What would you do?

sullivk

My husband and I are expecting our third child and we are pretty tight on space at home. We are currently living in my 2 bed terraced house with an attic conversion.
My husband has a duplex apartment which is currently rented out (and in negative equity of approx €25k)

The plan was always to sell his apartment, then sell my house and upsize. Unfortunately the market hasn't picked up enough to get rid of the apartment so we're a bit stuck.

I'm quiet fond of our current home. The area is ideal and even if we were in a position to buy a larger home we would be looking to stay in the same area/estate.
I've checked a couple of mortgage calculators. Between cutting my hours at work/creche fees etc. the totals they have given us are far too low to afford a bigger home.

I'm thinking that perhaps extending and changing the layout of our ground floor may be our best option. My husband thinks we should keep saving for a deposit for a larger house. I'm worried we will be saving for the next 5+ years, living in a very cramped space and then potentially be refused a decent mortgage at the end of it all.

I'm just curious as to what you would do in our situation? Perhaps there is a solution that I haven't thought of!! Thanks

carfax

sullivk wrote: »

My husband and I are expecting our third child and we are pretty tight on space at home. We are currently living in my 2 bed terraced house with an attic conversion.
My husband has a duplex apartment which is currently rented out (and in negative equity of approx €25k)

The plan was always to sell his apartment, then sell my house and upsize. Unfortunately the market hasn't picked up enough to get rid of the apartment so we're a bit stuck.

I'm quiet fond of our current home. The area is ideal and even if we were in a position to buy a larger home we would be looking to stay in the same area/estate.
I've checked a couple of mortgage calculators. Between cutting my hours at work/creche fees etc. the totals they have given us are far too low to afford a bigger home.

I'm thinking that perhaps extending and changing the layout of our ground floor may be our best option. My husband thinks we should keep saving for a deposit for a larger house. I'm worried we will be saving for the next 5+ years, living in a very cramped space and then potentially be refused a decent mortgage at the end of it all.

I'm just curious as to what you would do in our situation? Perhaps there is a solution that I haven't thought of!! Thanks

My advice (as an EA) would be to get valuations from Estate Agents for your own property and quotes from builders before making a decision.

It's partly a financial decision so the three factors of value of your own property, value of the property you want to buy and cost of extension on your own property all need to be weighed up.

Best of luck.

Hollister11

Negative equity of -25K shouldn't put you off selling. In the grand scheme of things your taking that hit to live in a bigger property which is well worth it IMO

sullivk

Thank you for the advice.
Is it possible to put the apartment on the market with tenants in place? As I was taking unpaid maternity leave earlier in the year we haven't been in a position to have the property vacant and on the market.

My husband isn't keen on selling for less than the mortgage balance but if it meant being rid of the apartment it's a small price to pay as far as I'm concerned.
The current rent is just about covering the mortgage but my husband is covering management fees and letting agency fees so it's a burden!

newacc2015

Do you really need to move into a bigger house now? I know you are expecting another child, but your children will hardly be looking for their own room for another while. In the mean time, the apartments negative equity will be reduced, as property is increasing in value to the the extent within 1-3 years the duplex wont be in negative equity

Have you recently got the duplex valued? It might be worth more than you think

Personally I would drop the letting agency. They offer poor value for money in my opinion. Most tend to under price rents just to get the place let. Have you checked to see if the tenants could have their rent increased so at least you can close more of the gap between rent and the cost of the duplex?

sullivk

We spoke to the letting agent re current selling market and he said similar properties are going for approx €175k (husband's mortgage is around €200k) But I think it may be wise to get an official valuation done. And will see about giving them the boot!

Bedrooms aren't really the issue to be honest, we have our own room, teenager in his room and can squeeze 2 smallies into the other room.
The problem is the living space is just too small and layout really isn't working for us.

I'm having my house valued tomorrow to see if there is any equity there and then we will probably speak to mortgage advisor re Negative equity mover mortgage for the apartment.

We have been keeping an eye on houses in our area and they are going for about €285k for a 3 bed semi with attic conversion which would really be ideal and hopefully not out of reach for us!

Edited to add: We increased the rent at the beginning of the year so that's not an option unfortunately

conorhal

Would you consider renting out your current house also and then renting a larger property yourselves for a few years until market conditions are more favourable?

sullivk

From what I've heard, rents are crazy high at the moment and very difficult to secure due to high demand. I'm not keen on renting to be honest, I think we'd struggle to continue saving towards a deposit if we did rent.

sullivk

sullivk wrote: »

From what I've heard, rents are crazy high at the moment and very difficult to secure due to high demand. I'm not keen on renting to be honest, I think we'd struggle to continue saving towards a deposit if we did rent.

Its pointless anyway, if the value of your two houses increases so will the price of the house you buy. It would be a total waste of money forking out rent for a few years to end up in a similar situation and with all the other disadvantages of renting aswell.