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  • FIRST POST
    • dollydimple73
    • By dollydimple73 16th Mar 17, 10:35 AM
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    dollydimple73
    Help! Do I sell or re-mortgage if possible?
    • #1
    • 16th Mar 17, 10:35 AM
    Help! Do I sell or re-mortgage if possible? 16th Mar 17 at 10:35 AM
    We've been in a DMP with Stepchange for 8 years now, with approx another 8 years or so to go. We started with a debt of 54k and are currently around the 30k mark. Our circumstances have improved massively over those years, but we're trapped in this DMP and desperate to get out.

    We really don't know what to do for the best. We have a lot of equity in the house, approx 58k but know that if we sell and clear the DMP then our chances of getting another mortgage would be slim for a good few years, so we'd need to rent for a while until we improve our credit files. So do we try and re-mortgage with our current mortgage lender (Halifax) borrow the 30k and clear the DMP or sell up, clear the DMP and rent for a few years? What would you do?
Page 1
    • freshcotton
    • By freshcotton 16th Mar 17, 12:44 PM
    • 218 Posts
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    freshcotton
    • #2
    • 16th Mar 17, 12:44 PM
    • #2
    • 16th Mar 17, 12:44 PM
    I wouldn't sell unless you actually wanted to move. Sale and renting costs can quickly add up which is money you can throw towards debts.

    If your situation has improved, can't you clear the debts quicker ?
    Mortgage Start - August 2013 £145,000 ************ Balance at April 2017 - £59,000

    Target - Overpay by £2,500 each month ************** Mortgage free by December 2018!
    • EssexHebridean
    • By EssexHebridean 16th Mar 17, 1:02 PM
    • 7,277 Posts
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    EssexHebridean
    • #3
    • 16th Mar 17, 1:02 PM
    • #3
    • 16th Mar 17, 1:02 PM
    Essentially selling a property you own, and going into rented acommodation, is the same as turning unsecured debt into secured debt - it's to be avoided unless it can't be helped, and it doesn't sound like that is your situation.
    Re-mortgaging to clear the debt comes under the same heading by the way - DO NOT DO THIS!! For a start it doesn't "clear" the debt - it just moves it, and I imagine you'll then be paying it off for more than 8 years, won't you?


    When did you last re-do your SOA? It sounds like that's the first thing to do - get that done and maybe post it in here for us to help you review, it sounds as though you may ow have additional surplus which can either go to the DMP to shorten the remaining term, or be set aside ready to offer full and finals in due course?
    MORTGAGE FREE 30/09/2016
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    • January2015
    • By January2015 16th Mar 17, 1:16 PM
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    January2015
    • #4
    • 16th Mar 17, 1:16 PM
    • #4
    • 16th Mar 17, 1:16 PM
    If you are on a DMP hopefully all your debts are on 0% interest now. Why would you want to remortgage and put those debts onto an interest bearing loan that is secured to your home......don't do it. I would never recommend selling your home to pay off unsecured debts either.

    You may be fed up with the length of time the DMP is taking, but stick with it - you will get there.

    Pop over to the DMP Mutual Support thread - all folk going through the same extended process to clear their debts. We keep each other motivated and help out when queries pop up.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
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    • Spatton
    • By Spatton 16th Mar 17, 1:37 PM
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    Spatton
    • #5
    • 16th Mar 17, 1:37 PM
    • #5
    • 16th Mar 17, 1:37 PM
    Agree with the advice DO NOT DO THIS


    Renting is *not* a cheaper option. Ask any person who rents and wants to buy, one of the biggest issues in getting a toe on the housing ladder is that rent is typically a lot higher than mortgage payments on an equivalent property, so there's never enough left over for saving towards a deposit. Plus there's all the sneaky things like insurance costs being higher for people who rent as insurers see you as a more risky prospect - including car insurance believe it or not.


