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To sell our home and rent while credit score improves

(63 Posts)
happyclapper Thu 06-Nov-14 18:02:12

We have sold our house at full asking price despite some issues with the property but are unable to buy for another 6months to a year when a default notice expires on our credit rating.
I don't think we would ever get such a straight forward sale again if we let this buyer go.
Am I crazy to risk getting off the property ladder?

InfinitySeven Thu 06-Nov-14 18:04:51

Will you be able to rent? Do you have a guarantor?

SillyBlueHat Thu 06-Nov-14 18:09:22

House prices are to increase by 30% over next 3 years so I think you should wait

AesSedai Thu 06-Nov-14 18:10:03

I would never never sell a house and put myself in the hands of a landlord and his whim on whether you have a home tomorrow......or not.

happyclapper Thu 06-Nov-14 18:10:40

Wasn't aware we needed a guarantor!!!!!

atticusclaw Thu 06-Nov-14 18:11:33

How on earth can you know that House prices will increase by 30 percent over the next three years sillybluehat?

InfinitySeven Thu 06-Nov-14 18:12:34

Youd never get an estate agent to accept you where I am (commuter area outside London) with a default. It'd be an instant reject unless you have a guarantor.

SunnyUpNorth Thu 06-Nov-14 18:12:56

I think it depends on the area you live in and how you think prices are going there. Prices are going up in a lot of places and you don't want to end up in a situation where you couldn't afford to buy the house you've sold and have to move to a smaller house/less nice area.

The fact that you've sold at full asking prices suggests that your house is probably reasonably easy to sell and therefore should be again in the future. But without knowing more about your house or area it is difficult for an outsider to know.

I would be very hesitant to do what you're suggesting. Renting is also likely to be more than your mortgage payments. You would possibly better saving the extra cash and hopefully increasing your equity. You would possibly get more responses in the Property section.

Bowlersarm Thu 06-Nov-14 18:13:13

I wouldn't want to be out of the market personally. Why do you have to sell?

carlsonrichards Thu 06-Nov-14 18:14:23

You will either need a guarantor or you will need to pay the rent up front.

It is a very poor move to sell a house and rent privately. Private renting is awful.

Raininginnovember Thu 06-Nov-14 18:14:31

Genuine question, what would people without a guarantor but poor credit do?

Bearbehind Thu 06-Nov-14 18:15:16

People generally don't pay over the odds for houses so you may well get the same price (or equivalent market value price) next year.

The advantage of staying on the property ladder is obviously your property value moves in line with the market but there are signs of a slowdown in the market so selling now might be a good thing.

In your shoes I'd go and see a mortgage broker, with copies of your credit files, and see if they were confident of placing your mortgage with a lender when the default has expired.

No one has a crystal ball in these situations but I'd want to be sure of getting a mortgage in a few months before selling now.

There are so any factors,not least of which the amount of equity in your current home but the lending rules have massively changed this year and, default aside, if you have high childcare costs or other expenses you might not be able to borrow as much as you currently do.

happyclapper Thu 06-Nov-14 18:18:05

We are just generally unhappy where we are at the moment. I cannot see the price of our house increasing by much at all and I don't think we would get a buyer to offer the price we have got without us doing a fair bit of maintenance over the next few years.
I read that not all landlords do a credit check. We are both in full-time employment with good salaries and references and I think we could get a guarantor if needed.

avocadotoast Thu 06-Nov-14 18:18:10

Raininginnovember, a lot of the time you'll be asked for 6 months rent up front or similar.

OP, how much would rent set you back? Would it be more than you'd pay on a mortgage?

If you have a mortgage on your current property, are you able to port it across to a different property?

carlsonrichards Thu 06-Nov-14 18:18:22

Pay the rent up front, Raining.

Bearbehind Thu 06-Nov-14 18:19:39

Genuine question, what would people without a guarantor but poor credit do?

They are often restricted to finding properties through places like Gumtree thus avoiding EA credit checks but opening themselves up to a whole heap of other potential problems.

happyclapper Thu 06-Nov-14 18:23:50

We have explored all the avenues re: remortgaging at the moment and it's not an option. The house we were interested in buying would be available to rent and would be easily affordable and we would be happy to pay rent in advance. It is a new house so I don't anticipate any problems with it.
Our mortgage advisor said that if we waited a year we would have a much better chance of getting the mortgage we want though there are no guarantees.
In the meantime we would be in the house we want, in the area we want and our equity would be in the bank. We may even be able to save a little.

Bearbehind Thu 06-Nov-14 18:25:42

Are you planning on eventually buying the house you want to rent then?

Are you sure that it will be for sale?

Rockdoctor Thu 06-Nov-14 18:27:10

I'm in the SE and if I could get asking price right now I would grab it with both hands and run! The market here is not looking good in the short term (and that's according to our agent). Presumably those people who "know" prices are going up by 30% are the ones buying - and I can assure you there aren't many of them around here.

Tinkerisdead Thu 06-Nov-14 18:27:28

Can I just tell you my story so you can see how this might pan out.

In 2010 my husbands business went bust, we couldnt afford to keep the house and sold it at rock bottom price walking away with sparse furniture etc. We had to rent and luckily my in laws acted as guarantor. At this point we had no debts whatsoever. Later the bank called in a personal guarantee (like a bond that you promise to pay if the business folds) and we had nothing and no assets and so had to declare bankruptcy.

In that time we've had five homes. Five homes with two little kids who now regularly say "when we move again" as its now routine for them. That breaks my heart. Every time we've moved was because the landlords have sold up in a growing market. Each time we've had to find around 500.00 removals, 250.00 application fee and a months deposit of around say 700.00. All before we get the previous deposit back.

I wouldnt wish this on anyone, my kids are really unsettled, god i'm really unsettled. Our deposit is constantly on my mind as I fear another swift move. Not to mention, the restrictions and inspections.

If you have your own home. Hold on to it with everything you have because the alternative in private rent is horrible.

happyclapper Thu 06-Nov-14 18:28:36

We wouldn't buy that exact one but another of the same design on the development. The builders have approached the buyers who bought this house as abut to let and have not yet put it through an agent.

happyclapper Thu 06-Nov-14 18:31:55

I'm so sorry Doctorswife. That is not a good situation to be in. We could easily stay where we are which is why it's such a difficult decision.
Our main worry is not being able to get a mortgage again if the banks get even more picky.

Sockstealer Thu 06-Nov-14 18:34:56

I don't think I would do that if I were you.
Could you rent your own house out and then rent one for you to live in.

If I couldn't do that I'd just stick where you are for now until you're in a better position.

happyclapper Thu 06-Nov-14 18:40:39

mmm. That's an idea Sockstealer. Only trouble is it would require even more maintenance and it wouldn't rise in price significantly to cover it.
I don't think the owners of the house we want to rent would sell it for quite a few years as it is not likely to rise in value quickly due to the area. i think it is a long term investment for them.

Topseyt Thu 06-Nov-14 18:49:18

Any sensible landlord will want to do a credit check on you, so the blip on your credit score would come out. This would set alarm bells ringing with prospective landlords and is why you almost certainly would require a guarantor (and the guarantor should also be credit checked, by the way).

I have been a landlady for a long time now. We have a lot of experience of many different types of tenant, and believe me you cannot be too careful. Once bitten, twice shy etc.

You say you could easily stay put and you worry that you may not get another mortgage. So why are you selling? In your shoes I think I would want to stay put. You have security that way, so why trade it for insecurity?

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