What would you do?

[gntlover]

We have our property on the market but since Covid-19 we've obviously had no viewings. Since Covid we've had some changes to our finances due to becoming self-employed with job losses. We're already doing quite well albeit with some restrictions in how we work with the pandemic. We're pretty confident business will be good going forward.

However, we're not sure what to do with our current home. We had people interested to start viewings... As we've become self-employed we very much doubt we will be able to transfer our mortgage to another property as we've only just become self employed so haven't built up earnings history, as yet.

Options we see are:

1 - Sell house and rent - seems like a waste of money and we will be paying more in rent than we do currently for our mortgage.

2 - Sell house and buy a very small property to live in until we have built up earnings history and then go for another mortgage. This also means we wouldn't need to pay any mortgage or rent whilst building up the business. However, I have no idea how we would fit all our stuff into a very small house!

3 - Stay where we are and take house off the market until we have built up earnings history for mortgage.

We are late 40's with 2 young DC who would need to move school. We originally put the house on the market as we are not happy with the location we live in due to it being too remote. However, we don't want to mess around with kids schools too much by moving around several times over the next 5 years.

What would you do?

thanks for reading.

Stay put

Only you can decide but option 2 or 3 seems most sensible. Don't throw money away on rent.

I would take the house off the market and wait until you know how much you will be able to afford. We're selling as I'm moving for work, but don't want to disrupt with school moves more than once. Plus, if I didn't have to move id wait until the market has settled again.

Any move will cost money, there doesn't seem to be an urgent reason for you to sell straight away

1. No point buying a house you know from the get go is wrong and paying stamp duty on it.

I'd stay put, build up earnings history, save a bit more and then buy when you're able to.

I would stay put too. If you buy a smaller place that won’t be right either, so you may as well just deal with the inconveniences you have now rather than swapping them for new ones.

Stay put

Stay.

Stay, without a doubt.

Hmm... I would be inclined to go with 2 if I were in your position. It sounds like you could cope in a smaller place, but would just need to declutter a bit? That could be quite healthy? It can feel like a lighter load.

Also, 2 because having no mortgage is a really advantageous position to be in if there might be a recession etc. Your self-employed business is doing well now and that's great, but the nature of self-employment is that it can become unpredictable and you don't have the fall back of employee benefits (sick pack, holiday pay etc.).

So, 2 or 3.

"3 - Stay where we are and take house off the market until we have built up earnings history for mortgage."

I think I'd stay put in the bigger house. If it's in a rural location it is probably one whose value will hold better.
It will cost you to move and although mortgage free you will have lost the 'credit worthiness' that is implied from having a mortgage (as long as you are paying it off). I think in 6 months or so we'll have a better idea of how things are going and then might be a better time to make a decision on moving.

@sbplanet

That seems most obvious but OP @gntlover has also said they need to move for dc's schooling and because they don't like being too remote.

I see what you mean about the 'credit worthiness' but there are other ways to prove that than a mortgage, such as a store card etc. (and they will still have the existing credit history as a good bit of historical data).

Both 2 and 3 are decent options. I agree that 3 would be simpler though. House moving is stressful!

@ChocoTrio I took the OP saying

"We are late 40's with 2 young DC who would need to move school. We originally put the house on the market as we are not happy with the location we live in due to it being too remote. However, we don't want to mess around with kids schools too much by moving around several times over the next 5 years."

to mean that the kids would need to move school if they moved house? But I suppose that it might also be a good thing to move to an area for good schooling. I'm still going for wait 6 months in choice 3. :D

I"d stay put. We've recently experienced the bank's new attitude towards lending and it's not good. The likelihood of getting a mortgage as a newly self-employed person is grim. And they are not lending the same kind of amounts either.