no money, no deposit, no equity any advice please

[tryharder100]

Hi,

Really need some advice as have no idea what we are going to do. We bought our house in 2007 when prices were very high. Within 6 months we had lost 10,000 as market crashed.

didnt stress too much as house was fine longterm, 2 bed terrace hpuse and jyst me, dh and ds. Fast forward 8 years we now desperately need to move. Have ds 8 and dd 3 and they have to share small room. We have outgrown this house, everywhere is so cluttered and have no room for anything and its really getting me down.

we have no equity, no spare money at all to save a deposit of any size and i am so worried about what to do. Credit rating is poor too so not hopeful on getting a mortgage if we ever managed to save a deposit.

any advice is really appreciated

you're not alone and plenty before you bought in a peak, as will plenty after you.

renting another and renting this out is almost certainly not going to work. Find out what your place would rent for, knock off 20% for fees and insurances, remember that the tax break on BTLs is probably about to go, allow extra for fixes, voids, maintenance - and then see if you have enough to rent a bigger place elsewhere. I doubt it. Especially with a poor credit rating.

declutter and look at serious cutbacks and paying off debts/increasing savings.

they probably cant afford an extension i'd have thought?

It's just she said 'extending not an option as mid terrace' so I thought I'd point out that that doesn't actually matter.

For the kids room, could you save up a bit and get a sturdy mezzanine bed built? this way your eldest could have 'upstairs' and youngest a den and bed 'downstairs. There are all sorts of clever storage solutions that you can add for these too so you could incorporate storage for all their 'stuff too so you'd need no extra furniture in the room. Also consider having a high sleeper yourself and moving into the smaller room and putting your stuff underneath.
Use every inch of space, shelves above doors, storage boxes with lids slid under beds etc.
Declutter anything you really don't need.
Carboot seeing as the weather is so nice?

kvetch15 I'm not looking for sympathy just advice. There was no way of knowing the market would crash just trying to do best for my family.

We both work full time so unable to extend hours. things should get easier when youngest goes to school and no childcare fees.

Thank you for everyone's advice I am going to look into all of it.

Do you not get help with childcare / free hours?
Because if you are over the threshold to get tax credits surely you can afford to overpay on the mortgage?! I would love to only have a £500 mortgage! I get tax credits and my mortgage is double that, we still manage (just!) (I left abusive ex before anyone judges me for ending up in this tight corner)

Colleague of mine moved house recently it cost over £10,000 - This was a mortgaged house move, that is the reality

If you add everything up, solicitors fees, moving van, surveys, new mortgage fees etc

I would suggest

Serious declutter. sell on Ebay, Gumtree, carboot sale, give to charity shop
Build shed in garden to store or use garage or loft
Loft extension
House extension
Maybe change one of your living spaces into a bedroom eg dining room
I would not suggest storing "stuff" in a rented storage centre, because that is dead money
New or second job

I don't see the issue with kids sharing tbh. You just need to majorly de clutter.

Eldest maybe use your bedroom as a place to chill during the day

We have a 1 bed flat with 2 children. It's fine. You have too much stuff

"We have around 90,000 left to pay on the mortgage and if sold would get around £85,000. House purchased for 99,950. We could find a 3 bed for 90,000 so wouldn't need a bigger mortgage just a deposit."

So your 5k in neg equity plus selling fees? that's not to far off - if you could save up 6.5k in the next year or two then you would be breaking even and could rent a 3 bed.

Or look into the possibility of an extension.

Loft extension is probably your best bet...as a minimum get it boarded out so in the short term you have more space. A proper conversion is prob £10k or so (although as a pp said, that's about the cost of moving) but if you're any good at DIY or have anyone to help you could do something more basic (giving you a loft room you could use as a 3rd bed but prob wouldn't be able to sell it as such, if that makes sense!) for a lot less.

If extensions are out of the question then I'd go for boarded loft/fixed ladder for storage - everything you're not using daily/weekly goes up there. And then get a nice big shed/summerhouse for the garden -properly weatherproofed that can be like a playroom and store all kids toys etc.

Then focus on overpaying mortgage with the extra money you have from the drop in childcare. It's not ideal for your DC to share but in a couple of years you could be much better off and in a position to move to somewhere they wouldn't need to - and still be a homeowner.

We pay nearly 500 a month childcare and get 120 a month towards this from tax credits.

I think we will decluter and stick it out till we can move house, wouldn't like to extend as would rather use that money to move house.

thinking of moving kids into our room and putting a devide up with book selves etc. There is a big cupboard In this room with a door so thinking of making a little den for my son so he has somewhere for his self.

For a room divider look at the ikea kallax unit. Get the largest one and it provides loads of storage and you can stack on top to ceiling to maximise space.

We were in the same position, we started by drawing up a budget - then toting up the various credit cards it made sense to consolidate these (and purchase a car needed for new job). We pay this off in 2 years time.

When the market crashed we had just bought (at peak) and the mortgage crisis hit when when our fixed term expired - by the luck of whichever gods you care for we got an amazing mortgage deal (0.5% above base rate).

We struggled, but we knew we needed to build equity (were in negative)- so we overplayed by £150 per month.

I am so so glad we did, five years on from the drama and we have shortened our mortgage term by about a month for every £150 overpayed and now have a substantial deposit to put on a larger property.

I would stick with your property, draw up a budget of what you can afford, get a new mortgage deal if you can and make a plan!

Good luck

Have you had a look at switching the mortgage you already have. Interest rates on mortgages are lower now than they were in 2007. If you could get a 2 year fixed at a lower rate than you're paying now you could use it save towards a deposit.

I agree with looking at loft conversion. And also decluttering. No point in getting into serious debt. That will be worse than being short of space IMHO.

We've just got a 2 year 0% transfer for a credit card. Do you think this is possible with your credit rating? At least that way you're paying off debt not interest on your card.

I think you're doing the right thing re organising your home. I don't see what option you have really. You can't sell, or rent it out and you'd struggle to rent somewhere for yourselves (with credit rating problems you might need a big deposit to rent) so you need to stay.

We boarded our loft for relatively little money - just the cost of the boards and a few screws from B&Q, if you're handy on the DIY front. made a huge difference storage wise.

Hello. I sympathise. Have you had an estate agent out to value your house? Agree with the comments about boarding out the loft, if you can save up for that, then maybe your eldest could have as a bedroom of their own? It must be downheartening, but I'd definitely firm up the value of the property at present.

I'm like you in that I'd be reluctant to sell if I didn't feel I could get back on the property ladder.