To sell our home and rent while credit score improves

[happyclapper]

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?

Dont be sorry, to be honest we have a lovely life as a family but I just wanted to highlight how little control you have when you rent.

I think it would be a terrible idea to sell.

Obviously I don't know what condition your property is in but you might be surprised. They don't have to be amazing to let. It could cover your mortgage repayments and free up money for you to live in the place you want, without giving up your security.

You can't just rent out a property on a residential mortgage.

How feasible it is will depend on your lender- some will just charge a small for for a consent to let and others will outright refuse unless you change to a buy to let product.

It could be an option but the fact you were so pleased it's sold given the houses problems might mean it would be difficult/ expensive.

Personally, if there are more new build planned on the site you're looking at, I think you'd be bonkers not to wait until the default has dropped off and reassess your chances of getting a mortgage.

Your house may or may not get an offer at the same level as you now have but that's the risk you take.

You haven't said how far down the line your current sale is - could it fall through if the buyers discover the 'problems'

Ok bearbehind I'm no expert but dps mum and dad have just done exactly this, let their home and are renting to check out another area with a view to buy a second property, it wasn't difficult and they got it all sorted within a few months.

Dp also got consent to let on his house and it cost a few hundred pounds.

Not of this address's the fact that, for reasons too difficult to go into here, we are not happy living where we are and it is very tempting to go and live in a much more preferable place especially considering we are getting a good price for our house which we may not get again.

You may well find yourself very unhappy, moving from place to place every year or six months, inspections, not able to hang so much as a poster on the wall in a rented house.

I'm not sure you actually have that option, though.

You can take a new mortgage now, which keeps you on the property ladder, but it sounds like you won't get the rate that you want.

Renting would be a struggle, because of the default. Credit checks are standard. If you don't pass, you'll either need to pay 6 months upfront, offer a guarantor to be liable for your rent, or very rarely they drastically increase the rent to cover the risk.

You then also end up with the possibility of having to move frequently if you don't get the rate that you want in 6 months either.

Considering coming off the property ladder doesn't make any sense, financially or emotionally, is getting a mortgage at the moment possible?

I sold, rented then bought six months later. Worked brilliantly - went in as a chain free buyer able to move quickly so was a very popular buyer. Talk to letting agents about your ability to rent.

No possibility of a mortgage at all. Why would we be moving every 6 months. The landlord has bought the property as along term investment and we could have a year long agreement by which time the default expires. My DP could rent in his name as the default is in my name only.

Thank you PurplewithRed. That is exactly what our mortgage advisor said. We would have much better negotiating power as we would be chain free with a big deposit.

sockstealer it can be done easily in some instances but not others- as I said some lenders won't entertain it others are very blasé about it.

It's very relevant that you said it only took your DP's parents 'a few months'

In a few months the default will be very nearly gone so they'd be that much closer to being able to move without renting.

I think I am ruling out renting our property. It doesn't give us any financial benefit and creates problems in itself.

They'll credit-check every adult who is going to live in the house, regardless of whether they earn money/want to be checked/don't need to be checked.

It sounds like you've decided, so I'm not sure why you asked. Most people have said to hold on for 6 months.

You could be evicted every 6 months. It's a possibility. It's a relatively frequent occurrence now that rents are rising so much, because each time the property is let to someone new, they can increase the cost.

It's unlikely a landlord will give you a year long tenancy straight away- particularly if you have credit issues- they won't want to risk you not paying for that length of time.

its also unlikely you'll be able to avoid being credit checked- EA make additional money out of credit checking each adult tenant and, unless you outright lie and say you won't live in the rental property, they won't accept you without a check.

If you can pay 6 months in advance, which presumably you could with the equity in your house, the rental property shouldn't be too much of an issue.

Well I say a few months but that was with finding suitable tenants, finding a place they wanted to rent. They were renting theirs out at a high rent, so it took longer for tenants to come along, smaller cheaper properties can get snapped up.

Anyway it was only a suggestion which I thought might be a better one than selling up. Doesn't sound like the op wants to/is in a position to so all irrelevant really. I just thought explore all options.

InfinitySeven sorry but your first paragraph is totally wrong. Firstly you have to pay to be credit checked when renting and secondly you have to give permission I.e. apply to to rent a house. They can't just do it as it shows on your file and too many is a bad thing.

OP do what's best for you, stepping off the property ladder for say 12 months isn't going go suddenly mean you can never buy again.
I was in a similar position to you, we rented for 12 months in my bf's name mainly because we weren't going to pay two lots of £75 just have both our names on the lease (total rip off, it doesn't cost that much to check a credit rating) and also I wasn't sure of my credit history.

We've now bought and I do have a default notice, our mortgage is with a big high street bank (not a 'sub-prime' lender) so you may be fine especially if you have a good deposit and good history of paying your mortgage.
But if renting for a bit suits then as chain free buyers you'll be in a good position, we were and moved within weeks of offer acceptance.

You may not necessarily have to move every six months. People are just pointing out the lack of security you may get with renting. You can be beholden to the landlord when property prices rise and he/she considers selling in order to capitalise.

It happens.

Mimi I didn't suggest that they'd just do it randomly?

If OP wants to rent, she'll have to be credit checked along with her DP and any other adults. They'll pay for it, and give permission, but it's not optional. All adults are checked as standard.

I didn't suggest that they'd do it without OP knowing.

Bearbehind, OP doesn't need to lie, she just doesn't go on the lease. Ok so her DH could kick her out and the agents won't like dealing with her if there are any problems with the house but the former is unlikely and the latter not a huge problem.

Ok my apologies, because that's how I read it.
Only the person paying the rent has to be checked and therefore on the lease. Even if it's landlord preferred it's not the law. Agents will say its standard because they get a nice chuck of money which takes 5mins and shouldn't cost more than £10.

mimi you are wrong, not infinity

Unless you lie and say the man will be the only adult livng in the rental property, the OP will be credit checked by any reputable EA.

Secondly, the credit check is only a public record check. It doesn't show in the same way a search for lending does so having too many isn't an issue. It can see CCJs/ defaults and not much else.

It can't see all the prospective tenants credit commitments etc.

You can be a named person living in the property without being named on the lease as the tenant or the rent payer.

OP there are two types of credit check - the basic check that landlords and the like can carry out which only looks at public records, so whether you have CCJs, and the enhanced check which a number of major lenders and communication companies can run.
To see what yours look like sign up to something like checkmyfile.com
If you want to look at a mortgage for a property on the new development then go through a mortgage broker who is happy to look at your poor history.
Don;t be miserable where you are but get accurate information before you make a choice.
Good luck.

And if you are an adult, you'll be credit checked by the very vast majority of EA's.