Would you sell and start over in these circumstances

Just looking for some opinions as to if this is a good idea .

The background separated over 6 years and 3 kids currently living in the family home . We will be moving towards divorce soon and the family home needs to be sorted out . Up to this mortgage has been paid by both and is up to date and not in arrears . This is not sustainable going forward for various reasons .

I work part time and i am not in the position to go back to full time work at present . The family home has a large mortgage every month that i cannot afford to take over even with maintenance payments etc . Its a large house and although i love it i am trying to be practical about things and i simply cannot afford the mortgage on my own .

At present with 3 evaluations the house is just about not in negative equity and would make enough if sold to cover mortgage and costs but there would be no major equity .

As its the family home would i be mad to sell, everyone one keeps telling me i am entitled to stay there etc and i would be mad to contemplate selling and starting again with nothing . I would have to rent as would not get a mortgage at present but the way i look at it in my head is it would be a clean break and a new start for everyone . It was always going to have to be sorted on divorce and at this stage i just want to move on .

Opinions please am i mad like everyone says or is this the practical solution .

Hi mojo

No one can answer this question. You will need to give much more details.

As a general rule, the repayments on a home, even in heavy negative equity, are less than the cost of renting an equivalent property.

Brendan

Thanks Brendan . In this case the cost of renting a smaller house in the same area would be over half the cost of the existing monthly mortgage so a huge difference . The monthly repayments are high on the mortgage and up to this ex has been paying his half plus maintenance which is not sustainable from here on forward due to change of circumstances . Its a large 4 bed detached which in reality is costing me loads on heating electricity etc and i am willing to down size. Even to rent her out we would not achieve the rental income to cover mortgage .

I would not have the capacity to make the repayments and even with extending the term and negotiating with the bank its still beyond my reach on my own and to be honest the bank would not agree .

Although i walk away with very little a smaller house in my area would now be selling for in and around 100,000 Euro and i would be in a good position to get a mortgage for that amount based on income and i would have the deposit from family who are willing to help if i do decide to go this route .

To me it makes sense to sell and try start over but everyone i mentioned selling the family home to has be appalled.

It would help if there were some specifics on the numbers, e.g. debt outstanding, value of home, other debts, savings, assets, income, etc.

I understand that and i don't mean to be vague will put up some figures but may delete later as i don't know who is reading .

Valuations from 3 different auctioneers when asked for realistic evaluations came in at 275,000 Euros said they would put on market for 320,000 but would expect to sell for 275,000

Amount outstanding on mortgage = 250,000 euro give or take .

Income = Public Servant 35,000 annually

Savings = None at present family member would help with deposit if i decided to buy and of course if bank are willing to lend .

Credit card = paid in full monthly

Car loan = 10,500 left with repayments of 400 a month 2 years left .

I have no other loans and i am willing to sell the car if need be as i feel its a unnecessary expense and get a cheap run around .

I pay credit card in full if i use it monthly and i have no overdrafts . I dont have savings but i am not in arrears in anything and i budget well with what i have week to week .

The repayments on a new mortgage for 100,000 euros would be less than the price of renting and less than half the current monthly repayments on current mortgage . Dont know if that helps

No brainer to me, sell and buy the smaller house. No more a mortgage slave, cheaper bills, less house maintenance etc.
I might be more reluctant if you have to rent, I'm not sure I'd give up the security of the family home to rent with 3 children, but if you can buy, I actually see no benefits to staying where you are.

Thank you SarahMc that is my thinking of it also i am very much a realist . It would be starting again but it would be my own place and we would both be free to move on with our life's . It is of course dependant on getting the price for the house etc and i am finding the maintenance and bills like heating here to be very high rising every year .

Credit rating is good at the minute so dont want house going into arrears . I will maybe talk to the bank and put feelers out as to weather they would be willing to look at giving me a mortgage on my own etc based on my situation .

Hi mojo

Without proper figures , it's impossible to advise. Interest rates, term to go on mortgage, etc.

You should be comparing the rent with interest paid on the mortgage, not the mortgage repayments which include capital.

If you have a cheap tracker, it's likely that most of your repayments are capital and you will be eliminating the negative equity very soon.

If you do choose to trade down, and if you have a cheap tracker, there is a good chance that the bank will allow you to keep your tracker.

If you have a cheap tracker, and you take out a much smaller mortgage but at SVR, you won't be saving much.

