Would you sell your house to pay off your debt

ilovecheese

We sold back in August 2007, paid off mortgage and over £62,000 pounds of debt, I still wake up sometimes in panic thinking how lucky we were to sell when we did. Renting does give you more freedom, and once you get used to it it's great! There are no surprise costs or bills, if the boiler packs up or the guttering needs replacing, its not our problem and we don't have to pay! We also save money on building insurance and life insurance. I would definately recommend it! good luck on whatever you decide, and I totally agree with "savingholmes" make sure once you are debt free you stay that way!

ElleWoods

Hi Scarlett,
My house is going on the market this week, and although the main reason is I want to move closer to family and friends in an area with good schools for my son, I'm also planning to pay off my debts with the equity. I have around 4k of debt but only have around £10k of equity so it's going to be tight once all my estate agents/solicitors/removal fees are paid. However it will save me £165 per month paying the debts so I'll be better off on a monthly basis. I'm planning to start saving more once my debts are paid off so that in the future I can buy again, if that's what I choose to do (although I'm planning on renting long term, as I feel owning at the moment is like having a noose around my neck).

Like you I really don't care whether I own or rent at the moment, and as the houses in the area I'm moving to are more expensive to buy than where I am now, I made a conscious decision to rent rather than stretch myself even more on a mortgage I'd struggle to afford when rates start to rise. I'm actually really excited about the move and pray I get at least one decent offer on my house!

I think you're making the right decision. Let us know how you get on with viewings!

CC x

Bakewell_tart_2

We were in the same situation.We made a big mistake by going to a Debt Advisory company who managed to get us a very poor credit rating by their methods. We had always had a good one for over 30 years. We took the decision to sell the house and clear the debt and we now rent. We are able to move around if we wish much easier than selling a property. We sold at just the right time before the recession.It was a wonderful feeling to pay off the debt and not to worry about money all the time. We got our life back and will never get into that situation again.

Scarlett1212

Hi everyone, I've been really busy the last few days decorating etc. The flat is going on the market next week. It was a hard decision to make but once it was made time really is of the essence - I'm planning to price it competitively against the market in my area, and it is a nice flat so fingers crossed! Sometimes I do think I'm mad selling at a time like this to rent but when I weighed everything up it makes sense, we are going to make a fresh start and I might even get a good nights sleep for once. Thanks for your comments. I will let you know how it all goes.

Oh and I can't believe I'm on Martins' weekly email - that cheered me up no end!!

lrobertson19

Yes without a doubt i would do this. Sell pay off the debit and restart again .

I am going to do this myself. At present i am trying to do all the odd jobs to get the place presentable and then i am selling ,getting rid of it.

Heres to debit free

DevonGirl

On a similar note, would you sell your house to pay off PART of a debt? My debt buddy (friend at work who I've confided in) has £33k of debt is debating selling her house, to move to rented because this will raise (after selling costs) around £13k... So still leave her in quite a lot of debt. I'm not sure what to advise so said I'd ask the gang on here...

Current mortgage is slightly cheaper than the rent she'd have to pay so outgoings would increase, but she could offer F&F settlements to some of the smaller debts and lump payments from the £13k and only have a handful of creditors to which would then owe £20k. Sorry if not too much detail (not my debt!) but any ideas?
Thanks

Scarlett1212

Hi Devongirl. OH and I talked about leftover debt and we decided that we wouldn't sell if we were left with more than 5k of debt. 20k seems like it will still be a big worry for your friend - especially as her outgoings will increase. Is your friend single i.e. can she houseshare to get her outgoings down, or is it possible for her to move back with her family for a short time. F&F offers is an option but as I understand it they only consider that if you're in arrears already. Is she managing at the moment, or is she really struggling. If she's managing albeit with a limited budget I would probably say don't sell, if she's struggling and missing payments then I would consider it.

3puppies

hi all just reading through all the comments and yes id definately sell to pay off debts
unfortunately we are in negative equity! or id do it tommorow
but i also agree you need to learn where and how you got into debt and def dont make the same mistakes again
me and hubby have done it 3 times paid them off got them again ect except this time we did it big!!! £70,000
we are learning the hard way as we cant sell and have had to re-educate ourselves how to budget (properly) so far we have paid off £10,000 over two years
we could go bankrupt but for me personally i know i wont learn if i dont pay it back

a note to devongirls friend with £13,000 she should be able to do a full and final iva wher they split that money fairly between her debts contact payplan and they would be able to advise her
we use them for our debt management plan
good luck to all!!!!

Tiger_greeneyes

Scarlett1212 wrote: »

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.

I think you're doing the right thing, I would be doing just the same thing. It's a brave decision to make but £30k would take years to scrimp and save and pay back. It's not worth giving up 5-10 years (or however long it would take you to pay off) of having a life. There's definitely more important things than money Who knows, in six months time maybe property prices will have dipped even more which will allow you back onto the property ladder.

On another note, whilst I've cut up my credit cards, I've not cancelled them. Getting a mortgage requires a good credit rating. The more 'good' credit you have, the better your chance of getting a mortgage. I have four credit card accounts (but no cards to tempt me) in case I want to move and need a mortgage to do so. My husband didn't have any credit cards but he was turned down for a mortgage as there was nothing to prove that he was a good payer

Good luck and be happy :beer:

DevonGirl

Thanks to Scarlett1212 and 3puppies for their advice, which I have passed on to my work colleague. As she is struggling, I think she IS going to try to sell - not easy at this time but me and a couple of friends are going to help her do a cheap 'makeover' - sorting out odd jobs, buying cheap cushions/throws etc (!) to help her get the best price. I'm sure it's not as easy as the TV shows would have you believe but can't hurt to give it a go!

Thanks again