    Totally agree it's soul destroying being stuck paying off debt, but you have your own home which is a lot more than a lot of other people. Plus, you can be turfed out of rental properties with very little notice (ever tried to pack up a house full of belongings and find somewhere else to live in a month), which is much, much harder when it's your home with a mortgage. Oh, and one more irritating thing about renting - landlords can enter their property with minimal notice as well, which always feels like a total invasion of privacy, even though it's perfectly legitimate.
    • dollydimple73
    • By dollydimple73 16th Mar 17, 1:55 PM
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    dollydimple73
    • #6
    • 16th Mar 17, 1:55 PM
    • #6
    • 16th Mar 17, 1:55 PM
    Thank you for the replies. We've just recently had a review of the DMP and upped our payments and are at the maximum we can comfortably afford to pay. We're just busting out of the seems of this house and really want to move but just can't see how it's possible. I really don't want to rent for all the reasons everyone gave. Just a bit fed up of it all I suppose
    • another casualty
    • By another casualty 16th Mar 17, 2:23 PM
    • 2,557 Posts
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    another casualty
    • #7
    • 16th Mar 17, 2:23 PM
    • #7
    • 16th Mar 17, 2:23 PM
    Same as above .. don't sell .
    Your head is obviously spinning at times , trying to do the right thing .
    Don't forget : a dmp iss there to work for you , meaning you can either reduce or increase the amount you pay should unforseen problems arise .

    I do have questions though : how do you know how much equity you have in your property ? Has your place been valued ? How much do you have left to pay on mortgage ? Don't forget , some estate agents overvalue how much your place is worth . If you did decide to sell, you could have a nasty surprise . Then you have the condition of your property etc

    Best of luck
    • enthusiasticsaver
    • By enthusiasticsaver 16th Mar 17, 2:26 PM
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    enthusiasticsaver
    • #8
    • 16th Mar 17, 2:26 PM
    • #8
    • 16th Mar 17, 2:26 PM
    Thank you for the replies. We've just recently had a review of the DMP and upped our payments and are at the maximum we can comfortably afford to pay. We're just busting out of the seems of this house and really want to move but just can't see how it's possible. I really don't want to rent for all the reasons everyone gave. Just a bit fed up of it all I suppose
    Originally posted by dollydimple73
    Moving in itself is expensive with usually fees of around £5k plus the expense of buying a larger property. If you are on a DMP obviously a new mortgage is out of the question until after this has finished anyway but selling and renting would not be cheaper. Rents tend to be more expensive than mortgages these days.

    Upping your payments to clear it quicker as you have done sounds like a better option.
    Debt and mortgage free and saving for early retirement
    • EssexHebridean
    • By EssexHebridean 16th Mar 17, 2:29 PM
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    EssexHebridean
    • #9
    • 16th Mar 17, 2:29 PM
    • #9
    • 16th Mar 17, 2:29 PM
    I'd say do the revised SOA anyway - remember what a debt management charity say you can afford, and what you might actually be able to afford are two different things as they won't expect you to make some of the economies that you might be happy to make - they have set guidelines for how much you're "expected" to spend on certain things.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£362.24
    • Fireflyaway
    • By Fireflyaway 16th Mar 17, 5:07 PM
    • 974 Posts
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    Fireflyaway
    I would say stay where you are and try to increase your repayments .Don't take out more debt to pay off your existing debt.
    I am renting having sold up year before last and due to a bad credit file could be doing so for a few more years before we can buy again. Our rent is now £1150 per month. Our mortgage was £580!. Admittedly this house is bigger but its a big difference and having been asked to move on recently as landlord wanted house back I do miss the security of owning. Try to take steps to utalise your space better. You don't know for sure what the housing market will do. Imagine remortgaging then when you want to sell up, the market goes bad and suddenly you have no equity and are stuck for years! That happened to me. I made the mistake of thinking about the situation at that time and not the potential future consequences.
    • FatVonD
    • By FatVonD 16th Mar 17, 5:42 PM
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    FatVonD
    Absolutely do not sell or remortgage, house prices will most likely continue to increase and you may never get back on the property ladder again.

    I agree you need to look at how you are using the space you have. Clear out (and sell!) as much clutter as you can, invest in a shed if you must to store out of season clothes etc in bin bags (or put them in the loft.) Clear out all the kitchen equipment that only gets used rarely, if it has a layer of dust on it then out it goes! As the saying goes, keep nothing in your home that isn't beautiful or useful!

    Rethink how you are using the rooms you have, would swapping bedrooms around help (there's no law that says the 'grown ups' have to have the biggest bedroom if you have several kids squeezed into a smaller one for instance.)
    Spend on clothes in 2017 £68.50
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    • January2015
    • By January2015 16th Mar 17, 7:36 PM
    • 1,690 Posts
    • 4,594 Thanks
    January2015
    Absolutely do not sell or remortgage, house prices will most likely continue to increase and you may never get back on the property ladder again.

