Should I sell my house to support DS at Uni and get rid of the mortgage?

[ThatMortgageDilemma]

I am a single mother, my child is going to university this Autumn. Given my salary, I know he will get the full student maintenance loan and extra bursaries but... having worked in the area of Student Finance and looking at the price of rentals in the cities he is likely to move to, I know that won't cover all the expenses even if he gets a part time job.

My mortgage deal is coming to an end so I am dithering between getting another mortgage or selling the house, pay the mortgage and move, mortgage free, to a smaller house. All these options could reduce my monthly expenses so I can support DS while he is at uni.

I am not married to the idea of staying in this area for the foreseeable (I think...). I love the house, it is a very desirable area in walking distance to parks, cafes, restaurants, great schools that I no longer need and the train station. My mortgage payments are relatively small, less than what I would pay for a room in a shared house, but it is a big period house, too big for me and expensive to maintain.

In my circumstances, what would you do?

1. Sell the house, pay the mortgage and buy a smaller house mortgage free in a less desirable area

2. Re mortgage the house for 3 years with an interest only deal while DS is at uni, then go back into a repayment mortgage at the end of the period or go by point 1.

3. Remortgage interest free for 3 years, ask for an extra £10000, change bathroom, boiler and do some repairs which will reduce the expenses the house causes me every year so the money can be used to support DS. Then sell for a higher profit when the mortgage deal comes to an end or go as by point 1.

4. Get another Repayment mortgage deal for 3 years which will reduce the mortgage payments by 15%. Then decide what to do close to the end of term. This obviously doesn't help much to support DS while he is at uni.

Yes. Really. love the sneering tone about a humanities degree btw
And I'll take the views of education professionals (at RG universities) over some mn poster 😁
Ds1 has volunteered in the community since he was 14. I imagine he will continue that during holidays.

Sneering? I have a humanities degree myself. DD is on course for one.

It's a hard world out there now, different from even when I went in, in the 80s.

Work during the course can show you have skills in time management, money management, recommendations from employment, vital skills in employment.

Why take everything so bloody personally? It's commonly done in other places and for people who don't have other options or those who want to combine the two to save/earn money and possibly make themselves more attractive in the world of work.

Ds1 has applied to study history - every teacher he has spoken to has told him not to get a pt job - he won't have time!

My son is doing a humanities degree at a RG university and his contact hours would leave plenty of time for a pt job.

Also agree with previous posters that the full maintenance loan should be enough for him to live off, unless he goes somewhere that has very high rental costs after the first year (presume he will be in halls in the first year). We just make up the difference between what my son receives, based on our income, and the full loan.

Take your time and evaluate things at length, OP.

@DietrichandDiMaggio

Ds1 has applied to study history - every teacher he has spoken to has told him not to get a pt job - he won't have time!

My son is doing a humanities degree at a RG university and his contact hours would leave plenty of time for a pt job.

Apparently this is sneering . My DD sees it differently. She wants to minimise debt and make herself as attractive as possible to potential employers after. As I'm from abroad, she's a dual national and understands a bit more about how things work there; to her, balancing work and study is an important component of the whole experience. But she's been working and studying for over a year now.

It was to me, too. Also, working, I met a lot of people I might not have otherwise. My student jobs were often just as much fun as work. I worked for the uni for 2 out of the 4 years. My own father was not rich and combined work with studies, as did many, including friends who are now very wealthy indeed.

It's not an option to be dismissed out of hand and could actually put a person at disadvantage later on.

I’d go mortgage free...

I wouldn't go for an interest-only mortgage, personally. Out of the options you list that's the one I wouldn't go for.

@PRsecrets

Ds1 has applied to study history - every teacher he has spoken to has told him not to get a pt job - he won't have time!

Without wanting to be a dick- he absolutely will have time for a pt job doing history. I don’t know anyone who did history who had more than 20 hours contact time a week. I did a more intensive course and still has time for two PT jobs (around 16-24hours per week depending on overtime).

Unless you’re doing medicine, engineering, nursing or other courses that expect lots of contact and study placements there’s no excuse not to get a PT job in non-pandemic times - and for most careers the extra curricular work helps with getting a graduate job afterwards.

This is true.

