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Original poster

get off the property ladder - or stay in a house that's unsuitable?

25 replies

bohemianbint · 16/06/2009 13:26

this is my first post in this section, will try to keep it concise as it's a bit complicated.

We currently live in a 2 bedroom Victorian terrace with a fully converted loft about 2 miles from the city centre.

We want to get out of the city and get a garden as we have two little boys - it drives us all scatty not having any outside space and the area we are in is going really studenty. We are hoping to relocate to just outside York and had had an offer accepted on a house.

We have two problems; first that it is taking DH ages to find a new job. We're still waiting to hear if he has an interview near where we want to live but it is dragging on and on. Secondly, the bank just told us yesterday that they won't approve our mortgage (after saying the other day it was fine) due to the amount that DH has on credit cards. They wouldn't even re-lend us the amount that we are currently mortgaged for, IYSWIM.

So, we have two choices. Stay here, in an area we don't like and don't want to be,in a house we no longer fit into with no garden and be really unhappy about it.

Or, we sell, clear the mortgage and pay off DH's debts. This would free up £300pm that currently goes to repayments. We would be left at the end with around £10k to put towards a deposit on a new house when we find one, or when DH can get a new job and we know where we can look.

On paper, it looks like a no-brainer. But are there risks to getting off the ladder, there must be; what if the market goes up and we can't get back on? What if banks won't lend us the money when we are in a position to buy?

Sorry - am just trying to straighten my head out and decide what to do for the best, we have sold our house and they are quite keen to move in, so we either rent or stay put. In a way it should have been a disaster, the mortgage news yesterday but actually it's almost a relief as it was so stressful having everything balanced so finely and having no control over it.

Is anyone in a similar situation, or have any thoughts? Sorry, bit waffly, the stress is mangling my head.

OP posts:

MrsTittleMouse · 16/06/2009 13:32

A couple of thoughts - would 10k be enough deposit? There still aren't a lot of mortgages to chose from with a low % deposit. Also, will that 10k have to pay your moving costs? We will have to pay 9k stamp duty alone.

Original poster

bohemianbint · 16/06/2009 13:54

see, this is something that worries me. It might not be. Apparently the Nationwide have started doing 95% mortgages again this week and we won't be buying anywhere that over the stamp duty threshold (unless we come into some more cash!) but yes, I don't want to find we've shot ourselves in the foot.

Also really don't want to stay here. It's driving us mad.

Aaaah. It's so difficult - if house prices fall further it could really work in our favour. But we are not economists and I'm wondering if we should stop trying to second guess what might happened and do what makes our quality of life better.

I suppose if we are renting then there is no chain and we can up and off as soon as DH gets a job. That would be an advantage.

OP posts:

foreveroptimistic · 16/06/2009 14:01

You will never get a mortgage with a £10k deposit. We are in a similar situation and have decided to stay put. House prices will not fall further, in our area they have already started to rise, a few houses around here have actually increased their asking price. You are in a desirable area if you move into rented you could end up being priced out of the area altogether.

FairLadyRantALot · 16/06/2009 14:02

personally I think I would wait until you know where your dh will be working and things...and than get the hosue on the market /look for another....

if he has a job in the pipeline, it mihgt not be all that long that he finds out eihter way...

not much help, sorry!

krugerparkrules · 16/06/2009 14:23

would it be possible for you to rent the place you are currently buying, and then using that rent money to rent somewhere else?

Original poster

bohemianbint · 16/06/2009 14:25

problem is we've just had to pull out of buying that house. I suppose we could look into binning our sale and renting this place out, and then renting ourselves, but that might be a mega pain in the backside.

Hmmm....

OP posts:

Tinker · 16/06/2009 14:26

How old are you? Would you still be able to get a 25 year mortgage if you needed one?

Original poster

bohemianbint · 16/06/2009 15:01

DH is 36 - would be in his name...

OP posts:

Original poster

bohemianbint · 16/06/2009 15:09

Actually, I think the renting this place out thing would be a total non-starter. Would need to get enough rent to cover the mortgage- which we might, but if there was ever a month without rent we would be done for.

I'm hoping we'll hear if DH has got an interview today, but we have been told "today" for the last two weeks. It's so tedious.

I know £10k isn't much but we'd be out of a chain and able to move at the drop of a hat. We really need to get out of the area asap for a number of reasons, not least that we need to start getting DS1 into a pre-school and I don't want to do it if we'll have to uproot him again.

Plus the thought of clearing DH's debts is tempting, as we're just scrimping by at the moment, and without those debts we'd be a lot more comfortable.