    I agree you need to look at how you are using the space you have. Clear out (and sell!) as much clutter as you can, invest in a shed if you must to store out of season clothes etc in bin bags (or put them in the loft.) Clear out all the kitchen equipment that only gets used rarely, if it has a layer of dust on it then out it goes! As the saying goes, keep nothing in your home that isn't beautiful or useful!

    Rethink how you are using the rooms you have, would swapping bedrooms around help (there's no law that says the 'grown ups' have to have the biggest bedroom if you have several kids squeezed into a smaller one for instance.)
    Originally posted by FatVonD
    I totally agree with this post

    When our 4 kids were growing up my hubby and I had the single bedroom. We coud just fit a double bed in and still get the door open The kids needed the big double bedroom. To make more space my husband made a 3 storey bunk bed (which he firmly attached to the wall so they couldn't topple it over).

    I also agree with the de-cluttering. It's amazing how much stuff gets accumulated that rarely, if ever, gets used. Get rid of it
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    Xmas 2017 £1 p/day challenge No. 20 - £420/£730
    Make £10 p/day Feb £74.31, Mar £664.37 Apr £40
    • itsallabitmuch
    • By itsallabitmuch 16th Mar 17, 10:42 PM
    • 51 Posts
    • 80 Thanks
    itsallabitmuch
    Agree with the above advice. You say you're bursting at the seams, which is totally understandable - have you thought of looking at what 'things' you own, and deciding what you could get rid of? You can sell on places like Facebook, Shpock, Gumtree, eBay, etc., and find that you make a decent amount of cash with the added bonus of more space at home!

    DH and I started selling recently - I currently have £67 sitting in my PayPal account from items sold, and already have a load more space than we did. We've been putting things up one or two at a time on Shpock to get the reviews going, and have just today added more expensive items such as old mobile phones and furniture we really don't need having thought about it (we just wanted to get some good reviews up first to make people more willing to buy more expensive items from us).

    May not be a long-term benefit in terms of financial gain, but it's certainly worth clearing some space up in your home, and making some cash whilst you do it!
    • determined new ms
    • By determined new ms 17th Mar 17, 5:46 AM
    • 6,231 Posts
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    determined new ms
    Are you with a free charity for your dmp? 16 years for a dmp seems a very long time. If you're not then contact stepchange or paypal or christians against poverty

    I work in housing, specifically in helping people gain or sustain tenancies. I would say the rental market is brutal now depending on where you are in the country as compared to 5 years ago and if it can be avoided then do so. A number of my clients have had notice because the landlord wants their properties back for a whole host of reasons and as long as the LLs have followed correct procedures then there is nothing can be done. Housing is in short supply so LL who are renting properties get to choose between a lot of potential renters, so competition is fierce, deposits are very large and monthly costs will be much higher than you are paying on your mortgage.

    Working in the field I do I worry about if there was ever a time when we lost our house. Avoid it if you can.
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    • dollydimple73
    • By dollydimple73 17th Mar 17, 9:11 AM
    • 3 Posts
    • 0 Thanks
    dollydimple73
    Yes we're with Stepchange. The original time-scale was 8 years but we were unable to keep up with that payment amount so the time has increased. Our end date is currently 2026
    • nkkingston
    • By nkkingston 17th Mar 17, 11:25 AM
    • 419 Posts
    • 457 Thanks
    nkkingston
    It's tougher when you already own a property, because it limits your options for clearing the debt. Give yourself a bit of mental space to have a grump about your situation - it's okay to be frustrated that a situation you don't like is the best one for you. Wallow for a day, then put that stored up energy into something productive, like a massive clear out or a big reshuffle. See if there are any ways to use your current house better, by swapping a bedroom and the lounge, maybe, or what it might cost to add a sink to a bedroom to free up bathroom time in the morning (if it's an older house, you may find a lot of the bedrooms have some plumbing already).
    Mortgage
    June 2016: £93,295
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    • Money saving maniac
    • By Money saving maniac 19th Mar 17, 1:28 AM
    • 339 Posts
    • 656 Thanks
    Money saving maniac
    Yes we're with Stepchange. The original time-scale was 8 years but we were unable to keep up with that payment amount so the time has increased. Our end date is currently 2026
    Originally posted by dollydimple73
    You've probably forgotten just how awful rented is. Expensive and never ending, plus you are at other people's mercy.
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