Advice on downsizing/moving to less desirable area for financial reasons

[yesterdaystotalsteps123]

Hi, I live up north in a desirable area, single mum, zero hours contract job and now panicking about impact of covid on my income. I'm lucky to live in a 3 double bed close to good schools and have equity. I'm mortgaged for next 8 years, kids both in secondary. Should I look in an area that's not as desirable so I can be near enough mortgage free? I'm just worried about..well everything, but don't know if I can realistically hang in in there for 8 years. Ex is no help financially (or any other way) thanks

Can you extend your mortgage term so your monthly payments are lower? Moving costs a fortune and moving secondary age children who are happy and settled isn't ideal - unless you mean not far away? Without knowing the ins and outs of your situation, I would try to stay where you are if you're happy there.

Thanks, yes I'd stay in catchment, that's a good point about moving costs.

I think I'd do it in your position if the kids stay in the same school but depends on how undesirable the neighbourhood is? Factor in; estate agent fees, stamp duty (if eligible), conveyancing on two properties, removals and the cost of setting up a new home ie; new carpets, curtains, plumbing in washing machine etc

I think on average it costs £10000 to move. I'd try and stay but extend your mortgage. I do get where you're coming from as the security of paying off your house, and have the corresponding amount to spend is priceless.

I'll book some viewings, I did get my house valued in January so have some idea, they still seem to be going over asking price where I live so that makes it hard to assess if moving will mean mortgage free when you factor in other costs. I don't have job security right now and with two kids I think at least we will have a roof over our head but if I sit tight, my job might pick up. But who knows? I don't really want to extend my mortgage although it's good advice because then it delays my ability to save even more and I'm late 40s already

And you don't know if it's a mistake until you've actually moved! Once I move out of this particular area I will be priced out and don't think I'd be eligible for another mortgage as my income is low and varied

Would you consider having a lodger in your existing property if things were tight? Look at the Government's Rent a Room Scheme. You can receive £7,500 per year in rent from a lodger and don't pay tax on it.

That's a good idea but no spare bedroom. Just viewed a house on for 20,000 less than mine was valued at, but he said there's lots of interest and there's opportunity for attic conversion so I'm thinking a builder will buy it. It's so hard to budget without knowing exact figures for what mine could achieve and what next could go for, because with 20,000 there's not much wriggle room with moving costs

I understand your worry especially since you are on 0 hours contract.
It would make financial sense to be mortgage free in your situation, but it would depend if you could purchase a property in a not so desirable area that you would all be happy with.
I think you need to tell us your age and that of your children. If you are young enough to retrain, are your hurtling towards 60 years? I think that would affect my decision.

I'm nearly 47, kids are 14 and 11

If you can extend your mortgage term, you’d probably be fine to survive on a low income for a short period, if your work dried up. In your shoes, the disadvantages of moving don’t sound like they’d be offset by the (potentially tiny) financial gain.

Can you not ask your lender for a repayment holiday? That way you can build yourself a bit of a buffer in cash in case you need it at a later date. Also in a couple of years time you can ask your kids for a bit of cash if they're still at home and working.

Diversifying work, trying to find something more secure and building up a savings cushion is less expensive than moving. Why not do that first, th n you can spend the extra earnings on funding a house move if you still want/need to? You can only cash in the desirable area once, it seems a shame to jump now when you are relatively close to paying off the mortgage.

8 years is such a short amount of time - don’t give up your lovely home if you can help it. Look at an extension, a lodger or something else.
Honestly I think it will make you miserable.

Bloody hell, early repayment fee for mortgage is £2314!! I had no idea, thought it would be hundreds not thousands, yet another thing to think about, unless I don't pay it all off I wonder if there would be a way of overpaying but not repaying completely

Sorry I only saw other replies when I posted for some reason. I do need another job which fits around current one, but obviously that's another hurdle! Or if there is no job to work around soon....I changed careers just last year so I know it can be done with a bit of luck....

In your position I would stay put especially for 8 years, your costs will outweigh any advantage unless you really go down a step, downsize, bad area etc. The recent situation has been unprecedented and banks have had to bend over backward to help, if you have a sensible credit history and your payment record is good if the worst happens get straight in to the lender for a mortgage Payment holiday Or extend your term even a couple of years could make a difference, and get any other help Availible, it makes more sense to be make every effort, even if it takes longer, to be mortgage free in a Nice area you like than to move to some dump and never be able to get back again

Whilst it may reduce your opportunity to save you gain more in propertY equity

We looked a few years ago and it would take us along time to make up the moving costs so wasn’t worth it in the end

Thanks everyone. I am worried about my financial future but also a part of me wants a fresh start in a new house but what I could see as somewhere to leave behind my bad marriage, my kids could see as another upheaval. And yes I could save a load in a crap area but as a single mother I want to feel safe, so the house I looked at today could potentially be 50,000 cheaper or just 10,000 depending on offers on that one and mine, so it's really difficult as obviously at the top end it would probably be worth the move but I would need to be at the stage of accepting offers to know and at the moment it's not even on the market!

I would do anything and everything to stay where you are right now.

How long have you been divorced/separated? Is this the previous family home?

The emotional return on investment of keeping your kids in the same home, school, safe/nice neighbourhood for the next 7 years is likely to pay off for them and you in both the short and medium term.

There are probably many numerous, smaller, money saving, money making and financial restructuring things that could all add up rather than the drama, stress, uncertainty of a big move.

Moving is so much money - your DCs are at an age where stability is really important (more so if their family has broken down) - the next few years will fly by and you could spend the time plotting a totally new chapter in your life that takes off once the oldest is 18. That’s not so far away and you may need to be implementing changes a couple of years ahead.

What does your post child chapter look like?

You could do lots of refinancing of the mortgage - so extend the term for as long as needed to reduce repayments to a comfortable level for now - then in a couple of years you can reverse this decision and shorten the term again - or just move and downsize at that time.

Yes I'm only tied to this area for 5 years until youngest finishes school, can't imagine they will move out at 18 for good like in my day, but you never know, another unknown factor. Post children dream life is writing a novel on the Shetland Isles while being self sufficient, but most likely juggling 3 part time jobs and 2 grown up children

I'd look at your work situation before moving to a less desirable area

Ask if you can extend the term first. Have you a downstairs room to convert into a bedroom to revisit the lodger option?

I wouldn't be beyond sleeping in your DDs room (give her the largest room) for a couple of years if needed to stay where you are.

Moving away from their school friends just puts more taxi work on you!

In 5 years you will have the freedom to move with fewer constraints they will be old enough to drive or take public transport or may have gone away to uni etc.

With lodgers you can do Mon-Fri for contact workers/students and/or short term contacts so you are not so “invaded”.