Would you sell your house to pay off your debt

Scarlett1212
Scarlett1212 Posts: 35 Forumite
edited 12 May 2009 at 7:10PM in Debt-free wannabe
Hi everyone, I am in over 30k of debt and have around the same in equity in a flat we hate living in, we are thinking about selling up and starting again but i don't know if it is a knee-jerk reaction to the debt or a good idea - keep changing my mind. We would rent for a while and be able to save for a deposit for the future - another reason we are thinking about doing this is that our mortgage is now on a tracker (0.75% above base rate), so our mortgage is low at the moment but that could change at any time and we would be in trouble as we are just getting by at the moment. We can't change the mortgage on to a fixed rate due to the debt. What would you do? - need some fresh eyes here.

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Comments

  • gillian46
    gillian46 Posts: 50 Forumite
    If you hate living in the flat then I would sell in a minute. You can always get back and buy another house at a later date. If you are struggling to cover the mortgage now with rates so low then you should sell. Find somewhere to rent where you are happy.

    G
    :j [/COLOR]
    01/07/03 £115,000 original mortgage completion date July 2020
    2/07/10 £63657 MFD now 12/2014 five years seven months early :j
  • *Vikki*
    *Vikki* Posts: 1,303 Forumite
    I would sell it!
  • Buddingblonde
    Buddingblonde Posts: 837 Forumite
    If I thought that selling my home would clear off all my debts free and clear then I would go for it!
  • Tixy
    Tixy Posts: 31,455 Forumite
    Considering you don't like it anyway I think it may be the way to go. Have you checked you can rent somewhere you would prefer for a similar amount to your mortgage (although of course you will have some extra money from not repaying debts).

    Also don't forget that some money will be taken up by estate agents fees, solicitors fees, home information pack fees and moving costs - could be around maybe £5k so you may have enough to repay all debts.

    Also don't forget it could take some time to sell in such a depressed market.
    A smile enriches those who receive without making poorer those who give
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  • patchwork_cat
    patchwork_cat Posts: 5,874 Forumite
    Without doubt. Get out and start again, clean slate. Peace of mind and not having years of hardship is worth a lot. Only thing is learn from it and don't get in deep again as it will be a while until you have that sort of equity in a property again.
  • Primula
    Primula Posts: 953 Forumite
    I would sell and then I could sleep at night again! I'd also make sure to cut up all the credit cards etc which got me in the mess in the first place and vow never to go there again!
  • Kudox
    Kudox Posts: 429 Forumite
    I would sell, in fact am considering doing so.
    DMP Support Thread Member 238 :D
    DMP started October 2008
  • Scarlett1212
    Scarlett1212 Posts: 35 Forumite
    edited 7 May 2009 at 7:58PM
    Thanks everyone for your replies, you have helped clear my mind - I think one of the things that was worrying me was coming off the market as I have owned one way or another since i was 22 and only rented a council tenancy before that, so i'm not sure what renting privately is like - but I will be finding out. I've already cut up my credit cards - and i will cancel all bar one (for emergencies only!!) when they are paid off. Thanks again.
  • Toto
    Toto Posts: 6,680
    First Anniversary Combo Breaker
    Forumite
    I did just that scarlett, I sold in January of 2007. We were in a house which was too small and had a bunch of debt from starting a business. So, I found this rental place we're still in, and sold.

    I'm glad I did, I sold before everything started to fall apart in the housing market and cleared all of my debt in an hour after completion :)

    I was worried about coming off the ladder too and I had no clue how rented would be, but I've found that being debt free gave me choices I didn't have before. We can stay here, probably till I'm old and grey if we like, we can save up a deposit (which we have been doing) and we can choose when and where to buy again. We might leave the country, we might not, but we have the freedom to make those decisions much more easily now.
    :A
    :A
    "Everyone is a genius. But if you judge a fish on its ability to climb a tree, it will live its whole life believing that it is stupid" - Albert Einstein
  • Scarlett1212
    Scarlett1212 Posts: 35 Forumite
    Ho Toto,
    I am starting to think of renting for a while as being quite liberating, I have had a mortgage for 9 years and as I have an 11 year old son I think I acted too old for my age for most of my twenties - and then went a bit mad the last few years getting into this massive debt. It will be good to sit back and take stock for a while.

    Hi Tixy, I've thought about fees - I reckon around £4k, my debt/mortgage is going down over £1k a month and I don't expect to sell for at least 4 months so this should be okay, also I'm basing my equity on the market going down a further 5% by the time I sell so hopefully it will work out - but I will have to wait and see - the best laid plans and all that.....

    I have looked at rental properties in the area and we can get a semi-detached for about the same as our mortgage when it was 5% apr - so higher than our mortgage at the moment but only while rates are so low - and that won't last forever.

    Anyway, OH and I have sat writing a list of small jobs that need done around the flat and we are going to get stuck into them at the weekend - hopefully by this time in a fortnight our flat will be on the market - god that gives me tingles just thinking about it - wish me luck, I might need it!
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