Should we sell our house to pay off our debts

kateb29

Hi All,

My husband and I have about £47,000 debt between us and it is eating up a lot of our income every day we are scraping the pennies and cant do anything with our two young children, my husband has a well paid job and we worked out that if we were debt free we would be £2000 a month better off! We have about £60,000 equity in our house but the mortgage company wont let us borrow anymore however if we were debt free they would lend us up to £300,000, so we were thinking that if we sold our house and paid off our debt we could go into a rented house for about 6 months and save like mad and then we could buy a nicer house and be debt free. I am really not sure but my husband is keen on the idea I am not sure about coming off the ladder and taking such a big risk, what are peoples thoughts, I need advice or reassurance.

DarkConvict

If it was not have having 2 kids, i would say definitely do it, its just moving house is alot of hassle.

Remember taking out a mortgage, you are paying nearly interest only to begin with so would you really be better off? Remember you are turning unsecured debts, into secured debts and putting your home at risk.
Also you will have selling fees and stamp duty and 2 lots of removal fees that could easily swallow between £5-20,000.

If you are in rented, you have rent to pay whilst having to start saving for a deposit again. Mortgages are on the increase but you would probably be looking at a 20-30% deposit required to be built up.

DVardysShadow

kateb29 wrote: »

Hi All,

My husband and I have about £47,000 debt between us and it is eating up a lot of our income every day we are scraping the pennies and cant do anything with our two young children, my husband has a well paid job and we worked out that if we were debt free we would be £2000 a month better off! We have about £60,000 equity in our house but the mortgage company wont let us borrow anymore however if we were debt free they would lend us up to £300,000, so we were thinking that if we sold our house and paid off our debt we could go into a rented house for about 6 months and save like mad and then we could buy a nicer house and be debt free. I amif we were debt free we would be £2000 a month better off really not sure but my husband is keen on the idea I am not sure about coming off the ladder and taking such a big risk, what are peoples thoughts, I need advice or reassurance.

So you are paying £24,000/year on £47,000 debt. You must be paying it down to some extent then.

I would suggest that the first thing you do is fill out a Statement of affairs http://makesenseofcards.com/soacalc.html. This will help you see the whole picture - and if you post it here, people will help with advice on cutting your costs and managing your debt and will give a view on whether there are other solutions besides selling the house.