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Sell my home or rent it out? What to do?

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ria2011 Posts: 309
Hi Wollies, I'm in a bit of a muddle and could really do with some advice. I'm getting married next year and myself and h2b are building a house at the moment about three hours from where I currently live in my own home (that I bought 7 yrs ago before I met h2b). Until recently I had always planned on keeping my home as an investment for us both, that we could sell on down the line when we wanted to or needed to. However, I've been wondering whether that is the right thing to do or not ........... I invested 60k when I bought my home as well as the mortgage. If I could sell in or around the current asking prices I would probably be able to walk away with that 60k after estate agent fees- I wouldn't make any money but I wouldn't have really lost any either. But I would be able to use that money towards the wedding and towards our new house, (which by the way we haven't been approved for a mortgage yet on........we are going to go in together the week after next to see how we get on....) I have other loans and credit card/overdraft (living in overdraft for the last 3 years) amounting to 10k and I've been worrying so much about money for ages. I'm worried that my debts will affect our ability to get a new mortgage too and h2b is self employed which also makes it harder. If I don't sell my home the rental income would cover the mortgage, but I'll be a long way away if anything goes wrong.......and if we had no tenant for any amount of time things would be very tight (although it is well located along public transport routes) Some friends (and my parents) are advising me to sell. Others say I'd be mad to and should hold onto it as an investment. H2b is trying to be very tactful and says I should decide as it is mine but that maybe we should hold onto it.......... Sorry for the long long post but does anybody have any advice out there? Has anyone been in a similar position? What did you do and did you regret your decision.........? Feeling very stressed about all this. My housemate left yesterday and I have to decide whether to rent out the room, rent out the whole place or put it on the market................. :eek Thank Wollies :thnk
Leftbank Posts: 2395
hi Ria Would you consider letting it out to the RAS scheme with your local County/City Council, they take the property, give you guaranteed income and maintain it think 5 yrs is the min people can give property to them for. I wouldnt sell it being honest in a few yrs you could make an absolute packet..
coco11 Posts: 309
its a toughie, last year we had to move to a new house, was living in a duplex with one baby and another on the way so just wasnt suitable. We rented our first house out and only did this because we got approval for the mortgage we wanted, so based our decision on what the banks would give us. Maybe you should make an appointment with a mortgage broker or financial advisor to see if you can get approval while holding on to your house or whether they will only give it to you on condition of sale agreed. Also they say never get into debt over a wedding so dont base any decisions on this... :wv
ria2011 Posts: 309
Thanks for the reply g4ajune11, I've never heard of the RAS scheme. What is that? It would be a lovely thought that I could sell it at a profit in a few years time but I don't think the market is looking all that good........and I'm afraid I could be stuck with it and not able to sell for years and years or something! Argh! My head is wrecked O:|
Leftbank Posts: 2395
The RAS was introduced to help out the rent allowance scheme in short city councils/county councils take over clients who were on Rent Allowance with HSE and they take charge of the property for a set amount of time and guarantee income for the time, its a v tough decision defo for you guys to make but its good for ye to know what is out there to help, they guarantee property will not be messed up and the condition will be the same as you gave it to em minus normal wear and tear..
BlossomHill Posts: 2169
[quote="ria2011":2agqwhiv]I invested 60k when I bought my home as well as the mortgage. If I could sell in or around the current asking prices I would probably be able to walk away with that 60k after estate agent fees- I wouldn't make any money but I wouldn't have really lost any either. But I would be able to use that money towards the wedding and towards our new house, (which by the way we haven't been approved for a mortgage yet on........we are going to go in together the week after next to see how we get on....) I have other loans and credit card/overdraft (living in overdraft for the last 3 years) amounting to 10k and I've been worrying so much about money for ages. I'm worried that my debts will affect our ability to get a new mortgage too and h2b is self employed which also makes it harder.[/quote:2agqwhiv] I think the decision will be made for you when talking to bank manager. You both have no mortgage approval yet, and owe over 10k which plus paying a mortgage on another house lessens your ability to borrow. You would be in a much better position if you had 5Ok in the hand no debts, no other mortages especially if your OH is self employed. It would be nice to hold onto your house but don't think in current lending climate that it is financially possible.
ria2011 Posts: 309
Thanks flowerbomb! The wedding savings now looks like it is going to be spent on paying our builder. At that rate we will have to borrow towards the wedding.......but borrowing towards the wedding and having a smaller mortgage because wedding money went to the builder is much of a muchness i suppose. I know I'm in a lucky position because I have the option to sell (and the 7 yrs paid off mortgage balances out the drop in price since I bought it). Lots of people can't sell. I just don't know what to do!
ria2011 Posts: 309
Thanks Blossom Hill! I suppose the bank manager will be able to shed more light on it. I've been really silly running up my overdraft and not paying it off. I dread the thought of facing bank manager and owning up to being so irresponsible..... And it would be so much nicer to have 50k in the hand and be able to stop worrying about money all the time..... But there is a chance h2b could get mortgage approval by himself too....... g4ajune11 the RAS scheme sounds like a good plan if I do find I can hold onto my apartment - thanks!
Mrs-Byrne Posts: 236
Hi Ria2011, I think you should hold onto it, tbh and go with RAS scheme. Why do ye want to build a house straight away, would ye not live in your house for a few years while you clear off loans and save for deposit? Best of luck with your decision.
ria2011 Posts: 309
Hi themrstobe! My place is in Dublin and h2b is farming down the country and it was always a given that I would move down when (or before) we got married. We are building on his site at home. He has gotten as far as blocking it now without the mortgage but we'll definitely need the mortgage to do the roof and the rest..... There's a chance he'll be approved on his own, but it would prob be easier with both of us...