Should we sell, rent for year then buy again?

LouBlue

m00m00 wrote: »

in your case LouBlue, I'd think very carefully about it

it would all depend on the following, whether you have any clauses on your mortgage for early redemption, and also you getting full selling price for your flat, something you are not guaranteed to do

119k mortgage + 20k debts vs 142 max selling price, probably has you breaking even once estate agent and legal costs are taken into account.

anything less than full selling price and you will not be clearing your debts completely, although you should make a large dent in them.

Thanks for the reply.

I have checked early redemption and it is £3500k, so we are waiting til March, when we won't have to pay that.

The flats in my area and the road I live in go extremely quickly, due to location and local amenities, so I am hoping, and the Estate Agents that came round to value it last week agreed, that it shouldn't go down by March, it might even go up a bit. But I know no-one really knows that.

All I do know is that if we don't sell, the chance of saving up for a deposit and clearing our debts, is practically zero. Well it will take us years.

backtomum

This is what we've done - it's a gamble. We know two people who are doing the same

Plus points

• Debt free and can finally sleep the night without worry
• £26000 in bank earning a good rate of interest in Icisi bank
• Renting a nice 3 bed semi for £550 per month in good area (if we bought this house it would cost at least £900 plus per month mortgage)

Minus points

• May end up priced out if market perks up and we stand no chance of a council house in this neck of the woods - everything goes to social cases and immigrants
• May have to move if landlord decides to sell
• Make sure you don't withdraw your money - we've already used £3500 buying a newer car after the other conked out
• The house doesn''t feel 100% like home as you can't really make changes to decor etc

It's a big decision but one we decided to take - it may be the biggest mistake we've ever made and believe me we've made some stonkers over the years; or it may all fall into place. Only you can decide if it's worth the risk. It was our only way out of debt. We could have gone bankrupt but we would have lost everything - it wasn't a hard decision in the end.

Good luck in what you decide.

SquatNow

Given the OPs outstanding debts, realistically they would be better off selling up. They currently have about £10k equity and sales costs could easily eat that away.

1 important point to make: There is no such thing as an unsecured debt. The rules all changed in April 2006... effectively all debts are secured against any assets you have.

It's quite possible for a credit card company owed £1000 to repo your house. yes this was aways hypothetically possible, but from April 2006 they just need to fill in 1 form and have it stamped by the magistrates clarke.

Cut your losses and run and buy again after the crash. Even if prices only stagnate you'll be no worse off as you wage will have risen the the time you come to buy again.

leftieM

We're thinking of this option too. Renting someone else's house is the only way we can get a bigger house in a nicer area - the rent is about a third of what the mortgage would be. It's a punt though. If prices rise again as they have in NI over the last five years we're completely stuffed. I suppose I don't believe that's going to happen.

nollag2006

backtomum wrote: »

...we stand no chance of a council house in this neck of the woods - everything goes to social cases and immigrants.

Don't believe everything you read in the Daily (Hate) Mail.

kingkano

SquatNow wrote: »

Cut your losses and run and buy again after the crash. Even if prices only stagnate you'll be no worse off as you wage will have risen the the time you come to buy again.

Or (more likely) your wage will be less because you will have been laid off due to the recession that accompanies any large drop in housing prices.....

Based on the sums, like everyone says, maybe you'd be better off renting. But I'd be more concerned about the 47k debt you racked up in 7yrs(?) and whether you will be able to curb this after selling your property....

Jonbvn

chriseast wrote: »

I am now paying £900 a month for a house worth £400000 which would cost me several times that on a 100% mortgage.

After a quick search on Rightmove, I have some doubts about the veracity of your statement.

merlinthehappypig

Jonbvn wrote: »

You are amazingly fortunate to be able to rent such a property at such a low rent. Where I live, that level of rent payment would probaly only cover a house worth maybe slightly over 200k.

I didn't know that at the time, but am more aware of it now. It's a listed building through a big landlord who has mostly that type of house - a bit like the National Trust.

Having said the house is worth £400000 though, I'd clarify that by saying that is about what it would fetch on the open market. Personally I don't think it is worth anywhere near that. It looks nice, but has small rooms, original windows which make it dark and don't insulate and the associated damp problems!

If nothing else it's stopped me making a mistake when we buy again as we always thought that we would like this type of house!

merlinthehappypig

Jonbvn wrote: »

After a quick search on Rightmove, I have some doubts about the veracity of your statement.

That's up to you, though as I am not in habit of lying I'd prefer you to reach your opinions based on proper research, rather than a few minutes flicking through a website.

nollag2006

Good article in the Sunday Times recently, that showed that selling to rent only makes sense if you think that house prices are likely to fall by 5% year on year.

I don't think even the eternally caterwailing Capital Economics are predicting that.

By stepping off the property ladder, it could pull away from you. Round my way (near St Albans) house prices are continuing to roar ahead.

Seems like an awfully big gamble to literally bet your home on a hope and a prayer that house prices will fall substantially.