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PostPosted: Wed Jun 19, 2013 8:38 am 
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It is a two way street. Private rent is usually a little more than a mortgage, so over time your landlord is more than making that money for improvements, etc. Again social landlords are covering their costs generally with the rent they collect, and have other funding and often much cheaper construction costs than ordinary developers.

I totally agree we are far too fixed on home ownership, and our society and economy has suffered as a result.

Renting is ideal when you want flexibility in your life. If you own you can rent out and rent somewhere you want to live without the risk of buying there. Works both ways. We have done it over and over.

The captive mentality of 'must own a home, must keep hold of it even if it is sinking me' is far too prevalent these days.

I don't know all the details of this particular situation as mentioned by the OP, but if there is genuinely 100k in the property it is high time to get serious and realise it. Clocking up or maintaining debt when you have equity is doo doo.

The only debt I can imagine that would be low interest enough to think about holding onto would be something like a student loan.


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PostPosted: Wed Jun 19, 2013 9:19 am 
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highlandsflyer wrote:
It is a two way street. Private rent is usually a little more than a mortgage, so over time your landlord is more than making that money for improvements, etc. Again social landlords are covering their costs generally with the rent they collect, and have other funding and often much cheaper construction costs than ordinary developers.


I think it's definitely worth it though, I don't begrudge landlords their cut or there wouldn't be rented accom. if they couldn't get their cut. but I think it has paid for itself, we had a burst pipe flood our kitchen resulting in half the ceiling collapsing, just a quick call and 20 mins later a plumper arrived, he called an electrician as he was worried about the light, and switches, they came and went then two weeks later the plasterer arrived to fix the ceiling, all we had to pay for was the contents insurance access of £25 as the flood ruined the Fridge freezer, two days later we had a shiny new one, God knows how much that all would have come to had we owned :shock:

Alison


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PostPosted: Wed Jun 19, 2013 9:31 am 
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sounds like in your case you have a landlord who is giving good service, many don't. when I was renting long time back, a stop cock to the water tank was missing, the upshot was my landlord told me to arrange to fix it and he would pay - so I picked somebody out of the phone book, had to take time off work to do the calling and then be in when the plumper arrived and then the landlord gave me grief because the plumper charged so much .... so why the freakin' hell did he not do it himself????

So just as there are good and bad retro bikes, the same can be said for landlords.


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PostPosted: Wed Jun 19, 2013 9:39 am 
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02gf74 wrote:
sounds like in your case you have a landlord who is giving good service, many don't. when I was renting long time back, a stop cock to the water tank was missing, the upshot was my landlord told me to arrange to fix it and he would pay - so I picked somebody out of the phone book, had to take time off work to do the calling and then be in when the plumper arrived and then the landlord gave me grief because the plumper charged so much .... so why the freakin' hell did he not do it himself????

So just as there are good and bad retro bikes, the same can be said for landlords.


True, too true, although I've been exceptionally lucky, whoever my landlord has been, in 26 years of renting off many people I've never had a bad landlord, one time in student accommodation the other guy ran off at the end leaving bills that the landlord had been paying and then getting the money off us, he always showed us the bills so he never ripped us off, when it came to leaving I was surprised when he said, don't worry about his half I'll pay that.

Alison


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PostPosted: Wed Jun 19, 2013 9:49 am 
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highlandsflyer wrote:
suburbanreuben wrote:
especially if she can front up 6 months in advance.
The advantage of renting is that she can go where the jobs are!


Totally agree.

If I was in the same position, I would get that equity, pay off the debts and spend some more of it moving to where the well paid jobs were, or retraining if they are scarce.

Anything else, like staying put and struggling or jumping straight into owning a place smaller or in a shite area, in terms of jobs or quality of life, just wouldn't make sense.

Frankly, if you have 100k in hand, on paper or not, you are on easy street relatively.


It doesn't have to be in this country either.
That house could be on the market within two weeks. If priced right the money could be in her bank within six.
One's outlook is slightly different sitting on a Greek beach with a tidy sum stashed away, to getting up at 6am to go to a job you hate in rainy Rotherham, with a plan to clear your debts in 12 years...


