From homeowner to tenant - are we doing the thing?

sarahlouise210

loft conversions cost money! The way I see it - by selling the house the OP will clear their debts and have some left over - they may even qualify for some housing benefit. In an ideal world then they would be able to own their own home and have enough space and enough money - as this seems to not be the case selling the assett they have in heir home seems sensible to me.

space_rider

It is a step backwards but is it really a good idea to take on another house with a debt of £25,000. If you were to buy a bigger house you would really be over stretching yourself. I only had 8 years left of my previous mortgage and I took on a bigger mortgage for 22 years. I have 4 children and we had outgrown the previous house. I was never really bothered about interest rate rises as I only had a mortgage of £25,000 and now I am very interested in it. My payments have gone up by £100 per month in the year I`ve had this house. If things did get bad I could sell it but I would get less than what I paid for it. I would perhaps sell it and use the money to pay off the debt. If you did want to buy another house at least you would be starting afresh and who knows you may even end up buying for the same monthly figure as your rent.

devilot

We can easily afford rent of maximum £500 per month which in my area will get us a decent 3 bed in a decent area (we're up North). At the moment we are paying out at least £600 per month in unsecured loans, minimum credit card repayments etc, which while the bulk of it would be paid off in 5 years (£14,000 in a loan), of course the credit cards etc will never be paid off just meeting the minimum repayment per month. We never miss any payments, just we will be paying them forever at this rate, and STILL not have a bigger house!! This way, it is a clean break and who knows, in a couple of years if we save any 'excess' money from the house sale, we might be able to get back on the property ladder if the market calms down as predicted.

I think if we're gonna sell, now is the right time - we probably won't have as much equity soon...

Also forgot to say, our mortgage is close to £200 per month so to work out how much extra we will be paying, it comes to an extra £300 per month, which we are more than shelling out for our debts, so we an definitely afford it.

Edited to add again, the debt we have is mainly from me being stupid and frivoulous as a single parent - the majority of it is mine , and also house improvements (new bathroom, new central heating etc) and also we got married last year which happened to cost quite a bit more than we anticipated! Hopefully we won't be having that expense again, lol.;) The debt has built up and built up over the years, different consolidation loans, conslidated again, and then again as you get a bit more debt. Its so easily done.

Doozergirl

It sounds like you are confident with your decision and I think you're right to be

Badger_Lady

Renting wouldn't suit my circumstances, but it sounds like it would suit yours

It will be a tremendous relief to you to clear those debts and get back onto a level playing field, with more space for your growing family.

You may well find yourself in a position to buy again in the future :beer:

inmypocketnottheirs

The only problem with renting is you may find that for various reasons you are moving house every 6 or 12 months. A lot of BTL landlords sell up, or people working away come back home or sell for other reasons.

Howabout thinking about a loft conversion and remortgaging to reduce your cerdit card payments. This is not something I normally suggest, but I think it could be practical in your situation.

Doozergirl

The loft conversion thing is a joke, right?

It would more than likely overdevelop the house anyway if it is a small two bed. The result would be a house worth not much more than one without the conversion. Sounds like it might still be a two bed once you've found place for the stairs to go anyway.

Let alone the added debt it brings

inmypocketnottheirs

Doozergirl wrote: »

The loft conversion thing is a joke, right?

It would more than likely overdevelop the house anyway if it is a small two bed. The result would be a house worth not much more than one without the conversion. Sounds like it might still be a two bed once you've found place for the stairs to go anyway.

Let alone the added debt it brings

A loft with two rooms?

Doozergirl

inmypocketnottheirs wrote: »

A loft with two rooms?

Possible I guess but you do lose a lot of what would be useable space downstairs because of the eaves, assuming the higest point in the loft is even high enough to meet current regs.

space_rider

I live up north on an estate which is about 2 and a half years old. Many of the properties are owned by professional landlords who encourage longer leases. you`ll just need to do your homework and rent the right house. House next door to me is rented and the landlord bought it as an investment. Way prices are he says he won`t be selling because he would be losing money on his investment. His perfect tenant would be someone like you.