It's so difficult! But if it's possible to get 95% mortgages again, we'd have 10% of £150k, which is more than enough for a decent house where we're looking?

OP posts:

thehairybabysmum · 16/06/2009 15:17

Can you just transfer your current mortgage to the new property and not upsize IYSWIM. Have you seen somewhere?

I live in York...happy to help with any local info.

Original poster

bohemianbint · 16/06/2009 15:22

Nope - we thought we could, but you still technically have to re-apply to port the mortgage over and they will only lend us £100k. Have just sold this house for £140k.

Thanks for the offer though hairybaby! We had a house lined up in Pocklington, was really looking forward to moving there...

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noddyholder · 16/06/2009 15:24

I would do it.We did and it really worked for us when we bought.Rented for 15 months and really got a bargain.

noddyholder · 16/06/2009 15:28

Btw I do think prices are having a bit of a bounce and they will fall a bit more.If they were anywhere near to stabilising mortgages would be becoming easier to get but according to a friend who is a broker he has been told interest rates are set to rise significantly over 18 months a a further 10-15% off prices is not impossible.My parents are moving and we saw an indpendent broker yesterday so it is current info.HTH

Original poster

bohemianbint · 16/06/2009 15:28

Really Noddy? The no-chain thing must help from a bargaining perspective?

I would be quite good if this recession is going to be "w-shaped" as some are predicting, as in the current rise will be followed by another big dip. But then again it might just be "u-shaped". I dunno, am no economist. But I think we need to put our quality of life first, but without being reckless.

I drive myself mad thinking things backwards and forwards. Bloody Libran tendencies.

OP posts:

noddyholder · 16/06/2009 15:29

Can you rent in the area you like?

Original poster

bohemianbint · 16/06/2009 15:33

we could - that would be the ideal, and would be good to "try before we buy" too. But again we can't do that until the job comes up, and it's such slow going. DS has 15 years of experience, has applied for over 30 jobs in the last 2 months and has heard exactly nothing. Scary stuff.

OP posts:

noddyholder · 16/06/2009 15:36

That is scary.We have a close friend similar.He has ahighly specialised job and is usually top of the list of candidates but was on contract til sept and sure he would get the position full time and they took someone younger and cheaper and not as skilled!They are in the middle of a move too

Original poster

bohemianbint · 16/06/2009 17:32

I feel awful - the estate agents for the people whose house we just pulled out of are desperate to see if we can come to some sort of arrangement. It's so sad, the house is perfect, the people who own it are lovely and it's £7k cheaper than ours. And we can't do it.

OP posts:

willali · 16/06/2009 17:41

FWIW I would not do anything until the job situation is sorted - that is key for the rest of the situation. At the moment you have an asset (your equity) in what may well be a slightly rising market. You would lose that asset and potentially be without a source of income also if you sell up now and just rent. I think you are being over optimistic about the availability of a 95% mortgage also given your DH's debts which will show on the credit reference (as well as the fact that he has been refused a mortgage as you describe)

Original poster

bohemianbint · 16/06/2009 18:57

will thing is though - by the time we applied for a mortgage he'd be debt free with a £13k deposit. And the money being debt free would free up could be saved while we rented and we could (in theory) turn that deposit into £15k in 6 months of renting if we don't spend the extra money we'd have, IYSWIM. We wouldn't be without a source of income though, there's no way DH would leave his job without another to go to...

OP posts:

Original poster

bohemianbint · 17/06/2009 10:46

I think I'm going to make a list of pros and cons and see if that helps...

OP posts:

somewhathorrified · 17/06/2009 11:06

Personally I would stay where you are atm, make do, take the boys to the local park. It has to be annoying, but the economy is not stable and it is not in recovery, despite what the govt are telling us. The blip in the housing market is a normal seasonal event which is excentuated by people removing their moneyfrom banks and investin in auction properties, so don't be decieved. The key to recovery is employment and that's still spiralling down. If you take youself off the housing ladder now, the gamble is a bit like taking your security and sticking it on the horses, you could win, you could lose.

titchy · 17/06/2009 11:29

I would sell and rent for 6 months. Save like mad, and start making offers agin round Christmas - no-one is house hunting then irrespective of what the market does and you'll be chain free which will help. Do make sure you have a 10% deposit though, no debts and don't ask for more than 3.5x salary mortgage.

titchy · 17/06/2009 11:30

How much os the house you want to buy? Is it worth offering £110k?

titchy · 17/06/2009 11:30

Or buying it with a VERY long time between exchange and completion? Like a year?

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