I did an engineering/STEM subject with a lot of practical and project work. I had more contact time that anyone I knew other than the med students.

I still worked 20 hours a week in term time and full time out of term time. It was hard work, but 100% possible and I got a 1st class Hons so did not impact my grades.

If anything it taught me to better manage my time because I knew I needed to spread my uni work out rather than rush it all at the last minute. So please don't worry about him wanting to work, just keep an eye on burn out.

I’m not saying he shouldn’t find a part-time job, but you need to be prepared that he might not be able to (due to covid) therefore he will need support.

I would downsize, not necessarily to support your son, but for your own benefit too. Maintaining a large house is a pain and if you don't need to that's a huge weight off.

I would downsize OP, for you - so make sure you get a nice property that you fall in love with. Being mortgage free is amazing!

The longer you wait to downsize the more cash you are likely to bank, and the loan sounds serviceable.

I'd hang onto it and maybe consider a Monday-Friday lodger once things return to normal that pretty much pays your mortgage entirely.

Mortgage free in a heartbeat for me! With a smaller (but big enough, I.e one spare room) home.

No mortgage, cheaper bills and lower maintenance costs.

In addition to no mortgage how much will you save on utilities, food, council tax, water bill if you are home alone and in a smaller house?

You would have enough to support your son, maybe top up your pension and have some fun?

I’d sell and buy a flat or something in a different but close area, no maintenance lots of freedom and more money for you

Having a lovely big period home is the be all and end all to a lot of people on mumsnet but if it’s just you with ds in the hols why bother with a big house?

My aunts just done this, sold a lovely massive Victorian seaside house and moved to the nearest suburb of a city in a flat; she’s rolling in it now and has a spare room for my cousin and a sofa bed for visitors, got rid of loads of furniture and general crap and free to live her life without expensive house to maintain on her own.

My 2ps worth.....

I’m not sure you can go from repayment to an IO mortgage. A lot of lenders have withdrawn those products.

If your term is due to finish in the next few months then I would firstly contact your lender to see if the IO option is available.

If not with them then I’d contact a mortgage broker who can have a quick look for you to see if any other lender will accept IO remortgages (like for like or with additional borrowing).

Until you know that you can’t really make a decision.

I’m not saying he shouldn’t find a part-time job, but you need to be prepared that he might not be able to (due to covid) therefore he will need support.

I wish more parents could understand that. I was supporting students during the last recession... the amount of kids who did or didn't get the full loan entitlement who had parents who thought they could manage by finding a job. There were simply no jobs!

With so many people unemployed you had professionals working in retail and cleaning jobs, there was hardly anything they could do, much less so flexibly. There were also people who despite being careful, they couldn't manage properly, sometimes the only thing they needed was for one of the housemates to move with the girlfriend/boyfriend and the other 3 or 4 get in financial difficulty, or for them to be assigned to do a placement a bit far out, or for them to end up with a nasty landlord, etc.

DS wouldn't ask for anything BUT, I would rather be able to have the option to contribute if he starts struggling. I have never mollycoddled him but I am not going to let him down if things do not work as planned. I know it is not as simple as "just find a job, all people do" especially when the economy is so affected by covid and so much competition for the meagre amount of jobs available.

But again, it is not just about him, I only need to have a safety net for him for 3 years, this is also about me taking the steps for the future I want to have now my son is flying the nest.

Thank you all for all your comments, they have given me a lot to think about. I spent last night looking at houses in rightmove and there are plenty in good areas that I would be happy to move to but, about 30-45 drive from my workplace. I would be very surprised if they ask us to go back to the office full time but I don't want to sell the house and move away just to find out next winter that we are required back at the office full time.

I was also discussing the possibility of borrowing extra money when I move the mortgage to another deal, to finally tackle the repairs the house needs. This would reduce the amount I have to spend yearly on nasty surprises which would allow me to save a bit for DS' potential eventualities but also, would make the house more desirable to hopefully attract more money when I eventually sell it. The nice thing of that is that if I don't use all that amount I can pay it back into the mortgage without penalties. If I do borrow extra money my monthly payment will be the same as what I pay today.

I went interest only when DS was a toddler to enable me to pay nursery fees. I reverted back to repayment when he went to reception. Doing this is a dangerous decision when you owe a very high percentage of the house, or when there is the risk of negative equity. But I was not in that position back then and I am not now either. That is why is still in my list.

