want to move house but in debt

lasata

hi im hoping for some advice. my husband and i aren't happy in our house. we arent from this area and just feel like we have never really fitted in. we want to sell up and move but we are in a lot of debt (well its a lot to us anyway)

we have about £65k left on the mortgage, a £9k loan and 2 credit cards totalling £11k ish. we have no savings and live week to week on our wages. we both work full time im self employed my husband is employed. we really want to move but dont know how to go about it. our home is clean but old and shabby but we cant afford to do it up. we manage all our bills although we have a lot of debt nothing is in arrears and hasnt been for years.

where do we start ???

would we be expecting too much to think we could sell this (now valued at around 90k and use the left over for all the legal costs and a deposit on a new house. do u even need a deposit on a new house if we already have a mortgage. this was our first house so we have no experience at all. ive suggested we just sell it, get rid of all debts and then rent but my parents say we are mad to even think about coming off the property ladder. i just dont know where to turn. you see so many of these write of ur debts / sell ur house quickly places i just dont know whats a real help and whats going to rip us off.

sorry this is so long and sorry if its in the wrong thread.

any help would be great i cant sleep for thinking eveything over.

xx

kingstreet

You will need a deposit of at least 10% to get anything like a decent mortgage deal on moving.

If you can sell for £90k, you'll be left with £5k after your debts are repaid.

All I can suggest is you rent for a time to build up your savings to create another deposit.

my parents say we are mad to even think about coming off the property ladder

Many areas are still seeing the value of property reduce. Their opinion only holds good in an area where prices are rising.

you see so many of these write of ur debts / sell ur house quickly places

The former will see you unable to get a mortgage or other credit for at least six years and the latter will eat up the equity you need to settle your credit commitments. Avoid.

jc808

you cant move to another purchase - sorry

sell up/ settle debts/ move to rented - most likely

chopper78

You *can* move if you have debts if they are all 'normal' loans and credit cards and you are not defaulting on them, missing payments or otherwise being delinquent with them. However, the monthly payments you are making towards the debts are taken into account on your affordability score. (I am moving house, I have £18k of debt - about £12k on a loan and £6k on a 0% credit card). They used the monthly payment on the loan and 5% of the credit card balance as my monthly payment towards that. And even after that, they decided that I could still afford the new mortgage on the new house. (Partner and I earn a combined £70k annual wage so that is why it is possible).

What you could do is use some of the equity in your current property to pay off the credit card debt, leave the loan in place, which should mean you'll have a reasonable deposit to move with - but that depends really on whether £90k is really what your house is worth, or what you want for it but may not realistically achieve. If an EA says £90k, then it may only really get decent interest if marketed at £80k.

MrRee_2

You probably cannot see the wood for the trees, so I will be straight with you - in my opinion you should:-

1. Sell

2. Pay off all debts

3. Rent a house which makes you happy

4. Save

I would not worry about the old fashioned view that you must at all costs stay on the property ladder - prices are not rising. Your savings will be rising faster than any house price increase so you are winning each and every month!

It is so clear to me, but I understand your confiusion.

Good luck!

ItMightBeUsefulOneDay

lasata wrote: »

hi im hoping for some advice. my husband and i aren't happy in our house. we arent from this area and just feel like we have never really fitted in. we want to sell up and move but we are in a lot of debt (well its a lot to us anyway)

If you're already living hand to mouth on your income then moving to another bought property is pretty much out of the question. It costs serious money to move and right now those debts of yours are pulling you under.

If you want to move now it's going to be to a rental property unless you can clear those debts by paying them down (avoid the scammers who promise to "get rid of them"). Go over to the debt free wanabee forum and post up your SOA. Lots of good advice over there on "snowballing your debt" and cutting your outgoings in order to make good inroads into what you owe.

Staying put in a place that you hate for a prolonged period will be hard and potentially demoralising experience. It becomes all too tempting to "treat yourself" in such situations which often makes the financial situation worse. If things are bad I would seriously consider selling up, clearing all your debts and making a fresh start. With no more interest to pay (on your debts) you could find yourself in a much better position financially in a few years with a good deposit to put down on your next house in an area you know and like.

ognum

I agree with the peple who say sell and then rent but do remember you need to be credit checked to rent and your passed debts wont help that. You need a deposit for a rental and your rent may be more than your mortgage. Your figures are based on what you hope to get not what in reality you may get.
You may be better to stay put try to pay off your debts by getting a second income selling some 'stuff' or perhaps move in with parents and rent out your property until you have sorted out your finances.
Sorry if this sounds harsh!