Advice needed please

backtomum

This is my first post. I have been reading for a while now and have just registered. I hope someone can give me some advice please. Over the years myself and my husband have racked up £25k of debt through foolish spending and also change of circumstances. We have been on a DMP with CCCS for the past few years and they have been brilliant. The problem for me is that the debt has hardly reduced. We now have some equity on our home [even though prices have reduced slightly of late] and have just sold [well about to exchange contracts]. What I am planning to do is sell, pay off the debts and basically start again. My mum has very kindly offered my family a home while we sort ourselves out. We will have about £30k left which I plan to put in a high interest account and we plan to save £1k a month. Hopefully in about 12 months we will have approx. £40k to put down on our next house and we will be debt free. Do you think this sounds a sensible thing to do. As you can appreciate I am having doubts as this is probably the biggest risk we have ever taken as no one knows which way the housing market is going - though the general consensus in the area I live is that prices are slowly dropping. We were considering taking out a bigger mortgage but we decided to take a risk because if the market does drop a bit we could retain some of our equity and also maybe get a bargain on our next house. I hope this post is not too muddled. Do you think we are doing the right thing. I do, but sometimes have massive doubts. It could all go terribly wrong but I suppose if we don't take the risk we'll never know.

tigerlily

I'm not really in a postion to offer any advice having never bought a house but just wanted to say good luck in sorting it all out. :T

sparkle84

I think this is an excellent idea, it gives you a fresh start with no debt hanging over you and lump sum to buy again with. House price won't be going up in the next year they mostly likely stagnate or drop so you won't lose out. You should ask CCCS to help you make full and final offers as you could save some more money that way. Remember the golden rule of MSE cut up the credit cards you don't want to feel "rich" again and start racking up the debts

Good luck

wigginsmum

Yes I'd say it's a good idea too; it'll give you a breathing space to start again with a clean slate. I'm presuming none of your debts are secured on your property? But will the fact that you're on a DMP make it hard for you to get another mortgage in a year's time? That's one thing to consider - I'm not sure how it affects your credit record, and it would be really difficult if you found yourselves unable to get back on the property ladder.

in*the*red_6

Hi and welcome

Have you looked into whether you'll be able to get a mortgage on your next house? Don't want to sound all doom and gloom but my understanding is that if you've been on a DMP your ability to get new credit is hampered for 6 years?