to not know what to do regarding moving house

[whatstheworstthatcanhappen1]

So bit of background we bought our house back in 2007 and paid over the odds, first time buyers, young and rushed into it due to excitement. Within 3 months the market crashed and house value lost about 10k.

The house is 2 bedrooms and we now have two children, boy 9 and girl 3. i am desperate for them to both have their own rooms and it's been a dream to try and save for a deposit to move house. We currently struggle monthly due to childcare costs so no spare cash.

Anyway last Sunday I won £10,000 at bingo. just don't know what to do, do we use that as a deposit but may struggle to pay for other costs of moving or do I use it to put a stud wall up in our room to create 2 small rooms? could also pay debts off too to make things more comfortable on a monthly basis?

I feel if we don't use it to move we will look back and regret it.

Possibly have about 2k equity too.

you need an expert opinion, estate agent, mortgage advisor etc....work out what costs will be and how much you would get for your existing property before you decide what to do....put your house on the market to see if there is any interest....some areas houses go quick, some can be on the market for years...if you put your house on market use an estate agent that wont charge if it doesnt sell or if you decide to change your mind about selling...congrats on the win!

specialsubject I only go to bingo when have free tickets. so about once every 3 months. I got free tickets for my birthday so only spend £1 that night. Don't think I will go back now anyway.

I think deep down I do want to move so will start looking into that. How does the mortgage part work, do I see if I get approved first before making an offer, how long does the approval last? long time since I did it before.

It's a no brainer. You won't see this kind of money again, so use it to move. Chipping away at debts is something you can do in your day to day life, once childcare costs are lower, and putting up a stud wall will waste your money.

Normally, £10,000 wouldn't make a much of a hole in all the costs, but given that house prices are low where you are I think it might just be enough. Look into online estate agents for a start - that saves a fortune, as long as your house is reasonably easy to sell. Removals you can do yourselves, or just get a man with a van. Legal fees and deposit are the big costs, but if you can put down 5% you might just manage it all.

If the online affordability calculators are showing you could comfortable expect to borrow what you need, and you've included all debts, childcare costs etc then I'd look to move.

I can't imagine a room divided in 2 is going to give you suitably big bedrooms unless the original room is massive.

At the price you're looking at there's no stamp duty, EA fees can be 1% or lower so it an solicitors fees and surveys should be less than £2k.

What about a loft conversion?

How does the mortgage part work, do I see if I get approved first before making an offer, how long does the approval last?

When you list your house with an EA, they will recommend their broker. It's free for the initial consultation. (Basically like the EA, if you don't use the service, it's free). So there's no harm getting an EA out to value your house. And then when you list it, go and see their broker.

You can't offer on a house before your sold yours. At least not where we are. Houses sold quickly and no vendor will wait for a time waster who aren't proceedable.

I'm assuming you did include debts and childcare and fixed expenses when using the online mortgage calculator.

headdreamer I did include debts but was a basic one and didn't ask for living costs. just salary and debts.

I would strongly recommend NOT using the EA broker. They are not usually whole of market and are often not very good.

A whole of market broker will give you an idea of what you can expect to borrow and who to apply to once they've seen your financial situation.

The time an offer lasts varies from lender and is usually 3 to 6 months.

You usually need to get an mortgage offer in principle at the same time as making an offer on a property as the EA will check you are able to proceed with an offer but I'd find a property first- decision in principles can be obtained almost immediately so there's no point in getting one before you've even seen a property you are interested in.

OP, the Nationwide online calculator is more comprehensive and asks about childcare etc. living costs are a massive factor in what you can borrow as, unlike when you bought in 2007, lending today is all about what it is deemed you can afford.

It was about 5k for all the fees/costs once we moved. That was estate agent fees, solicitors fees and actual moving costs.

When we were renting - we got the mortgage in principal first - after a quick look on line and in papers to gain idea about how much houses we could afford.

Last time we had to sell our last house before we could move - like you the prices crashes so we lost money but because we'd had a repayment mortgage on top so still had equity to use as a deposit. That time we had to wait till a we accepted a firm offer then get a mortgage in principal agreed - then did looking round houses - though we'd been looking on line for ages waiting for the sale to happen.

What's the interest rates on the credit cards? It wouldn't be unusual for it to be over 20%. I'd pay them off and then look at the situation again and see if I could afford to move.

Could you extend into the attic?

Oh, you lucky thing! We are in almost the same boat as you, although four not two kids.

I'm not sure what I'd do, £10k is probably cutting it a bit fine with all the other costs.

Speak to an independent broker and see where you stand. If you can't use the money to move, work out the best way to pay off debts and set up a budget that will get you where you want to be as soon as possible. I would wish you luck, but you clearly have that in spades. :)

Just research the cost of everything before you commit. Spend some real time doing the sums, shopping around for solicitors, estate agents and so on. The cost of moving will eat a big chunk into your £10K so be sure to take that into account.

TBH if you can't pay off your current debts I don't think it sounds like you are in a positon to move house and buy a bigger house. £10k + £2k equity less solicitors fees, estate agent fees and other associated moving costs isn't a lot to step up with.

I would pay off the debts, get a stud wall up and get your financial situation back on track re no debts.

I'd go for the bigger house. Try and get a fixed rate so you won't be hit by rate rises too soon. And what about extending the length of your mortgage so the monthly payments are lower. I used to think this was a bad idea but coming round to the view that it's the only way for a lot of people these days. You can always pay off a bit more in the years to come if finances improve. Try and clear the debt on credit cards as the interest rates are high.

On the other hand, if that lump sum gives you a ready made deposit and it is the only way you will ever get to move, I would look at a whole financial restructure: check the actual costs of moving, new mortgage costs then look at consolidating debts, get mortgage, move --> new start.

If you end up with no extra debt it will be worth using that windfall as the impetous to make meaningful changes.

pay off debts starting with credit cards which probably have the highest interest

use some of the money for something fun/ nice

Clear your debts first. Paying the minimum payment each month is not sustainable and will effect your ability to get a mortgage offer on your new property.

In money management always clear debt before anything.

I am not sure if you can easily get mortgage if you owe money on cc.

Let say if you paid all of those cc cards how much money will you have left from your 10K? Also how much would you have by not paying interest rates you are paying now?

so if I cleared the credit cards would probably take about half of the money and leave us with an extra £130 a month.

I just don't want to miss the opportunity to move and have that much in one go when once my daughter is at school we can clear the credit cards.

I would write all your outgoings and terms of current mortgage + outstanding debts.
Book a visit with a mortgage broker and see how much money in mortgage you can get.

then you will have figure to think about and see if this fits in with your budget.

good result on the bingo!

now clear the debts and look at cutting costs/increasing income so you can get what you want. Fun comes later.

usual stuff; no new clothes for adults, no buying books/mags (library), compare and cut energy and insurance costs, minimise car use, efficient driving, etc etc etc.