Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Nix1983
    • By Nix1983 7th Mar 18, 10:38 PM
    • 1Posts
    • 0Thanks
    Nix1983
    Moving from council to mortgage
    • #1
    • 7th Mar 18, 10:38 PM
    Moving from council to mortgage 7th Mar 18 at 10:38 PM
    Hi,
    Advice needed please. I recently received a lump some of money as inheritance from my mum who passed away. Her wishes were that the money was used to secure a property for me and my two boys. Since the birth of my first son I have been in a council 2 bed renting. I have been in full time work but liked the security of council housing and support working credits etc. Now Iím aware that I will loose that support if I move to a mortgage but it would be nice to actually be owning something rather than renting. We are in desperate need of a 3 bedroom. I have been approved in principle for the other half as a mortgage but am now scared to actually go forward. Lots of what ifs....I have also looked into shared ownership Too and wondering if thatís a better way to keep the deposits secure and less risk. Please help. Nicola
Page 1
    • elverson
    • By elverson 8th Mar 18, 8:21 AM
    • 784 Posts
    • 502 Thanks
    elverson
    • #2
    • 8th Mar 18, 8:21 AM
    • #2
    • 8th Mar 18, 8:21 AM
    Have a look at the shared ownership threads on here - to me it sounds like the worst of both worlds if you already have a secure council tenancy or could get a mortage.
    • tori.k
    • By tori.k 8th Mar 18, 8:59 AM
    • 3,179 Posts
    • 7,985 Thanks
    tori.k
    • #3
    • 8th Mar 18, 8:59 AM
    • #3
    • 8th Mar 18, 8:59 AM
    Sorry to hear of your loss.
    Unfortunately your inheritance could impact on your working tax credits as you have to declare interest on income from savings.
    Shared ownership you would still have the sole maintenance cost of the property, ontop of your rent and/or mortgage, could be a option to create a secure tenancy in a larger house but a very expensive way of doing it if you can already buy on the open market.
    Have a play with the numbers we've just gone STC on a property our mortgage payment is in line with the rental payment we have been paying each month and have the security of being able to lock in at that rate for quite a while. as long as you leave enough aside for an emergency fund from the start and keep adding a little to it each month you should be able to cover wear and tear quite easily, insurance will cover the rest. the biggest difference between renting and a mortgage ( if you have that emergency fund) is the mortgage has an end date.
    good luck
    Debit to Credit (stage 1) 3652.34 completed 15/10/16
    Debit to Credit (stage 2) 6299.09 completed 25/06/17
    Mortgage Free (stage 3) 140000/ 870
    Save 12k in 2018 #76 3000/6000
    • the_quick
    • By the_quick 8th Mar 18, 10:29 AM
    • 60 Posts
    • 30 Thanks
    the_quick
    • #4
    • 8th Mar 18, 10:29 AM
    • #4
    • 8th Mar 18, 10:29 AM
    Just check if you be able to afford mortgage payments at full interest rate, as even if you secure good deal for few year, interest rates are very likely to go up, so will your mortgage payments. Apart from that you should be fine. As mentioned above, one day you will pay it off, your kids will go on their own way and hopefully it will allow you to have easier transition into retirement.
    Good Luck
    • Cakeguts
    • By Cakeguts 8th Mar 18, 2:25 PM
    • 4,364 Posts
    • 6,242 Thanks
    Cakeguts
    • #5
    • 8th Mar 18, 2:25 PM
    • #5
    • 8th Mar 18, 2:25 PM
    Only do this if you are sure that you will have employment for the whole of the mortgage term. There are no benefits to pay a mortgage if you are not working. So from the point of view of not having a job a secure council tenancy is safer than buying something.
    • Mojisola
    • By Mojisola 8th Mar 18, 2:30 PM
    • 29,250 Posts
    • 74,714 Thanks
    Mojisola
    • #6
    • 8th Mar 18, 2:30 PM
    • #6
    • 8th Mar 18, 2:30 PM
    Her wishes were that the money was used to secure a property for me and my two boys.

    I have been in full time work but liked the security of council housing
    Originally posted by Nix1983
    While your mother's wishes would be well-intentioned, you have to do what's right for you and your family.

    A secure tenancy and knowing that the rent will be paid regardless of what happens to your income is a massive thing to give up.

    Whatever you do, don't rush into it.

    Making life changing decisions while you're still grieving isn't wise.
    • Red-Squirrel
    • By Red-Squirrel 8th Mar 18, 3:09 PM
    • 2,670 Posts
    • 7,148 Thanks
    Red-Squirrel
    • #7
    • 8th Mar 18, 3:09 PM
    • #7
    • 8th Mar 18, 3:09 PM
    Do you earn enough to be able to cover the costs of things like new boilers, a new roof at some point, unexpected things like burst pipes or leaking windows etc? Is your job secure or are your skills in high enough demand that you could find the same sort of work quickly and easily if needed?

    If yes to those, I would say get the mortgage (don't touch shared ownership with a bargepole) but if not then you would probably be better off staying in the council house with the security plus no added stress about maintenance/repairs.

    Houses do cost money, as soon as you've finished paying for one job something else needs to be saved up for!
    • TBagpuss
    • By TBagpuss 8th Mar 18, 4:39 PM
    • 6,487 Posts
    • 8,418 Thanks
    TBagpuss
    • #8
    • 8th Mar 18, 4:39 PM
    • #8
    • 8th Mar 18, 4:39 PM
    Only do this if you are sure that you will have employment for the whole of the mortgage term. There are no benefits to pay a mortgage if you are not working. So from the point of view of not having a job a secure council tenancy is safer than buying something.
    Originally posted by Cakeguts
    No one can be sure that they will have employment for the full term of a mortgage.

    OP, if I am reading this correctly, you have enough to put a 50% deposit down on a property and can get a mortgage to cover the other half of the purchase price?

    That puts you in a pretty string position, most first time buyers will have a far smaller deposit.

    It is sensible to look at the costs - taking out a mortgage at a fixed rate might be sensible as it would fix your interest rates for the next 2, 5 or even 10 years.This would give you a bit more certainty and would help to cushion you from the cost of rising interest rates.

    If you buy, you can still claim tax credits (if you qualify financially) - equity in your home is counted as savings. If you were out of work then you could apply for help with the mortgage although this would be by way of a loan, rather than a straight benefit, so you would have to repay it in due course.

    You would need to budget for the costs of maintaining your home rather than relying on the council, and for buildings insurance.

    I would suggest that you perhaps sit down and work out a budget of your income and outgoings, and look at putting some money aside each month towards a 'emergency fund' to cover things such as repairs. As your boys get older, you may well be able to increase your hours (and therefore your income) and think about putting more into savings and/or overpaying your mortgage.

    I personally would not go for a shared ownership property if you don't have to. They can be a good way for someone who can't otherwise do so to get into property ownership but you have all the responsibilities of a homeowner with many of the disadvantages of renting.

    If you chose not to buy, then you will have to declare the money you have inherited and it is likely to mean that you won't qualify for any means tested help.

    how long is it since you lost your mum? It's OK for you to decide to take some time to come to terms with that loss before you make a big decision about moving, or not.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,356Posts Today

7,669Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin