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?

No I absolutely would not downsize to a flat. I knew somebody who did this and bitterly regretted it. Is there absolutely no way you can downsize to a small house in a less expensive area.

I would do it, OP, but make sure you get a room to yourself. We were very lucky in that we were not tied to an area for any reason so moved across the country to get the same size house but with no mortgage. It has been life changing in that we could finally save money, we have no debt at all and although all the recent price rises are making us gulp, we won't be choosing between food or heat this winter. I would do it. Your kids may not be happy about it but ultimately, they will be the ones to benefit.

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

^^ I agree with this. Trying to parent 3 dc with disabilities will be really challenging in a flat with no outdoor space. I personally would be so paranoid about noise. I think that you may think it's a better option but you may find you're replacing one stress for another. Is there no middle ground? A house with a smaller mortgage?

I think if I had a choice, I would worry more about making the wrong move.

As it is, we live in the cheapest house in the cheapest area.

We can't afford our mortgage and unexpected costs, which we have come to expect every bloody month.

Every time the car breaks down or the drain blocks (recently spent 1k on a partially collapsed drain) it goes on the credit card. We never have savings because all our money goes on mortgage and bills and trying to clear the credit card. It is like being caught in a circle of poverty. And in the meantime, we have 200-240k equity stuck in a not particularly great house in a bot particularly nice area.

I listened to a Jeremy Vine show about changes to social care. A woman rang in and said that her parents house had been sold and everything had gone on their care. She said they always wanted to go on a cruise but never got round to it. I don't want to be trapped financially, I'm sick of the stress and uncertainty.

I don’t think the conundrum here is actually flat vs house.

It’s not really about the garden either - some families use them often, some don’t. Plenty of families live quite happily in flats without a garden at all.

It’s about the number of bedrooms.

As much as you might think it’s manageable, sleeping in a living room will be a challenge.

You’ll never have privacy or your ‘own space’ and will struggle with storage.

Don’t live overcrowded housing until you have exhausted all other options.

I considered the option, but after grounds maintenance fees and a “newer” council tax, the 2 bedroom flat turned to be only £60 cheaper a month than my 3 bedroom house.

With a high percentage of equity, you can get an interest only mortgage. I thought this could be a better option than selling as my current property is raising rapidly in price, while new flats in my area tend to depreciate in value for a few years before they atart going up in price. But then, my mortgage deal’s end is still a good few years away but going interest only is definitively an option I would consider.

I know that we are always told that interest only mortgages are not recommended and that is true but, if you are not planning to die in the house (and I don’t as the stairs are killing my knees already) they make a lot of sense.

Ps. The reduction in my mortgage monthly payment following the above would be 80% provided that the interest rates remain the same, so it may be cheaper to stay in your house than paying leasehold fees. You only need to find a good independent financial advisor.

If your circumstances improve by the time a new mortgage deal comes to an end, you can still go back to a repayment mortgage.

@GrandmasCat the problem is if interest rates increased and OP somehow can't afford to pay the mortgage, OP could lose the house plus some of her 200k equity. Of course she could sell it but it is likely the prices then would be lower now and OP would be in same situation as she is in now. But it would be more painful because she would have no choice in that matter.

If OP can't pay the leasehold fees, well thats bad but there is a lady in my development who didn't pay for 10 years (she is on a repayment plan now) and we (the residents company) never repossessed her property.

We all take a risk in buying property and everyone's risk appetite is different. I struggle to want to advise OP to take risks and not seize the opportunity to be mortgage free when she has 2 disabled children and not much savings.

When you go there op check room sizes (tape measure) & think beds
obvious thoughts - about measurements for furniture (think ikea!!! you should be able to afford fitted furniture to maximise space I hope & if beds are not bunks have beds with storage underneath & perhaps in time a GOOD bed for you with storage -nb no attic space remember) is the living room or kitchen big enough for a table - extending/shrinkable ones?
From what you are saying op -just as long as you are cautious about management cost & ground rent & check its form of heating (is it electric does it have double glazing?) & remember you shouldn't have to pay for building insurance, Oh & lease length check that as too low & you will have to extend it soon & that will be another cost .

@onlychildhamster, you can fix the interest rate for a few years, so no worries about rates changing. At the end of the period you can get another mortgage deal or sell and move to a flat. So she gets an extra few years in the current house for a smaller monthly payment and can easily go back to the idea of selling to go mortgage free at the end of it. 🙂

In other words, the worst thing that could happen is that she needs to sell the house to pay the mortgage but with a good percentage of equity, this is not a problem.

The key is having a sizeable percentage of equity to reduce the risk and get a better interest rate.

… and she won’t loose any of the equity percentage unless house prices fall of a cliff. Which obviously is a risk but, it is a risk as big as buying the flat at current prices.

I would do it

I was brought up in flats - I had to share a room with my 2 sisters. We loved it, felt really safe too! We did eventually get a house but we never felt as comfortable as we did in the flat. A communal garden and the proximity to the nature reserve is will be great.

