Better off selling up?

moogyboobles

We are struggling to pay all the bills (even more so due to a brief period of unemployment a year ago so we have arrears from then), 5 of us (3 children) in a tiny 2 bed. It's unbearable. Our mortgage takes 60% of our income (my husbands wages plus tax credits). We desperately need to move. Housing association will help as they class us as overcrowded but they need 3k upfront. We cannot possibly get that.

We noticed people who rent are better off than us, same income yet they get housing benefit. Because we own we don't get help.
So was thinking would we be better off selling? Renting with the equity and when that runs out hopefully I will be able to work by then or get housing benefit.
Is there a way of finding out for sure before taking the chance?
I've not been able to find work around my husband that I am healthy enough to do yet....and then would the tax credits taken away be more than my earnings?
Really are stuck in a rut!

pinkshoes

Given your current situation, I would certainly consider selling, as spending 60% of your income on mortgage is crazy!

How much equity is in the property? Are you on a repayment mortgage or an interest only? Is the mortgage fixed for a set period of time where you'd have to pay a fee to exit from it?

Renting with the equity and when that runs out hopefully I will be able to work by then or get housing benefit

You shouldn't rely on housing benefits to get through life. Could your husband take a 2nd job until you're well enough to work. Earnings being less that tax credits is a fault with the system, as it often doesn't take into consideration the cost of transport to get to work, which is far from cheap. Having a job can be good for your mental state though, as sitting at home all day can leave you depressed and unmotivated.

moogyboobles

He has got 2 jobs already! I hardly see him, lack of transport, childcare (I don't believe in leaving babies in childcare so won't work when my husband is until they are all at school) and poor health is why I cannot work yet. The few part time jobs in my area do not suit my medical problem, public tranport costs a fortune to the nearest biger town not to mention childcare costs for 3 children and for the time I'm travelling (and not earning). I really wouldn't be any better off, and even more miserable with the added guilt of not looking after my children.
I worked when I just had my eldest, we were worse off than when not working!
Once they are all in school, hopefully my health will have improved too and I can work properly then.
I really have no idea how other families with big houses manage.

If anyone knows of genuine homework that would be great!

Forgot to say we have 40k equity and the early repayment fee ends next month.

churchrat

hi
this is a difficult situation to be in, and I think it might be a good idea to post this on the DFW board. Lots of people in the same boat trying to amke the ends meet when you can't even find the ends!!
good luck

sarkin

Sell it, get out and bank the money

UK007BullDog

Before you look to rent look in your area what the going rents are for a 3 or even 4 bed house or flat.

Selling up and moving to an area which has better transport links and jobs would be a good idea.

chopperharris

Check out the sections here on cutting back on everything.I have made a few assumptions theat no doubt will not a pply to you.

Kill the cigs if you smoke , you know it makes more sense than just for the money

lose the alchohol , if you feel you need it then you shouldnt have it

say ta ta to takeaways , they taste so much better when its for special treats like occasions not merely because its a particular day of the week

if you are within a short distance from work get shot of the car(s) if you can , if its not an option then buy only ONE 3yo and low mileage from hyundai , but not a tank 4by though.

freeview is exactly what it says on the tin , ditch sky or virgin , the kids channels are on there anyway

internet is free at library , its not a neccesity even if its seems that way , some have mini creches on that would give a bit of support while the kids hear a story it gives you a break

cut the bloody cord (telephone cord that is)and get mobiles on payg same network and only use them if you REALLY need to.Theres no need in three phones per couple if the mobiles are on at home anyway and your skint , answer all your calls rather than call back and it costs you nothing too.

dont use credit at all , if you need it then save for it , if its a true emergency ie fridge then have a low rate card from your bank not a store card

holidays are better when they are only financially viable , you still come back to more stress if you dont

terry nappies , the old brigade swear by them , they had less money so thats one thing they do know about is saving every penny

get a benefits/tax credit check

use shops like lidl , aldi first and own brand when its the big two.

dont use catalogs , but buy kids clothes from the big two rather than a boutique.

theres more on here somewhere on living like a miser which sometimes for some must be done for more than just a short time.

moogyboobles

Yep I do most of that, net the husband must have for work. Car is broken so we don't use that anymore, I've been washing nappies for 5 years now, phone is cut off, we only get incoming calls, no credit cards...all arrears are mortgage and utilities when my husband lost his job for a few months. Not had a holiday in years and no catalogues. there ins't much left to cut back. Not been out with my husband in 2 years.
I would love to move somewhere with more jobs, it's a very isolating town.

kj*daisy

I would seriously consider selling, paying off debts and renting in your situation. Especially if you can get a HA property I would jump at the chance, but to be on safe side check private rent amounts in the area you want to live and check what you would get from HB. I think the Council can do a pre-let assesment to tell you how much they would pay towards your rent. But if you have the equity to live off that will also help in the short term. You can keep a small amount in savings i beleive before it stops you getting benefit, but again I don't know for definate.
Only thing is if you can't get HA property straight away and then rent a bigger place HA would probably no longer help as you would not be overcrowded.
It really depends how much you value the security of home owning (an unsuitable house) against renting (possibly a more suitable house), from what you've said you want to move to another area and it would help when you want to work to be where three are more jobs.
And you might even manage a holiday and a night out with your OH. YOu would also be more protected if your OH was out of work again.

Goog luck with your decision.

lynzpower

Could you consider selling up and renting in a new town, maybe somewhere near where you are now, but with better transport, more jobs etc...

moogyboobles

The housing association can help in the way of shared ownership, but we can't come up with the fees. Not until the house is sold, but they need the fees before we sell the house! Can't win there really.
We have to be commutable to London for my husband's job, that's why the cost of housing is so much.
Renting does seem a safer option. When he lost his job I had no idea you got no help with your mortgage (not until it's too late), we had payment protection but was misold it and it was invalid as we found out the hard way. We found out alot of things too late, even when we asked about help with utilities, travel to interviews we were told there was no help. Months later we found out that was not the case Even free school meals took so long to process he was back in work and it was too late. They seem to assume people on JSA know all they are entitled to automatically.
I can't seem to find out what income level they stop paying HB at. Renting a 3 bed is about a grand around here and in other commutable towns nearby. Our mortgage is £700 on our 2 bed.