Hi Brendan to answer some of the questions .

20 years left on mortgage . If i was to rent it would be for a very short period the aim is to buy as soon as possible after sale . I spoke to the bank previously as i am in contact to keep them up to date , have a contact there i will call him with regards to weather getting a mortgage on my own is a viable option .

The Mortgage is a variable rate we went from fixed to variable a few years back and did look into at the time as to weather we should have be given a tracker but the answer was no .

I cant live i think with the uncertainty that ex most likely will stop paying his share and although i know in theory he cant do that the reality is a lot different.I think myself peace of mind and being responsible myself for all incomings and out goings would be the best option . I didn't mention there has been issues with control ,emotional abuse and financial abuse not only in the past but ongoing and i suppose i feel this is my chance to make a clean break also in that regard .

You might it very hard to get a mortgage with no savings history. How about renting for a few years?

If you drip feed us the story, the responses will not be comprehensive.

The interest on your mortgage, is likely to be less than the rental cost of a much smaller property.

The cost, including repayment, to you, must be a lot lower if your ex is contributing to it.

Staying where you are seems like the best financial bet by far, but it's based on the drip feed of infomation you have provided. If and when your ex stops contributing, then you can reassess the situation.

Thank you for the replies . I did not want to be particularly vague but due to my circumstances i have to be very careful .

Anyway i had a brief chat with the bank and i have a appointment Monday to look at all avenues both keeping current home and what it would entail and weather its possible, also selling and taking out a complete new mortgage . I am bringing someone with me so not going on my own .

From the brief chat today with the documentation i had i am in a very good position according to the person i spoke to and its a more indept appointment on Monday with all my documents . The house has been valued and i have also been told i can go back to work full time hours whenever i want the hours are there and they will provide documentation to that effect if applying for mortgage.

I have a lot done and things are clearer for me but the meeting with the bank today was a lot more positive than negative and they are looking at all options .

If the bank will allow you a mortgage on your own isn't this your route to peace of mind and that seems to be high on the agenda at present, and for the future.
While your new home will be more compact it will also be cheaper to heat and maintain. Struggling to hold on to a house that is no longer suitable does not make sense. However I am speaking from the heart and of course the sale and mortgage figures are also vital.

Most of us have taken cuts in salaries and lifestyles and have come to accept the changes. You could be looking forward to a fresh start in your own home and no longer looking over your shoulder.

Good luck with whatever decision you make

Hi all i just thought i would come back 10 months later and update this thread as might help someone in a similar position going forward . As you can see i had a big decision to make in the original post and wanted to make the right one .

I weighed up the pros and cons and made a decision that i would put the house on the market and if i reached a asking price to break even i would sell . I felt that even if i didnt get another mortgage it was going to be worth it for peace of mind and my hand was forced in that my ex was no longer going to pay his half of the mortgage . I was lucky that it sold very quickly for near enough to asking price covering fees and leaving me with a small amount to put towards a future deposit .

In my original post i said working full time was not a option . I bit the bullet and went back full time and also went for a promotion which i got . I kept my head down saved hard and showed capacity to pay for 6 months and then decided here goes and approached the banks .

Today i was fully approved and viewed a house straight away within budget and i am putting in a offer . Its a regular 3 bed semi more than big enough for me and the kids its less a month than the current rent and well within my comfort zone etc . But it will be mine if i get her and if not at least i know i am basically there . I had no credit card it was in positive balance and no outstanding loans cleared the car loan with a family gift but saved the 10 percent deposit myself .

I am glad i made the decision i did . It was not a easy one and some thought i was mad but to me peace of mind and knowing i am not dependant on another etc and i am comfortable with what i can afford was well worth the decision i made . As i said updating in the hope it might help another.

Thanks for the update and a fantastic result. I hope you get the house you put the offer on, you deserve it.
It is also great to see that two can separate and that neither is so adamant not to move on or be practical about it. well done.

Mojo, I've just read through your thread and see you have been through a lot of decision making . I'm very glad you took the steps you did and that it has worked out for you. Well done and good luck.

Great result, great that your ex was willing to agree to the sale and that there was no negative equity on the house. As break up joint mortgage stories go, that's one of the cleanest I've heard! You did well by acting promptly and selling before things started to unravel i.e your ex stopped paying his half etc.