am i doing the right thing?

Jberts

Hi, I have asked for help on here before and received and took the advice given....so I am back with another question to help me with a decision. At the moment we are paying £650 a month for rent on a property. I have been desperate to get on the housing ladder again after I had to sell my home after divorce to my first husband. So after clearing debts with the money from that - MSE advice we have been told we can get a small mortgage in my husbands name only high street or adverse in joint. My husband is in the building trade and we are planning on buying a house that needs work doing to it and have had an offer accepted at £62000 on a two bed terrace in a town about 25 minutes drive away. I was thinking at first that we could just get back onto the housing ladder and do this up and sell after 6 months. I was even thinking of keeping the rented property here for 6 months while we did it but although it is doable as the mortgage would only be 200 a month if we lived in it after a month of getting it so that it is ok (he says would be ok from day one but its a bit damp) obviously we would save a fortune. It would be a squeeze as I have three children two boys and one girl. I am thinking they get the bedrooms and we will have a sofa bed in one of the rooms downstairs ....its a squeeze but.......am i doing the right thing? ......

AnotherJoe

I dont think it sounds realistic for 5 people to live in a 2 bed house whilst doing whats sounds like serious work to it. Plus, I doubt it will be six months. You'll have to move in, start doing the work, wait until its finished and then put it for sale, find a buyer, have the sale complete, at the same time as looking for another house, buying that and coordinating it all.
Id have thought you could do the work much quicker if you stayed in the rental, and also you wouldnt have to coordinate the sale with your next purchase. Of course when its complete after say 2 or 3 months you could all move in and then look at selling?

Jberts

Yes I guess a combination may work. It does have a kitchen and bathroom - it needs new windows and a damp proof course as the main part of the work. But the current owner did rent it out up until recently so I guess most of it is cosmetic. My old house was a lovely four bed detached and loads of space for everyone .... i really feel I let the kids down when it was sold ....... its not a forever family home the two bed terrace its the only thing we could afford in his name alone without going down the adverse mortgage route. The mortgage advisor said in 12 months I would be ok for some high street lenders so I was thinking just get back on the housing ladder. It is in another town and i have a four year old about to start school so I have also the decision of which town school to put him in. ...hmmm

need_an_answer

I personally would keep the refurbishment separate from home life simply because its easier for everyones sanity.


When you travel somewhere to refurb you need to make the effort to get it done,when you live amongst it you kind of start to live with things and never get round to doing them...suddenly you'll find you've all been there far too long,the work hasn't progressed well and everyone is getting under eachothers feet and on their nerves!


If you can afford to keep it separate even if only for a few months whilst most of the hard stuff is done then do it that way.

I wouldn't bank on trying to flip the house either, in this day and age you wouldn't make a great deal from it...you will potentially find that once renovations are done you have a house worth near enough what you paid for it plus the cost of the renovation...and you'd still have all your selling fees to pay

Jberts

I think it was a case of getting back on the housing ladder.....not sure if that is a good attitude or not really. The house offer has been accepted at £62000 so its not going to be a big money maker when it is sold on so I think your right with that - but maybe a stepping stone. is it better to buy the house you can afford (or be given a mortgage for) or is it better to carry on renting. Initialy my thought was the same as you both and the intention was to get a house and to have a project and a little bit of security that we owned our own home. Albeit a bit run down and not big enough. I suppose since then I have thought well if we could manage then maybe its worth moving in and saving that £400 a month. Maybe stay here a couple of months whilst the big stuff is done and then move in.

AnotherJoe

You could also "slum it" for a year or so then move on having saved from not paying rent?

steampowered

Would your financial position be better if you continued renting for another year or two?

If so, it might be worth doing that. House prices are pretty flat at the moment so you would not be losing much by waiting 12 months.

If you are intending to move once you've done the work anyway, it may not be worth it. Remember to add up the moving costs, the mortgage arrangement fee which will get added to your mortgage (£2k?) and solicitors' fees (£1k?) and the cost of the work. Its starting to sound unlikely you'll be making money on this property.

The attitude of trying to get on the housing ladder immediately made sense when house prices were rocketing, but that is not what is happening right now.

Mossfarr

steampowered wrote: »

Would your financial position be better if you continued renting for another year or two?

If so, it might be worth doing that. House prices are pretty flat at the moment so you would not be losing much by waiting 12 months.

House prices are not "pretty flat" everywhere. Prices are rising and properties are moving pretty quick where I live - for the first time in years!

markin

Sounds like you need one in your town that you can live in, And can use to save up for a year or 2 to make it more worth the fees and stress, Whats the top end for the street 80K? Could you get that under this brexit market once done up?


Plus can you live in it longer if you cant sell quick or find a short chain?

sgun

Are your children at school? I don't think it sounds fair on them at all. Would they have to move schools and then potentially move again? It wouldn't be big enough for five people. I know there are plenty of families who have to have to live in houses far too small but not through choice, even for short periods of time. When I used to work with younger children one of the main stresses they talked about was not having their own space at home for their toys, to do homework, to relax and get away from other family members when they needed to. I doubt many of them ever articulated it to their parents/carers but it was a real issue.

Jberts

Thank you for all your comments. The town that we would be moving to is a 25 minute drive from where we are now. my husband still works in this town so he would bring the eldest two to school with him - and an option would be to let the younger one start school . The two bedrooms could be made into three spaces by dividing the larger one.....im thinking a room divider rather than a full renovation and so the children would have their own spaces although its not what is ideal or what I want for long term. I appreciate the comment regarding the effect on the kids - ages are 15,13 and nearly 4. The eldest two have had quite a bit of change since i divorced from there dad and i have tried to minimise any impact - all amicable break up and they still see him but I have made some decisions that in hindsight were not the best.


I lived with my ex in a four bed detached house - this was sold during the divorce. I had the money in a 40 day notice account because I was scared i would spend it on silly things. I think it was last year i messaged on here explaining i had debts and should i pay off them or carry on chipping away at them and was rightly advised to pay them off which i did. i did have some adverse credit from before which i never want to get into that situation again.....had a dmp after the split but all paid off now ect. So my past financial history wasnt great. From the sale of the house I moved into a rented four bed detached in a new area but not too far away....but this was so expensive and it was in a lovely town. The landlord decided to sell up and we had to move and we moved out of the town to a cheaper house but about 3 miles away. The house prices in the town have risen quite a lot. A three bed terrace house there is about 190 in a nice area although i have seen some three bed semis in the not so nice area for about 150 that need some work doing to it. Basically I think when i moved to that town I hoped that would be it....but after speaking to a financial advisor even when we can have a joint mortgage i think a house at £150would be the maximum....and I cant see anything drastic changing income wise over the next two years. The other town is a nice town but house prices havent recovered fully since 2008 yet and they are a lot lower in this area anyway.... The intial reason for buying this house was as it needs work doing to it....fell into a category that my husband could afford on his own. Got us on the housing ladder and ...i thought gave a bit of security . I realise ive made a lot of mistakes and think the harsh reality of knowing that I cant afford what i want. I know it is silly but its almost been the case of trying to replicate what I had before but mortgages are a lot harder now ......oh ive messed up .