to ask what would you do ?

[bumbojumbo]

Looking to split with H. We would have to sell the family home. Once the the house is sold, would you :

1. Use the equity to buy a (smaller) and potentially slightly run down house in a shitty end of town. There would be little/no money to do the house up. It would mean I would still be a home owner in the longer term. The mortgage payments would be cheaper a month than renting. Life would be v tough in terms of spare cash each month.

or

2. Use the equity to top up renting a decent house in a better area of town, close to my sons school. Being able to walk to school is a priority for my son. Renting would cost more money than a mortgage and the house would never be mine. I would pay 80% rent from my salary and the rest from the equity. I would never be a home owner again (I'm 45) as I would have eaten into the equity. In addition, I would (carefully) use the equity to generally have a 'nice life' for me and my 2 DS (11 & 14) until they are adults and then go off to stand on their own 2 feet.

My answer would depend entirely on where I was with my retirement plans. Could I afford to rent for the rest of my life, keeping in mind the costs of rent increases and the potential of needing to move if a LL needed to sell up.

If the answer is no, then I would be aiming for home ownership.

In longer term plans, I stand to inherit all my parents house (owned outright, current value £550k) when they pass. I am the only child and am named in the will. God forbid it should happen sooner rather than later, but inevitably it will happen at some point. As morbid as that is. Some of the cash from their house would be used for my sons future, some for my own retirement.

Don't rely on the inheritance- if either one of them needs care in their final years, that money is gone.

I'd go for the cheap house, be a home owner and work towards improving my income / reducing outgoings in the interim.

Are there any opportunities for advancement in your career or other earning opportunities you might consider?

For me it would depend on how run down the area is and how accessible places like school, family, friends are. If it meets these needs and you can afford a house why pay rent it's just wasted money in another person's pocket.

Or do what a friend did, she bought the house in a run down area and paid a huge deposit towards it and got a buy to let mortgage and set a very small amount of monthly repayments on it, she then rented a house in a nice area. She used the money from her own rented house to pay her own mortgage and used the rest of the money towards the house she rented, If that makes sense. She got best of both worlds but you would need financial advice from a broker.

Thr first option op. Security is important. And you can’t rely on inheritance.

My Nanna had to sell her home after my Grandad passed away to go into care and due to her having money from the sale in the bank, she pays £900+ a week. She only has about 20k left so please don't rely on inheritance.
If you're primary carer, you should get child maintenance from their Dad which should help make things less of a struggle.

I agree with others, don't rely on inheritance as care fees will whizz through any equity fast.

Personally l would buy regardless of the difficulty, l would prioritise a secure home above all other considerations. If money is tight l would be looking at ways to increase my income.

"Or do what a friend did, she bought the house in a run down area and paid a huge deposit towards it and got a buy to let mortgage and set a very small amount of monthly repayments on it, she then rented a house in a nice area. She used the money from her own rented house to pay her own mortgage and used the rest of the money towards the house she rented, If that makes sense. She got best of both worlds but you would need financial advice from a broker."

If your financial situation would allow, I'd do this.

Never live in a shit part if town, everyday there's posts on here about wander neighbours etc, said wanker neighbours are invariably worse in shit areas.

An absolute shit hole in a decent area can be sorted over time, sorting a shit area out will always be out of your control.

In your shoes I'd look for complete dumps in decent areas before considering renting

You cannot rely on inheritance. If they need care in the future the house will have to be sold to pay for it which leaves you with nothing.

Buy a house. It will give you longer financial security and if you do end up inheriting you can then either sell, rent it out or help your son onto the property ladder by passing it to him.

@Watchingyou2sleezes

Never live in a shit part if town, everyday there's posts on here about wander neighbours etc, said wanker neighbours are invariably worse in shit areas.

An absolute shit hole in a decent area can be sorted over time, sorting a shit area out will always be out of your control.

In your shoes I'd look for complete dumps in decent areas before considering renting

My parents live in the "naice" bit of town and have far more wanky neighbours than me who lives in the shitter end of town. But nice bigotry there

I'd be content renting as long as it was 100% affordable from salary (and child maintenance). Slightly outside the area your House 2 is, would that take rental costs to 100% from your salary?

Once the boys are up and out, you wont be tied to living next to their school so can then look to use the equity for something somewhere else.

I've done the option that @Drivingbuttercup suggested. We own a house in a less desirable part of town and rent somewhere else. Over the past 7 years the value of the house has increased considerably and the rent we earn goes towards the rent on the home we live in. Try looking at the long term investment because house prices are rising everywhere.

I'd buy the house

I would go with the rental option. Your dc will already be dealing with a lot of changes. Remaining in the same area, near school, friends, and family, would be my priority. You also have the back up of a landlord if something goes wrong in the house, rather than potentially scrabbling for ££££ if eg the boiler packs up.

Option 1. You can’t rely on that inheritance. If you have no other plans for retirement then or would be a bad decision to use equity to top up rent. You’ll eat through it and have nothing left for retirement. Buying something small is a sensible option.

OP's parents would need care homes for ten years to get through half a million. Which is longer than the average stays tend to be. Even if they both needed them for two years, that's around £200k.

Obviously we should never rely on inheritances for a lot of good reasons, but it seems likely that she would inherit something from them which would help her situation. Of course it could be years and years before this happens (hopefully so).

I'd go for the mortgage in the expectation of my salary increasing over the years and a bit of help eventually from your parents. Despite all the MN horror at factoring in inheritances, loving parents want to help their offspring and it gives them comfort to know they are leaving something to their children and their families. Sometimes the trouble is persuading them to splash out on their own spending and not put too much aside.

In the past, I reduced my choices to 2 properties

A
Larger property with garage
In a worse area

B
Much smaller, no garage
In a much better area

I bought B & never regretted it

There are very few times in life where you may receive a big chunk of money
Buy in a good area, widen your search

I agree that inheritance is not guaranteed & your parents could live to 100+ !

But. I know many couples who split and then fall off the home owning ladder and it is so difficult to get back on.

I’d go for option 1 or possibly even a smaller place in a slightly nicer area.

If you do get inheritance you can move at that point. If not you have a property and won’t be facing ever increasing rent as you age.

Post divorce I did option one. Or close to option one.

But the shitty end of town here, is actually very quiet and low crime. The better end of town is where the drug raids/ car crime/ muggings, burglaries have been. This end is seen as the shitty end because its terraced with decent gardens, bearish the town centre. Not detached and semis with huge gardens and a more rural setting. But when you look at it, is actually not.

So I suppose it depends in how shitty, the shitty end is.

Also it was actually closer to my sons school and not far from what will be is High school.

I have a tiny mortgage so plenty of spare cash, which makes things infinitly easier.

Please don't rely on inheritance. I should I herit, but forms no parts of my plans.

In your case, I would say take sometime to decide. It sounds like no option is perfect for you. You maybe able to find a compromise between them.

Number 1 100%.

Buy the property. Your security means more. Renting means that's the end of your home ownership dreams and really how long can you afford to private rent with rent increases etc. When your sons dc have taken flight you'll still need to rent. Buy a small place - as time goes by make it your project. That's also an asset for your kids one day whereas renting isn't.

But again it depends on what the 'shitty' end of town actually means in practice. It's relative.

3. Get legal advice first and a house evaluation so I have an idea how much money I would be looking to come out of the divorce with.