Mortgage advice needed please!

poorlittlesnail

This is my first post so please be gentle with me!
I’m after some advice about mortgages and moving to a different area. I’m currently living in the south with my husband and my baby but we would love to move to the north. We have a £75,000 mortgage and think, at a fairly conservative guess, our home is probably worth around £140,000. Our mortgage is with Northern Rock and was for around 70% of the property’s value when we took it out. We got the letter about them not offering the same rates once our current fixed term ends in November this year, so don’t suppose it would make sense to stay with them – if they’ll even have us! We feel we have 2 options at the moment (probably have far more but our poor, confused little brains are having trouble with it all!)
1. Sell our place, put the profit into a high interest account and rent up North while we look around, get jobs, get settled and sort out a new mortgage.
2. Sell our place, buy a cheap place outright with the equity (would be very cheap and rundown but my husband has done up the place we are in now so we’re hopeful we could at least put on enough value to cover fees...) Then we could use the time to do a new place up, find jobs etc until we find the place we want to stay in.
Are we being really naïve or do either of these ideas seem feasible. If so, any advice, or any alternatives if not? We are assuming that we won’t get mortgages based on our current earnings when we obviously wont be doing these jobs when we move, hence both plans requiring the move up before the mortgage is sorted?
Any advice for this pair of grown adults who really should know about stuff like this would be gratefully appreciated!
Thanks.

sarah_elton

Do you know the areas you're looking at moving to?

If not, I would certainly go for option 1 over option 2, because:

1) The market's not shooting up now - if you rent for six months and are "off the ladder", you're still going to be able to buy at the end of it. If the market dips, you'll actually be better off.

2) If you don't know the town or area, time spent living there and checking out which parts are nice, have good facilities, etc is sooo worth it. You can't get a true feel for a place just by visiting.

3) If you decide you miss the south, or friends/family etc, you can move back with no hassle.

4) With a baby, do you really want to live in a shell of a house while it's done up? Having that much work done is really stressful. If it was me, I wouldn't want that with a baby to look after at the same time. Plus on top of the stress of moving to a new place, finding jobs, making friends etc. At the end of six months renting you could still buy a shell to do up if you want, but you'll have more of an established life up there, friends to recommend tradesmen etc...

If you can pay six months' rent up front (instead of paying it monthly) you can negotiate a good discount on the rent too.

poorlittlesnail

Hi there, thanks for the reply.
We're pretty definite about the area we want to go to- actually narrowed it done to the village we want to be in but may have to be a bit more flexible!! But it would be sensible to have a lot more time to look properly and make sure its really right for us. Hadn't occured to us to pay rent up front and negotiate a discount either.
I think the thing that really bothers me is that we found the most gorgeous house when we were last up there looking. We know that there is no way we can sell our place, get jobs and a mortgage and get up there in time to buy this house but a little bit of me is still wishing there was a way we could do it!
Thanks again for the reply, was really helpful.

UK007BullDog

I would ditto Sarah.

You can do any of the two. I would definately rent first though to scope out the area to make 100% sure and the market price is falling. make sure you do not touch your money for anything to ensure you have enough for a decent deposit.

poorlittlesnail

Thank you both for replying. We did wonder about a cheaper place first in the hope of making a bit more towards a really nice place (if we can't have the place we've already seen!) But at least it seems like either plan could be realistic.
Thanks.