Selling up to pay off debts??

Tuscan

Hi all

not been on this part of the forum for a long time but im back here asking for your thoughts again.

Quick reminder

been on a DMP for about 6yrs and been in the main part a good plan and current pay in £450 a month apart from Natwest who would not except any payment plan and went for a charge on my house, they never got it but i still ended up with a CCJ and a additional monthly payment of £250 and Natwest continue to hit with me with enough interest etc that hardly a penny gets paid of the 26k i owed them!!


anyway i could rock on about Natwest for hours but i cant be bothered any more lol.

so we have a house in area we had and have never planed to stay in as bought in 2001 as a live in investment and has paid off with around 100k in equity after paying off mortgage and a couple of secured loans we also have, we have wanted to move to rural Suffolk for some time now and property is cheap to buy and very cheap to rent.

The plan now

well we have had pretty much enough of the debt noose around us and now also have a young Daughter so think the time to cash in and move is coming fairly soon, we estimate we owe around 40k depending on settlement figures may be a bit less, so we could sell up and clear everything and still pocket around 60k:j however it would mean us stepping off the property ladder and renting as doubt we would get another mortgage with the CCJ and several defaults on our credit file, property in the villages we like are cheap 150k-170k so with a big deposit i hope it will be possible to buy again after a few years of being debt free and clearing up our credit file, but im worried at the same time we wont as the banks are so stringent now days on lending although we have never missed a payment on our current mortgage. also have some concerns about failing a credit search for a rental property although we will have enough cash to pay what ever it cost up front to secure a land lords trust as long as the money is protected.

by doing this we will be some were around £1000 a month better off after all outgoings and zero money worries so really am finding it hard to see a reason not to go for it, but as above do have some concerns..


anyone else done this or have some views on the idea??

thanks Guys

Trollfever

Escaping from the mortgage debt pit does have benefits.

Tuscan

not the mortgage im wanting to escape from its all the other Debts, mortgage is only £475 a month..

KingElvis

I would pay sell up, pay up and then start again.

Good luck.

Hannah_10

What puts a lot of people off doing what you're proposing is simply that a lot of people aren't confident with breaking conventions. We're told over and over and over again that we have to buy our own houses until we accept it unquestioningly. If you stop viewing house ownership as a holy grail and be plainly practical about it there does not appear to be one reason at all to keep hold of it. In real terms that's a grand a month hanging round your neck like a rotting albatross for what? I expect you like owning a car but would you pay a penny more for the priviledge (and repair bill) if leasing a car got you a better car for a lesser spend?

I consider money management to be about obtaining the best possible quality of life for myself/ my family, within my means. If you look at it from that point of view and ignore conformity for the sake of it then selling up becomes a no-brainer.

Marisco

You're spot on there Hannah! I've never understood this obsession of getting onto "the property ladder"!! I've done both - owned and rented, and there is no difference, until it comes to repairs, then someone else pays for it!!;)

Tuscan

yeah i agree, to be a grand a month better off will make a huge difference to us, however i still want to buy a home again as will be paying out on rent so might as well be paying a mortgage but will only be a small mortgage as will have 50k+ to put down on say a 160k house.

for us its a means to a end, we could stay here and continue paying of the debts for 6-7 more years and still not make a dent in the 26k that i owe Natwest, although the other debts would end but we dont want to live in the area we are now anyway and will move sooner or later as its going down hill fast and the schools are going the same rout so i see little point in staying here and in debt.

i was only saying to the Mrs today, if we stay here for 6-7 years and pay off the debts over time at the rate we are now we will still want to move at the end of them and will still face the same issues with a new mortgage then as we will now because the bad credit will still be fresh on the file, were as if we move soon and rent then with in say 4-5 years or less the paper trail of the debts will be long gone and we will in a fairly strong position to buy again as will have a very large cash deposit. not to mention we would be well settled in the area we love and the daughter will be settled in school etc etc, seems theres very few negatives about doing this as long as we dont have any problems renting..

Hannah_10

A bad credit rating is only going to harm your renting situation if you get credit checked. Until you try it you don't know so give it a go, you might be surprised. If your credit rating really does look THAT bad then you can rent from a private landlord (which accounts for the bulk of the market in my area) as they do not have the means to do credit checks, nor the inclination largely. A reference is more important most of the time, and so without a previous landlord to ask for one then an employers reference saying how long you've worked there and that you're an upstanding and respectable person is usually as good if not better. Also a private landlord is a human being, who could well have had money troubles themselves and I would bet that if you explained the situation and how you solved it and are now better of that they'd look at you differently- expecially with a reference and good deposit.

Tuscan

thanks

im self employed so cant a ref from work but can from my chartered accountant..

have been told that if im up front and tell the truth to the letting agents and offer say 6 months rent in advance plus a good deposit then there's not normally many issues as at the end of the day money talks and most landlords will bite my hand off for a large amount of the rent up front.

im hoping this is the case:)