Silly offer on our house, minimum equity for mortgage ?

[cyberknight]

No details but we have been trying to sell for 8 months and have already dropped the price by a about 15 k we have an offer another 20 k below our new asking price !
Thats 35 k below the valuation and its only a good size 3 bed semi , if we took it we would end up with the same size mortage and a smaller house just to move about 2 miles up the road .
Would the bank even let me move if our equity went from 40 k to about 10 k for the same payments ?

Going from a house with ensuite+cloak + garage to a house with 1 toilet , no garage to save £100 a month am i mad ??

 

[Linford]

Yes

 

[Fnaar]

I can't claim to be any kind of expert on this sort of thing, and I bet you'll get lots of conflicting advice, tbh, but my twopenn'orth is that agreeing to sell just before Christmas is a bad idea, as Santa will get confused

 

[cyberknight]

I can't claim to be any kind of expert on this sort of thing, and I bet you'll get lots of conflicting advice, tbh, but my twopenn'orth is that agreeing to sell just before Christmas is a bad idea, as Santa will get confused

Kids have not been good enough anyway and bah humbug !!!!

 

[Stonepark]

What about the 'new house', how long has that been on the market, can you similarly offer them a below valuation price bid to match the short bid on your house?

Remember a valuation is just that, an estimate on the day it is done what your property is worth, the actual market value of a house is what a willing seller and buyer are willing to agree on.

Don't forget the £5,000 in solicitors costs, re-mortgage costs, moving, packing, changing address, insurance, bike storage shed (if no garage) etc, etc, etc

If you can afford your current running costs and current payment (and it appears you can), unless there is a real reason to move, you are better off staying put as it would take 4 years to reach your £100 per month saving in your new place before you felt any benefit of that saving.

 

[Archie_tect]

If you can manage not to move Cyber then I would definitely avoid it until people have more confidence, if you can. If you can't then so be it.

 

[addictfreak]

I would say try to get a reduction on the house you are buying, otherwise stay put until things pick up.

I moved nearly 4 years ago. Took a 30k hit on my house. I was buying a new build, and company were desparate too so they reduced the price of the New House to match.

 

[Night Train]

It doesn't seem a worthwhile sale IMO.

The prospective buyer has only put in an offer, there is no need to accept it if it isn't enough to justify the move and the costs. Maybe they will up their offer if they really want your house.

 

[swee'pea99]

All good advice - re the pros & cons of moving and the financial implications both thereof and of possible arm-wrestling with your 'new house' seller. One other thing that might be worth considering is what you expect to happen in the market generally. It doesn't sound like there's a great deal of difference between your current and prospective properties, but if there is a value-gap, which side does it favour? Then, do you expect the market to go up or down over the next x years? Other things being equal, it makes sense to trade up in a rising market (bigger gains), down in a falling one (smaller losses).

 

[cyberknight]

We were moving to get nearer the school and not to use the car so much , money is very tight and the aim was to reduce the mortgage and clear monthly credit debt.
Work have said it should pick up next year but it will be 10 months before we see it but that all depends on the economy and they had already cancelled the proposed promotions based on how they thought it would be going .
If i had gotten more might have been worth it but you all have confirmed my thoughts, buyers market it might be but we are currently surviving .... just !

 

[jonny jeez]

I suspect the loan to value ratio may be restrictive when applying for the next mortgage (at 10k that sounds low).

cant you just extend your mortgage term to save £100 a month, or even consider interest only?

Or, and this may sound a bit 50's, but could you take in a lodger? with enough baths and beds its sounds viable. Anything other than go through the expense and hassle of moving this time of the year whilst loosing so much equity as well.

lastly you could let your house to cover the mortgage and rent a small flat to live in till work picks up.

 

[cyberknight]

I suspect the loan to value ratio may be restrictive when applying for the next mortgage (at 10k that sounds low).

cant you just extend your mortgage term to save £100 a month, or even consider interest only?
finishes 1 month after current retirement age , never recovered from short time the other year

Or, and this may sound a bit 50's, but could you take in a lodger? with enough baths and beds its sounds viable. Anything other than go through the expense and hassle of moving this time of the year whilst loosing so much equity as well.
No room for a lodger and with a 5 year old and a baby ...

lastly you could let your house to cover the mortgage and rent a small flat to live in till work picks
Again 2 kids
up.

Thanks for your thoughts though all appreciated.
Spoken to the estate agent and i am up against a smaller 2 bed house thats on the market for 5 k less they also like and as the buyers have no kids etc .... good luck to them i say .

 

[SpokeyDokey]

I had this dilemna (yes, I'm old enough to still spell that with an 'n') about 30 years back when interest rates were 15% - incomprehensible to a whole generation I would suggest. My then wife and I had £10 left every month to spend on what we liked and we were looking for an 'out'.

Stuck it out and glad I did too. As a general rule, stay in the largest/best/whatever house you can afford until you want/need to downshift.

When prices rise you generally make more money on more expensive houses which can pay dividends near the back end of your life.

 

[Brains]

I'll buy the house for £10 more if you are accepting silly money

 

[ASC1951]

I had this dilemna (yes, I'm old enough to still spell that with an 'n').

When was that, then? I mean, it has always been di-lemMa ('horns' or 'prongs') ever since Socrates used it as a rhetorical device 2400 years ago.
DilemNa would mean 'between two pieces of duckweed' or, more fancifully, 'between two women from Lemnos'.

Back to the OP. If you have a choice and are trading up, now is a good time to do it. Prices will drift slightly lower next year, depending on where you are, but IMO will begin to pick up in the following year and carry on doing so through the election. If you are intending to trade down, put it off.
Of course that is purely in investment terms. Houses are not just investments and other considerations such as location, facilities, closeness to work are usually more important.