Mortgage free down-size to a flat - would you?

[MrsBobDylan]

I'm not looking for advice on how to improve our financial situation - we have tried everything but it is what it is. We are sick of struggling financially.

We have lots of equity in our house and are considering downsizing to a 3 bed flat to become mortgage free.

Flat is in a more upmarket area but is first floor so obvs no garden. The block is four storeys high and ex-Council so good sized rooms.

We have 3 kids aged 7, 11 and 14. They can stay at their current schools so no upheaval there.

None of the kids want to move but I'm conscious they know we struggle for money and the stress that puts them under, although we don't talk in front of them and do our best to shield them.

I grew up with awful parents who had money. I have managed to provide a very loving, happy home for my kids but no money. I just want the best for them.

Wwyd?

I would go for it if I were you. For everyone’s overall quality of life. Skate park parks and camping all sound great. Loss of your yard will be hard but it sounds positive in all other ways ?

Would you consider moving areas, this house is £200,000 3 bed, nice area 5 minute walk to Primary school, 20 min walk to two secondary schools, 10 minute walk to a lovely sandy beach voted one of the best beaches in the UK. Hospital is 20 mins walk away, child development clinic is 5 mins away as is a busy high street with library, cafes, supermarkets. Good public transport links to nearby towns and Norwich.

There are other houses a similar price or less in the area House

The only downside is that there aren't any motorways and this is right on the East Coast so can take a while to drive across cou try though you can get a train to London in 2hrs.

@onlychildhamster I think the HA is ok - I used to work in housing. I would much prefer a freehold but I think it wouldn't be something we could afford.

I have just had a long chat with dh and we are going to view it tomorrow. I think we are both open minded and willing to consider it.

Haven’t rtft but I would avoid moving to a flat because you’ll have no control over service/ground rent/repair fees which are notoriously slippery to pinpoint before moving. You could find it ends up costing you more in the long run.

@HPandTheNeverEndingBedtime that house is beautiful and living by the sea is amazing! Unfortunately dh's work is in London and my middle child goes to a special school which he loves and we get respite though the County Council which we may not be eligible for elsewhere. My eldest son has two medical conditions and he has been with the same care team since he was five so I would feel nervous changing that too.

Sleeping in living room to one side my experience is the older DCS get the less they are fussed about having a garden if there is somewhere they can go outside with siblings / friends.

The other one practical point I would make is as DCs get older is they may prefer to have the living room free even even they have to share a bedroom if you and DH want a really early night.

So financial things are for you to decide and clearly good advice - have just tried to make a couple of practical points.

Hav done this - it's great to be mortgage free even with the cost of service charges in a flat. I have outside space too which I wouldn't be without.

@INeedNewShoes OP is in London from her most recent post. I am in London too and a 2 bed house the exact same size as my flat is 600k and £200k more expensive (£850 per month more assuming 25 year old mortgage and 2.05% interest rate). I understand its not the same in the north because the houses are so cheap and many of the flats are new build. Very big difference paying £1700 maintenance on a 400k flat vs a 100k flat. Moving further out doesn't even bring much relief as the commute cost of minimum £350 per month (from outside London) is still more expensive than the service charges. Plus its not like houses never need the roof replaced or drainage works etc.

is it near a good park or open space? that could make up for the garden
Have you talked to any of your new neighbours - that might help inform you as well

@INeedNewShoes oh and the £1750 service charge is per annum, so its around £150 per month.

I think it sounds a good plan.

We live in a flat with two older children (near teens now and teenage) and it is better as time has gone on- was more tricky when they were smaller really.

As they get older it is more about the location as they can be more independent really. It is helpful being close to things so they can get there themselves and home.

I think you’re being pretty sensible. Prices of everything seem to be going up, things are going to get worse before they get better. You’d be taking off some of the pressure. It sounds like a good sized flat, the children wouldn’t have to change schools. While you lose your little yard you’d still have the communal garden to sit in, and the nature reserve on the doorstep. Plus you sound like a lot of you are out and about anyway. I’d definitely seriously consider it.

I agree with this from @Orangesandlemons77 "As they get older it is more about the location as they can be more independent really. It is helpful being close to things so they can get there themselves and home. "

I'd look at seeing if you could refinance your existing mortgage (longer term to lower monthly repayments. You can always refinance again at a later date).
Checking your entitlements re benefits.
Cutting down expenses. Bills, food everything.

What's the chances of your eldest going to university at 18? Maybe hold off relocating to a smaller place then.

Is your husbands job London centric? Can he be transferred to another office in a cheaper part of the UK. ?

