properties, probably the flat as I think we may struggle to sell it.

I know that there is no easy solution but just feel like I have no where to turn so any advice would be appreciated.

Thanks

dimbo61

Spend some money on CCTV to cover the house and bins with dvd recorder.
Carry on renting the flat for the time being as you would otherwise have to sell while paying the mortgage and other costs of an empty property.

middleclassbutpoor

I can completely understand why you are probably feeling a bit vulnerable at the moment.

Don't assume that part ex on your flat would be the easy solution, I know that when we have been looking at new builds as part of our overall search for a new home, it was mentioned by one developer that they don't part ex flats. We don't own a flat so have never asked specifically but this lady was the only one who really spelled out the full kind of considerations for part ex to us.

You need to get CCTV and secure your property. Make sure you have smoke alarms and an alarm on your house.

Try and sell your flat first on the open market. Price it as keenly as you can for a quick sale to cover your mortgage and selling costs.

Once you have that financial burden off your plate, I would then probably look at selling your house -either via traditional or part ex route. Bearing in mind that you need to be increasing the cost normally of your house by 30% for a part ex to be accepted.

If you cant sell your flat quickly - pull from market and let out again for 12 months and then sell your property - assuming the flat is self funding then you should be able to move.

silvercar

Even though you are having a horrendous time now, the outlook is good.

If you sell both properties you should still have some equity to start again.

Silian

Hi Mrs C,

Oh that is a horrible thing to have happened.

While buying the flat might not have yielded equity you at least did not have to pay rent while you lived there.

I agree with other posters - get cctv cameras (now) and see if you can sell the flat quickly. I would not recommend any of the cash buyer companies as you will lose a lot of money. If you have to continue renting it out you can get management companies to manage it fully for you.

Good luck!