selling up to start a debt-free life- scary!

Prosaic

Hi all

Hope someone on this board will give me some words of comfort

After deliberation over Christmas, we decided to sell our house

We moved here in 2006, borrowing more money, I think now to 'keep up with the Jones's' - we have 2 kids at school & my wife pretty much gave up work as they were pre-school then

Since then through our own carelessness we built up just over 30k of unsecured debt on credit cards etc. I can't tell you how much I've sat worrying about it

Due to the recession & us being on a tracker the mortgage payments went down quite a lot, enabling us to make minimum payments & get by every month ( just) with nothing left at the end. We've not had a holiday since and gone down to one car which we must keep as my son needs regular hospital appts. We are on a tracker deal which expires in Aug & paying 0.85% which is going to go up considerably at the end of our deal = pushing us into financial problems meaning we'll probably have to go on some kind of payment plan

Anyway over christmas we were talking more about it & both decided neither of us really liked where we lived anyway

We sat & worked out it would take till we both retire to pay off these debts ( we are both late 30s)

Living here is making us both miserable, and we decided if we are unhappy that will affect the kids

We decided to put the house on the market. It has recovered some value, but still lost 15k on what we paid for it. However the asking price gives us enough money after fees etc to pay off all our debts

We can rent a similar sized house for the same as our current mortgage in a nice area 10 miles away with good schools. I am about to get a promotion & my wife is going back to work part-time as the kids are at school, so we plan to save & think within 3 years we could get our own place again

I put the house on at a competitive price & got the asking price within 2 weeks!

Now the nerves are kicking in

I really dont want the kids to tell me when theyre older how I wrecked their future by selling the family home, but we feel like this debt is like a form of slavery

I spoke with a mortgage advuisor, explained it all & she said ' well if it was me, id stay put, house prices could rocket up & you'll never afford to get back on the market' - I told her we were unhappy & she said ' well if it was me I'd just put up with it'!

A few of our friends know our plans and they say ' do whats right for you' - we cant tell our families as we're embarrassed about the amount of debt us supposedly 'responsible' adults managed to accumulate

Do you think we're mad doing this?

thanks

katsu

The only person who knows what is right for you, is you. If you are both not happy and will both be happier (and debt free) renting, then why not do it?

My advice FWIW:
* Do you understand why and how you got into debt? Will you not do this again? You don't want to be struggling to pay the rent in a few years and in the same boat.
*If your wife found a job where you live would that make enough difference financially for you to see if that made you happier when you were not struggling so hard to pay bills?

As you have explained it, the idea of being able to clear your debts is very attractive. If you are sure you will not run up more then it sounds sensible.

Prosaic

Thanks Katsu

She had a well -paid job before the kids were born & took a career break while the kids were babies

I think we both tried living as though we were a full-time working couple and not notice the effect of having kids & all the extra expense that goes with it

My job changes in May, which is essentially a pay-rise, and both kids started full time at school this month, so she's going back to work 3 days a week. Our plan is to live on my salary, as we have last few years and save hers

The sleepless nights we've both had over it all are not worth it. It's affected our time at home too, as we're so wrapped up in all this we both realise we neglected the children

We both can't go on like this for years on end, and have decided there's more to life than being part of that set who bore you constantly with our much their house has increased in value since they bought it

thanks

SuzySu

Why would selling the family home "wreck the kids future"? I think that being in debt would be more of an issue regarding their future if you feel you won't have spare money for school trips, new clothes for them etc.

It sounds as though you are making the decision for your family, rather than just yourselves so you need to do what feels right. It's probably ok for that mortgage advisor if he/she is not struggling for money.

I was in the same position as you are a couple of years ago and had to sell before the house was repossessed. I now rent - ok the area is not my first choice, but it's near the childrens' school and walkable to the mainline station and near where I work. I am not debt-free, but christmas was paid for with cash - nothing went on a credit card and I have money left over at the end of each month which I can put towards my debts.

Good luck with your situation.

lamarsi

I think you've thought this through well and have made the best choice for all your family, i can't imagine your children saying you gave us a wonderful childhood but where's the inheritance? i certainly told my folks i hope there's nowt left when they go and they've enjoyed themselves whilst here, I'm certainly enjoying having them and that's priceless, the mortgage advisor.. well the clues in the name if you have no mortgage well then she's redundant to you.. good luck!

Prosaic

Thank you guys, I can't tell you how much i appreciate it

You know, when i was younger, listening to my workmates telling me 'get yourself on the housing ladder' and bought my first place at 23, I had visions that as I head toward 40 I'd be 'sorted' in life..oh well

I went to the mortgage advisor as I was worried I might be overlooking something major. She was totally dismissive of the idea, but as i said we have both chosen not to discuss it with our families. Both sides are pretty matrialistic, & they'd see us as 'failing' - I think thats partly why we got in this mess, and I dont want to be looked as 'the poor relation' - we've said we're moving and renting while we look for the right place - not a lie, just leaving out some of the finer details lol

The stress of it all has made me feel like I've aged years over the past few months, my wife was unwell recently and we both think life should be enjoyed, not endured

I just checked our credit report online & theres nothing obviously 'adverse' as we've always ticked over, so hopefully thats ok for the credit checks with letting agencies

Hopefully the kids will appreciate what we did & not ask us when theyre older why we havent got our own house..kids have so much these days. They will have 2 loving parents though

Sorry to ramble on, not been getting much sleep lately

Trollfever

I spoke with a mortgage advuisor, explained it all & she said ' well if it was me, id stay put, house prices could rocket up & you'll never afford to get back on the market' - I told her we were unhappy & she said ' well if it was me I'd just put up with it'!

She would say that!
Escaping from the mortgage debt pit does have advantages.

ERICS_MUM

You can't live your life to "satisfy" a materialistic family who have not been close enough to you to realise you might have problems and worries.

Nor can you live your lives to avoid anything your children might (or might not) say in 15 years time. Your priority is to provide them somewhere safe to live and a warm & happy family environment in which they can develop into adults over time. I don't think owning your house is necessary to achieve this, but I would say that your debts are getting in the way of achieving it. (Hope this paragraph makes sense, I can't word it any better).

I might be completely wrong here but I suspect that after the current property crisis subsides, people will decide to rent rather than buy.

Good luck with your decision, it's a hard one.

Linda xx

Norfolk_Jim

Kids can't expect to inherit a house like it was some kind of automatic thing. Its a lucky break if they do but being raised from birth to whatever is a great deal in itself. I inherited nothing from my parents, and didn't expect to. I told them to use their money to look after themselves, not worry about leaving something to me and it hasn't ruined me - I've managed that on my own.
Selling up as you are doing seems very responsible and hoperfully your kids will do well, get great jobs or start businesses and not need to inherit the house 'cos they've made it on their own.
Mine get Love, encouragement, acceptance, our full backing and everything else we can manage but they understand from early on where they stand with us.
Like you, we are selling up due to 1) debt 2) increasing living costs and downsizing. I view my house as a potential help with my non existant pension.

Prosaic

Thanks everyone, glad its not just us who think its the right thing to do

I look around and other people seem so 'sorted'- I work a 50hr week & yet we never seemed to achieve it

I've come to realise that this 'own your property at all costs' is just a form of slavery

Made a CC payment yesterday of £105 - £96 quid of which was interest. It will be great to see the back of it

Trollfever

I've come to realise that this 'own your property at all costs' is just a form of slavery

How many hours a month do you have to work just to pay the interest on all your borrowings?