But that’s four years of struggling until the eldest may go to university- and you would keep his bedroom for a few years anyway, surely. When there could be four years of less worry in a property with the same amount of bedrooms (iF I’ve read it right).

@MrsBobDylan

That's very true *@Cruiser11*.

DH and I are happy to sleep in the living room so the kids can still have a bedroom each. We currently live in quite a rough area (although we have found it safe and like it) and my eldest goes to a struggling secondary school where we're have ongoing issues with bullying. This flat is near two secondary's which are good/outstanding and ds could join their sixth form there.

Having to sleep in the living room sounds like an utter nightmare. Where would you keep your clothes, etc? You'd have to make and unmake the bed every day. Would you sleep on a sofa bed? These aren't great long-term, especially if either of you has any back issues. You'd have nowhere to retreat to if you're ill or want an afternoon nap. And in a few years you'll have two teenagers not wanting to go to bed early.

Could you rent out a room in your house?

The mortgage rate is as good as we can get it and extending the term just means we are committing to paying a bit less but for longer and still struggling with day to day costs.

My eldest ds is bright and really loves studying. He will want to go to University and I would like to send him with money so he is comfortable, especially because has medical conditions which make his life pretty hard at times. I have been trying to save £20 per month for the las t five years but it is pointless when the debt just keeps growing.

My middle ds needs a full time carer and I will not be in a position to earn money like I used to be able to. If we are mortgage free we can save money, pay off debts with the equity left over and be secure.

It has really helped to hear everyone's different opinions - I am definitely not going to sleep in the living room and will make my ds share a room from the get go.

We are not in London but Stevenage - the flat is in Hitchin so a very nice area. My youngest ds is very academically behind so it would be great to live near a better secondary for when he is that age.

I think if your big two have ASD then they will really struggle with a move

Also, my two sons share a room (bunk beds) which seems fine...don't sleep in the living room.

Are you sure you wouldn't be swapping stress about finances for stress about living conditions (sleeping in living rooms/shared rooms/no garden)

Being mortgage free is probably the best way for financial security.

Can the 7 and 11 year old share, 14 get their own room and you and DH have the third? Or same sex siblings share and so on.

I'd move I just wouldn't sleep in the lounge, children don't need their own room. In our family own room is a luxury not a given. And that is the same.for all the cousins, nieces and nephews.

We live in a flat and the leasehold aspect of it is incredibly frustrating for me. The bizarre expenditure by our management on random things but not proper maintenance has me tearing my hair out. At some point there will be some big bills - as there are with all shared occupancy buildings - and they are just not considering how to save for them or doing the preventative maintenance required to stop them becoming massive.

I noticed you said the management company is a housing association - with this beware big bills when major works are done (windows/roof/lifts etc). I know some people who have been stung for tens of thousands of pounds by housing association or council major works. And this is on top of their monthly service charge.

There’s also major cost involved if you ever need to extend the lease - most mortgage companies won’t lend it it’s under 80 years so you might end up with an asset you can’t sell.

If you are looking for financial certainty then I wouldn’t go for a leasehold. They have the potential to become very expensive. I am desperate to leave ours

@broccolibush but she would be mortgage free. She would be saving likely the hundreds or perhaps a thousand pounds she is currently spending on the mortgage. Also if interest rates go up, who knows what her mortgage payment be if the term goes up. Interest rates could go up with the current stagflation

I have stressed tested and I can afford 8% interest rate on my 300k mortgage when the mortgage term ends esp if I keep overpaying. If I couldn't I would be very worried. But I couldn't afford 15% interest. This also means that I can also afford service charge bills (though my development is managed by residents who really want the bills to be low). It's a bit of a zero sum game with property these days- if you are not paying high rent, you have to pay for a large mortgage on a house (unless you have a big deposit) or you get a flat (but need to budget for service charges). Either way you need money so being mortgage free helps.

I think that's it @onlychildhamster - being mortgage free would be life changing and I also think that it offers us security.

I know my big two with ASD will hate moving. The last time we moved two years ago, my middle child who also has LD, actually punched me in the face when I said we were moving.

The first time he stepped into our new house he said "I think I know this house. I think I have been here before". We showed him his new room which was all set up with his toys, and he has never mentioned it since 😂

However, they are the reason we struggle financially. They each have a minimum of one appointment per week, the middle one needs taking to school and picking up and it was impossible to find out of school care for him so I was forced to give up my career. The middle one will never live independently and I will always need to be around for him in some capacity.

We are going to view the flat tomorrow and I am hoping I like it. The estate agent says our house has gone up in value which makes the move even more attractive. We would be able to pay off debts, save for the future and have rainy day money for the first time in our lives.