I agree about seeing if you can partition a room to make a bedroom - whether that's splitting one of the big ones for 2 kids or part of another room.

I think with the worry of your SN child plus your work it sounds like you need to do this for your whole family and you will feel so much better if you can eliminate that insecurity.

I would just make double sure you've done your sums right!

It’s funny on mumsnet as usually paying off a mortgage is something a large proportion of posters really seem to aspire too. It seems like because the OP wants to buy a flat and not a house then this isn’t the case.

I don’t think downsizing, but giving the kids a room each and you in the living room will work, and you have no garden to escape to

If you move then kids need to share, or could you make the largest room into two?

However surely the real issue this is the second time to downsize. I understand you have a disabled child, but why can’t you work evenings? Your husband will be at home

I only suggested it because it doesn’t seem practical in the long run to invest in a home where the parents need to sleep in the lounge.

I would do it.

Area is more important than building imo - I'd rather live in a flat in an area I love than a house is a crap area.

@Cruiser11 I think its cos OP, DH and kids are a working family so people think they deserve better. If they had been in council housing, the response would be that they 'are so lucky to have a big 3 bed flat'. I once posted about my friend who may be long term disabled (depression) but has 100K to buy a home in cash- she wanted to buy a 4 bed house in a cheap place like sheffield so she could rent out rooms/get live in carers; almost every poster thought it was a disastrous idea and she should get a nice little flat that was easy to maintain.

But in the end, its not really about OP 'deserves', its what makes sense.

When you are freehold, you decide when to maintain and repair. If leasehold, you are at the mercy of your management company. Windows in block need doing? Roof? External painting programme? Fascia/soffits/guttering? You will have to pay your fair share and these costs could run into the tens of thousands. Especially if they need to use scaffolding on the block.

I’d do it. I’ve lived mortgage free before and I’m about to do it again. The feeling of freedom and security is amazing.

Yes I could work in the evenings but I prefer to cook for my kids, take them to after school activities and help them with homework. I studied for years to earn a decent wage but once I needed flexibility because my children are disabled, it became impossible.

And I do work. I am paid Carers allowance because my days are filled with tasks which other parents don't have to do because they don't have disabled children. I won't bore you with listing them.

I agree with pp, this seems more a conceptual issue because I want to buy a flat. Plenty of folk in Milan, Paris and Bordeaux live in apartments which they rent and life is ok.

I would be mortgage free, two of my kids will have to share a room and ultimately, we could live without the fear of defaulting on our mortgage repayments or not having the money for a weekly shop.

I think I have made up my mind but am very grateful for all your help. I feel clearer now

I would do what you are thinking of.

Although financially comfortable now, I remember days of whole salary being swallowed by overdraft and praying no big expenses came up that month.

I raised my children in a flat until they went to secondary school. They shared the biggest room and I had a compact bedroom. If they had sleepovers they would all camp in the living room so not to disturb the other one.

I moved to get a third bedroom but my house is only marginally bigger in sq ft terms, it doesn't have a loft as that's the third bedroom and storage in the flat was 10 times bigger and better. Although we now have a garden, it's only used on the rare hot day but still needs to be looked after.

I did find leasehold charges a pain. If the block has a lift be prepared for higher service charges as lifts are costly to repair.

A previous poster suggested working in the evenings around your husband. I think a good idea a couple of nights a week if possible. But from the situation you describe it sounds like being mortgage free will have a big impact to the wellbeing of your family and that is priceless.

Just read all your updates op. The move sounds like it would be amazing for you. Peace of mind from financial worries is priceless! Living in a nice area with amenities and a good school. Hope you get it, wishing you luck for the viewing.

Thanks so much @CleopatrasBeautifulNose I need encouragement and your words really helps.

I have woken up this morning looking at the house we live in and thinking of all the work we've put into to make it lovely and how sad I am to consider leaving it.

Then I think about the credit card bill, the expense of Xmas and the fact we have no savings and no hope of affording the next unexpected big bill...

I am going to try and meet up with my friend soon to talk it through, she is the best at giving really factual advice and will always tell me what she thinks.

I am training at the mo to become a HE Tutor so I can teach evening courses in my specialism. It is naturally pt work and well paid per hour, although tricky to find community tutor work since Covid.

I feel like the life I set out to have, pre disabled children, has never been further away. All that study, working hard, promotion, career development, then struggling for 10 years to hold down a professional job and cope with all the additional demands disability brings, actually came to nothing.

I have been turned down for two retail jobs, had to leave a TA post because of Covid and not wanting to give my eldest son who has T1 Diabetes and Hypothyroidism Covid and set up my own business from home which ultimately turned out to be a fuck tonne of work for a tiny profit.

My epitaph will be 'She tried. She failed.'

My epitaph will be 'She tried. She failed.'

Are you kidding?! It will be 'What a fucking woman!' - from all you have written here you sound like a hugely bright, capable and resilient person, your husband and kids are lucky to have you, what a treasure.