The only reason I bought the IO mortgages up is I know that most lenders won’t do an IO on a residential property, even if you’ve had one in the past. IO is typically for BTL properties these days. There are exceptions, but they are few.

@ThatMortgageDilemma

Thank you all for all your comments, they have given me a lot to think about. I spent last night looking at houses in rightmove and there are plenty in good areas that I would be happy to move to but, about 30-45 drive from my workplace. I would be very surprised if they ask us to go back to the office full time but I don't want to sell the house and move away just to find out next winter that we are required back at the office full time.

I was also discussing the possibility of borrowing extra money when I move the mortgage to another deal, to finally tackle the repairs the house needs. This would reduce the amount I have to spend yearly on nasty surprises which would allow me to save a bit for DS' potential eventualities but also, would make the house more desirable to hopefully attract more money when I eventually sell it. The nice thing of that is that if I don't use all that amount I can pay it back into the mortgage without penalties. If I do borrow extra money my monthly payment will be the same as what I pay today.

I went interest only when DS was a toddler to enable me to pay nursery fees. I reverted back to repayment when he went to reception. Doing this is a dangerous decision when you owe a very high percentage of the house, or when there is the risk of negative equity. But I was not in that position back then and I am not now either. That is why is still in my list.

Sorry to have to say but have you spoken to your mortgage company or a mortgage adviser yet about the plan to switch to interest only?

The mortgage situation has changed significantly over the last 5 -10 years regarding this and lenders no longer allow you to just switch regardless of the LTV. Most have a very strict set of rules around either a specific plan to repay the mortgage being in place, pension lump sum,endowment (being on track and having latest statement) or having a salary of £75k + and a LTV of less than 50%..

It may well rule out a few of your options and make for an easier decision anyway !

What will he be studying? What are his prospects after graduating? You are very selfless to think of your son's education in this way

I managed it and many others did, too and wouldn't have expected parental assistance.
Yes there are privileged kids who would get money given to them to boost their 'fun' money but those parents were in a position to do so without having to compromise anything.
I'd just leave him to it, he won't suffer! It's all part of the experience.

OP you are similar to me I have one son probably going to uni next year. I think firstly take it easy and think long and hard about how you want your life to look spend time thinking where how what when in the last few months I’ve looked at houseboats at Kew, country cottages north Cotswolds, flats at Salcombe plus completely off piste lottery win penthouses in Fitzrovia. You are completely free no one else to consider bar you and your son part time - in your situation I would maximise your house income I rent out a room to a lodger mon-fri and sometimes air bandb when I’m away at weekends. Don’t forget your house will be increasing in value expediently at the moment take it easy and good luck it sounds like you are a great mum. Out of interest what do you see his potential monthly shortfall to be ?

I wish more parents could understand that. I was supporting students during the last recession... the amount of kids who did or didn't get the full loan entitlement who had parents who thought they could manage by finding a job. There were simply no jobs!

This time around, this is a bit different. Not a huge recession like last time. The pubs, shops, venues opening up = all our local ones advertising for staff because people that were working in them now have jobs in the supermarket , corner shop etc.
If he's sporty there's good payments to be had eg train to referee = regular weekend work well above min wage, or in DD1's case school other people's horses @ £20/hour was better paid than her min wage regular part time job.
If he's reasonably good with kids tutoring work is also lucrative - my friend's son was at the local grammar and ended up going to Oxford so able to charge a top rate for tutoring, but actually he was excellent with late primary/early secondary kids and just got recommended and recommended he had such a long waiting list and people still wanted him for the summer holidays.

The 'no jobs' problem is for graduates with no work experience looking to start a career, particularly those that left last year have found it tough. By the time he leaves Uni this most likely won't be an issue.
Personally I'd not do interest only, stick to repayment than it's less to pay later on.

I would consider carefully where I want to be for the next stage of my life with an adult, non dependant child. Consider house size, area, job market etc. If I could get a smaller property I loved and would eradicate a mortgage then I would do that as it would free up money, potential reduce outgoings in regards to utilities etc.

Have been considering what to do myself when my final children reach flying the nest stage.