Sold house, got 38k debt, 115k equity help!

egg345

Advice please!

Have sold house after 18 months on market.:j
Have 115k equity now.
Have 38k on credit cards. Bank have just offered 25k interest only loan b4 we knew sold as we were struggling with monthly repayments-never missed one but were using OD to pay off (crazy I know)

want to buy a property to renovate, no major works and resell quickly whilst living in mates house at cheap rent.(i know rent is crazy 2 pay aswell but have kids and cant do a property up quickly whilst living in it. will deduct rent paid from property sale profit)

we are planning to pay debt off immediately.:j
all cc's are cut up and we have had serious lightbulb moment! we have sold our cars too this month!

just want to know if this is the best way of using the money, ie is there something we should be doing with the 25k loan (£135 pcm payback - 7 yrs) in the SHORT term. should we use it still to put cc debt on and keep the whole 115k equity to buy and renovate house or invest elsewhere??

i think the answer is to carry on as planned and pay off debt as soon as completed but i wanted to check first.

also do you know what sort of mortgage to get for house to renovate and sell quickly please? house will cost about £160k to buy, how best to use the money we have?

Thanks so much you are all an inspiration.

CLAPTON

in the nicest possible way, can i say this board is about getting out of debt.
your question seem all about the best way to finance property development.. very worthy but you're on the wrong board
but as i'm writing, you say its taken you 18 months to sell your property, so why do you think that you will get a quite sale on your next property?

Willsnarf1983

here here clapton

my point of view would be

use the equity to pay the debts of, get a new mortgage and LEARN from your mistakes and don't rack the debt up again!!!

Will

egg345

ok, this obviously came across wrong...

sorry..............

the ONLY reason we have sold our house is to pay off our debts.

we realised we were unable to afford it after redundancies hit us both and then got into debt through living above our means, so we took the sensible step we thought and sold it.

reason it took 18 months to sell - we bought at height of market, property levelled out here and have an open cast mine proposed 10 miles away now, just been passed so no one has wanted it.

i was just asking if there was anything I was missing.

this board has been my lifeline, not posting but reading, working out all ways we could cut back....have sold cars, scrapped Sky, cancellled mobiles, changed utilities etc etc.

so hoooray i have come out the other side i guess but just wanted to know what we were doing was right.
it has been really hard to sell our family home but its our own fault for letting the debts mount.

CLAPTON

hope i didnot come across all wrong either

the point is only that you are looking at property development...absolutely nothing atall wrong with that but this is the wrong board.
there's lots of things missing before anyone could offer advice even if there was the expertise here...cancelling mobiles, changing utilities, scrapping sky is all great stuff but isn't much related to buying and improving and selling property for a worthwhile profit.
like is the market buoyant (no?), have you researched the market and know what sells, do you have the skills and can you do the work yourself, do you have any other income during this time, what happens if the market stagnates or even falls, or you go over budget on the improvements etc etc.



anyway best of luck what ever you decide

jcr16

i would say clear all your debts first then look around for a house with what u have left, maybe buy a house from auction. but i would certainly say don't take out a loan. it may only be £135 a month for 7 years , but if u pay it back early some loans ask for u to pay all thee intrest on it that u would of paid in the 7 years.

after paying credit cards your still left with 77k , ok so when buying u have soli fees etc to paybut u might be suprised at what u can find. thats alot of money u have.

or how about put it in a high intrest account for a year or so and build on it.

whatever u do , make sure u feel comfortable with your choice and u feel happy.

HTH