What would you do - stay put, move house or sell up and rent?

[jumpyjan]

What would you do in this situation?

Have a nightmare neighbour that has made our life a misery so would love to move plus house not suitable for us to have another child in.

But have debts that won't be cleared till 2009 so would find it hard to take on bigger mortgage at the moment.

Also in order to take step up and cover moving costs would need a mortgage that is bigger than I am really comfortable with and would prob have to spread over 25-30 years (19 left at mo).

Am sick of mortgages and house prices and considering selling up, paying off debt, putting the rest of the equity in the bank and renting for a year or two but not sure if this is irresponsible.

Also would have to pay mortgage company to get out of (v good) fixed rate deal if we sold up.

Arrrrrghhh - indecision. Been mulling this over for months and not come to any conclusion. I know we are lucky to be on the property ladder at all but I wish we could just move.

jumpyjan - have you checked out how much it would cost to rent where you want to live? Our rent is one third of the mortgage we would be paying if we bought our house. Do work out the sums for your particular situation before you dismiss it - it is simply not true that renting is always wasted money. In fact in many areas now it is a no-brainer. My neighbour (who moved in around the same time as us) has an interest-only mortgage and is paying several hundred pounds more a month than we are in rent. She's always going on about being on the all-important the 'property ladder', but she's just renting her house expensively from the bank!

Thanks for those websites fizzylemonade - definitely worth keeping an eye on.

Southutshire - have had a bit of a look at rental prices and I think it would work out about the same as our mortgage would be.

I had a good think about it yesterday evening and slept on it overnight but still keep changing my mind every 5 mins. DH is thinking of a career change at the moment and I am now wondering whether we should wait until things are settled in that area before we move. But like you say fizzylemonade - life is for living and I don't always want to be looking ahead thinking well in 2 years time we can move - I want to enjoy life now.

Don't sell up and move into rented. You will probably never be able to save a deposit and pay the rent at the same time, and will be stuck in the rental trap.
Have you explored the option of getting a second bigger house and putting your present one on the rental market. The rent will be more than enough to cover the mortgage on the old place, put the excess rent into a maintenance/slush fund for repairs and those times when you haven't got a tenant, and at the end of each year, use any excess to pay for Christmas or a months mortgage on your new place etc.
Remortgage your old place back up to 25 or 30 years to provide the deposit for the new place.
Then when the kids have grown up and flown the nest you have two properties to sell/choose from etc.

OMG - sounds like a good plan in theory but I would feel very nervous about renting this place out because of the neighbour problem. We could end up in a situation where the tennants want to move out and we cant relet it and have 2 mortgages to pay. Chances are the neighbour will be fine with new people but if he finds out we are still the owners he could cause trouble.

TBH I think the biggest problem you have is with the neighbour dispute. Because you have taken formal steps about it you really can't hide it from a potential purchaser - although I don't think you'd have to say anything to a potential tenant although morally I'd allow them to cut short any tenancy agreement if there was any trouble with him, which obviously wouldn't help you if you had signed a fixed term lease.

In your position I would probably put the house on the market and see what reaction you get about neighbour situation. If you could sell it I would and pay off debts and mortgage penalty and rent for a while. I personally can't see the housing market rising much at the moment so I would imagine that you could buy again once your finances were more stable.

Signed... Someone who has had three nightmare neighbours in the past and knows how unbearable it can be.

Thanks chop chop. I think it all does come down to the neighbour problem. There are other reasons that we would like to move but none of them are pressing so we could stay for a year or two more. I don't think he would be a problem with new people but you are right we would have to declare it so it could take a while to sell.

Sorry to hear you have had problem neighbours too - it can make life so hard cant it - you really need to escape from the problems in life when you are inside your own home but when you have a problem neighbour you just cant get away from it.

hanaflower - when you put it like that it does sound simple. Guess I am just worried that we would never be able to afford to buy again if we did that.

I think it comes down to if you can rent where your children are at school (if they are) then this is a possibility.

I would want to sell your current house and not rent it out as any problems with the neighbour are still your responsibility!

I look at property as a long term thing. We bought the house we are currently in to get ds1 into one of the best schools in the country. He started in September so we can now look at moving to a house we actually want (4 bed instead of the 3 we ended up in)

To me, increasing a mortgage is small potatoes. Me and DH rented for only 4 years, 2 properties. You cannot change them in any way and if you can it is money down the drain as it isn't yours and it can only be cosmetic, no extensions, ripping out bathrooms etc.

As long as the payments are affordable then I would always buy. We have been on fixed rates for years, we don't care if we beat the market (incidently we have every time, pure luck) we just want to know that X is the amount we will be paying on a mortgage.

Sorry, Jumpyjan just making it harder for you! Simple solution, hire hitman

Thanks fizzylemonade. Have spoken to lots of people who have gone for a big mortgage when they have had kids and they tend to focus more on the monthly payment than the overall amount of the mortgage. I think I am getting too hung up on the overall amount we are borrowing as tbh although it will be a big chunk of our income we will be able to make the repayments.

Lol re hitman - thats thinking outside the box!

Just want to add as well that having put up with this nightmare situation for 3 years, getting out and renting rather than jumping straight into buying might just give you some much needed respite. We had a problem neighbour years ago (nowhere near as bad as yours sounds, but still made life very stressful). When we moved out, we could have bought straight away, but made a deliberate decision not to, simply because of the risk of ending up with new problem neighbours. Our dispute with the neighbour was over noise - he used to sunbathe in his garden with his hifi outside turned up full blast! So even though we lived in a detached house, we were plagued by this guy's noise! The one big advantage of renting is that the responsibility is not with you. If any problem gets too much, you can cut your losses and get out quickly. It may not be the long term solution, but maybe you deserve some time to recover from your nightmare experience without having the hassle of buying again straight away.

If I were you Id look to move in the new year - buy and sell - dont rent.

absorb your debts into the new mortgage deal so you are starting form scratch.

i think renting would make you tempted to spend the money you have from your house sale which is a bad idea!!

check out what you can buy/where/if nice neighbours etc before you do anything x

Why don't you go onto the Fool website - dealing with debt and talk to some real experts. You will then see that putting the debt on the mortgage is a very expensive option indeed, and also encourages you to run up still further debt as you will have nothing on the credit cards.

FWIW, I think you need some serious guidance, as you strike me as being unsure about taking on more debt, but you are clearly unhappy in your situation.

fool.co.uk
Also, Money Saving Expert is a good forum for advice.

Good luck!

I've been in a similar situation in the past. If it's the right kind of property to rent out, then I'd suggest this:
put up a 'for sale' sign, not with an estate agent but as a private sale; put up 'under offer' and 'sold' signs after suitable intervals; put it up for rent with an agency - he need never know you still own it.