Selling house - Wwyd a b or c and why?(10 Posts)
Background: Currently sahm and carer going back to work in sept 2018, cant before due to caring commitments. Moving following divorce to new area 80 miles away, 140k funds 60k mortgage needed.
Im looking to maximise house price here in southeast and buy in cheaper area in the midlands. Will end up with same type of house for less.
I have okay to good credit never ccjs etc, I dont have loans or car finance and I have savings. Bank account already clear with frugal outgoings as i generally live that way.
A) Sell house now, buy in feb march 2018 as worried about falling house prices but my mother would need to mortgage some of her equity on one of her properties that i would repay as i wouldn't qualify right now.
B) Sell house now and buy after a year in feb 2019. Would stay with family short-term then move to new area and rent and start work sept 2018 to get wage slips needed to qualify for the mortgage so approx one year after sale.
Would i lose alot of money in a falling market in one year ?
C) Rent house out for one year then sell jan feb 2019. The rent recieved will cover cost of rent in new area and current mortgage ie rent here is 850-950 but 550 -600 in new area.
Then same as b) work sept 2018 to get wage slips needed to qualify for the mortgage and would i lose alot of money in a falling market in one year?
Wwyd and why?
Thanks in advance
I don't think anyone has a crystal ball to be able to tell you what will happen to interest rates and financial markets and housing markets in the next 2 years! I wish I did know, I'd make a fortune!
I think the main thing to ask yourself may well be whether you can afford a mortgage should there be an interest rate rise. For this reason, it may be sensible to wait until you have an income to buy.
Thanks Whisky for replying. I currently pay a mortgage and I can afford 60k up to 9% interest. Still cheaper then rents in my current area. Just wanted to know what others may do in this situation.
I wouldn't go for option A but that's because my DM tends not to offer to help unconditionally...
For the falling market it depends if it falls by the same amount in both the new and old area or if it could fall far enough for you to be able to obtain a new property closer to current area iyswim.
Other factors to take into account:
which area would it be easier for you to find work?
would salaries be lower in the new area?
how would general living expenses vary between areas?
As you have a large deposit (from old house) and only need a small mortgage, I would recommend going via an independent mortgage broker rather than through a bank or building society for the new mortgage.
I would go for option B. option C does not look good to me as it would be easy for it to end up costing you a lot of money if you had a bad tenant. Option A is OK but the advantage of option B is that it gives you the opportunity to really get to know your new area before buying and also you will be in a strong position as a chain free purchaser when you do buy.
Option B. Gives you the most flexibility. Make a clean break and pocket the money from the old house, stay with family for a bit and then rent for a while in the area that you think you might want to buy. Also you will have a job by then so will be able to buy near your new job if that is what you want.
The other options are just hassle and complications that you don't need.
First plan of action is to sell your current house. This will probably take a few months and things may well be a bit clearer by then. When that is done then switch your focus to moving to the midlands. When that is done, then start looking around for a job. When you get a job, start looking at rented houses that would be suitable for the job. When you have settled in the job and can see yourself staying there then start looking for a house to buy.
One thing at a time. Focus.
I see a few more complex issues.
Is you Mum helpful and trustworthy? My Mum is and I’d be happy with option 1 in that she would be aiming to do the best for me in that arrangement.
Do you have a job to go to? Or a set of skills that make it easy to get a job? Can you work anywhere? Would it be useful to get a job first and then move close to it?
To me, the low risk option, from the perspective of house prices, is to buy and sell at the same time. But the job question makes that more difficult.
All in all,I would chat to some estate agents about how long the house will take to sell. If you allow a longer sale time will you get a better price? Chat to 3/4 estate agents to get advice on timing and price.
Thanks to you all. I only have my mum to talk to and she would like me to stay close but is supportive (but i think im boring her now though.)
Good points catslife I have not looked fully at living expenses in new area except house price, rent and council tax which are less, so i will look more into this.
Im highly educated but to be honest my ambition has got up and gone. Any job that is easy to get to and pays £8 ph or more will be good enough and ive costed out much higher interest rates at different income levels.
sprig1 and popchyk I think you are right about the hassle of renting out the house, seeing it down in black and white made it more clear.
Popchyk really logical steps, i think im too close and wanting to move so much that im not thinking critically enough.
Iwantawhippet i have estate agents booked for end of next month, im just doing the last few jobs around the house.
Lots of food for thought.
Are you on any benefits that would be affected by you having the equity in your house as a savings pot, rather than tied up in the home?
I would go with option A. Sell now, before prices have fallen that much. As you are moving to a cheaper area, I’d probably buy straight away while the interest rates are low and you can get a good fixed deal.
Option C might be a non starter as you’d need to factor in paying income tax on the rent. The rules have recently changed to make it more difficult for landlords. I also feel like your position would be too vulnerable to risk nightmare tenants.
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