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PostPosted: Thu Jun 20, 2013 7:37 pm 
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Your friend, as most have already said, def needs to speak to CAB and get advice as a matter of urgency. Don't go to a debt company - they charge huge amounts of fees. And def do not be tempted to sell the property to a 'sell and rent back' company. These companies often offer instant money - but also often at amounts well under the value of the house. The seller gets to rent the house back at a reasonable rent - which then increases to untenable levels until you end up out of your home and with no money in your pocket.
I would also suggest your friend gets some benefits advice asap - is she not getting some help with the mortgage from DWP?
The fact that she has lodgers may potentially impact on her benefits - she needs to make sure where she stands on this.
In your friend's shoes I would not hesitate in selling the house. If it's repossessed she will have no home and will still have the debt til the house is sold - and if she sells the house herself, she is likely to achieve a better result. As hard as it is, you also sometimes have to consider moving to another area. I moved from Poole (ooh, expensive) to Lincs where I could not only pay the bills but afford to eat as well. Bonus. :lol:
IVAs/bankruptcy - she needs advice on all these - they can have a knock on effect for getting credit/mortgages etc in the future.
If she sells and pays off her debts then rents, she might get help with the rent from the local council (Housing benefit) - but this is an income related benefit and if she has capital over £16k she will get no help (not that she'd need it if she had that much in the bank! :P ).
The CAB have debt and benefit experts who will help and will also act as a go between between your friend and DWP/creditors.
Jobwise - if she's been unemployed 4 years then this in itself presents a barrier to employment - she may well have to reduce here sights. I had a friend who trained as a teacher - even after 10 years unemployment she was still saying she would only take a teaching job and wasn't going to take a lesser role. :facepalm:
In certain circumstances, if you have a low paid job, you can get help in the form of Tax Credits. She could try exploring the various benefits/tax credits websites for further information.
Finally, if your friend is on income-related benefits (ie 'means-tested') then she needs to ensure that she tells the DWP everything that happens. ALL income and capital has to be declared - as I said, income from lodgers may affect her benefit and she could possibly be asked about where she sourced funds to pay off large debts.
Not trying to be the voice of doom here :( - just the voice of experience. :)
I wish her lots of luck - and tell her that this will all be over one day and life will look a whole lot better from the other side. :D


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PostPosted: Thu Jun 20, 2013 9:44 pm 
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Something does not quite add up here, if she is paying £1k a month in mortgage repayments that's probably roughly a £200k mortgage, Plus if she has £100k in the house then its a £300k house.

It sounds like she is living well outside of her means.

Regardless moving forward should be a no brainier!

1. Get ANY job!
2. Pay the mortgage before anything else each month.
3. Sell the house
4. Pay off loans
5. buy / rent a flat
6. Get better job.
7. Save for a rainy day.

IMO the biggest issue here is that she has had no job for 4 years and losing her house plus being declared bankrupt has not motivated her to get one!

Fix her attitude to work and the rest of the problems will resolve themselves.

Not a very sympathetic point of view but the time for sympathy is long gone.


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PostPosted: Fri Jun 21, 2013 8:12 pm 
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the mortgage is some weird shit that is tied to a bank account - repayment is way higher than say a repayment; I was shocked that after 15 years she has may no dent in it. As she missed the last payment, she cannot change it with the company until she has 12 months consecutive on time payments and without a job cannot change the mortgage. end of.

the renting IMO is not going to give enough income, all it does is pospone the inevitable.

i pointed out several jobs, not in her field, but she takes it that I am insulting her. I have told her October is the time that if she cannot pay for mortgage and debt, then needs to put house on marked coz I estimate that by March next year the house is going to be taken away from her. we'll see what transpires.


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PostPosted: Fri Jun 21, 2013 8:22 pm 
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Interest only mortgage?


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PostPosted: Fri Jun 21, 2013 9:25 pm 
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Even with the Rule of 78, 15 years of repayments should have made more than a dent in a repayment mortgage. If she hasn't re-mortgaged, it may well have been a risky high interest mortgage that she couldn't really afford in the first place....


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