Should we sell our house and rent??

hettiecarro

Hi
Owning a property is not worth a light if you have to split it when your family breaks down. See if you can get some time (preferably without the kids) for the two of you to have a full and frank discussion about it.
This sounds a bit fanciful, but when I worked as a Sales Manager I was taught a technique to help buyers make a decision as to whether to buy my product or not. You literally (and honestly) draw up 2 lists. One with the pros (in your case selling the house), and the other with the cons. Whichever list had the most items on should be your decision. I use this regularly in my own life, and although it seems simplistic - it does help. Don't be hurried into jumping the wrong way.
Nothing drastic is going to happen in the relatively short space of time it will take you BOTH to come to your decision.
PLEASE keep on posting - for further advice - or just support if you should need it.
Hettie
xx

dancingfairy

I'd be looking at how long it would take if you continued on your current dmp but saved up to make full and final settlement offers. As the debts are quite old you may be able to settle around the 30% mark. It depends how much you are paying into the dmp compared to what the minimum payments would be, obviously if you are making a small payment compared to the minimum they are more likely to accept a settlement. The fact that the debts are 7 years old might go in your favour though as your creditors might be able just to settle and walk away. It's worth a shot. You don't even have to offer on all of them, you can start with the biggest and work your way down (or even the other way but it's probably better to try and get the bigger ones sorted first).
National Debtline has a really useful factsheet on making full and final settlement offers.
Let's say you could be debt free in 1-2 years with settlement figures, how long would it take you to save up for the conversion? another few years?
Now compare this to selling up and renting. What will work best for your family?
Best of Luck whatever you decide.
df

natlie

Hi fastnet just wanted to say that we are doing this too just waiting for estate agent to take photos and our house should be on the market by the weekend. we have done this as we already rent and or tenants are moving we can t deal with the hassles anymore. Or rental house is amazing and huge and we would never have been able to buy a house like this and it does feel like home. Just waiting now...
Nat

originalkat

I was in a similar situation after being made redundant, unfortunately without a big pay off. I knew within a few months I would be repossessed because my only income was jobseekers allowance of £71 and my mortgage alone was ten times that and other bills were stacking up. I got rid of the car, televison and pared my spending to the bone but I am single now and in my 50s so I had to make some serious decisions, I was very emotionally attached to my house, it was meant to be my 'forever house' but I decided to sell so I had some control over the process. Two years later I still can't walk past 'my' house but the sense of relief the day I completed the sale and was debt free with some money in the bank was amazing. I had enough to buy a near derelict one bedroom property, no bathroom, heating etc and started camping out there living on my JSA. I have now found another job and I am gradually bringing the place up to scratch.
Everyone must make their own choices but I would say the stress of debts must be affecting your family life and when the children are older that is what they will remember not whether you owned the bricks that made their bedroom. In your shoes, I would check my credit reports, get the house properly valued, spend a day working out what I will realistically get from the house sale minus all expenses and the cost of renting somewhere plus a little for emergencies then work out how you can share the balance among your creditors as full and final payments. Your local Citizens Advice Bureau will be able to help with this. Start saving as soon as you move and after 6 years when your credit record is clear you will have a good deposit to get back on the property ladder. Don't worry what the neighbours think, it's not their business and you are just moving to get a larger house and will buy again later, that's all they need to know, if anything. Good luck with whatever you decide.

originalkat

Forgot to mention, I agree with previous posts that you may not need to pay the full balance and the CAB money advice centre can often get you a better deal, an offer on your behalf made by them seems to carry more weight. Also have you reclaimed all of your bank charges, PPI etc etc?

Teacher2

A consideration here is that if you are making interest only payments on your house you are effectively paying rent as it is. Unless you can switch to capital repayment you are not actually buying your current property and will never reach the nirvana of outright ownership with nothing to pay on your house at all.

This being so, why don't you sell the house and pay off your debts?

I calculate that between the two of you you bring in just over £5000 a month which is a lot of money. With no debts you could afford £1500 a month on housing, live on £2500 and save £1000 towards a deposit for a property. In four years you would have £48000.

You would have to be disciplined and indulge in no backsliding but it sounds af if, with all the hard lessons you have learned, you could do it. Put the money away in a higher interest account out of your own reach.

Good luck whatever you choose to do.

therixonator

Yes this country is obsessed with owning property, but whilst it stays that way and the country comes out of recession they will trend upwards. Trying to buy a bigger house than the one you own now maybe be very difficult for you in a few years time. That would be my biggest concern.

With the extra money the pair of you are now bringing in, can you try and see if you can get a better mortgage deal? You getting a job, your partner getting a pay rise and your debts being a bit older are all changes to your circumstances that banks will look favourably on. They'll probably want a repayment mortgage these days, but that is money that's paying back debt which is a good thing so long as you're paying back the higher rate debts first of course.

If you can stick it out in your house for another year or 2 on a repayment mortgage you'll be in a much better place to buy a 3 bed house.

Being debt free is a great goal to have, but getting there as cheaply as possible with all your assets paid for is key.

beanielou

As I see it if your mortgage is interest only you are only renting anyway.
A hard decision, only you can make.

therixonator

beanielou wrote: »

As I see it if your mortgage is interest only you are only renting anyway.

Not true, an interest only mortgage means you've borrowed money and invested it in property and have an arrangement with the bank where you only service the debt and don't pay back the capital at this moment in time. House prices go up, your investment gains, house prices go down, your investment loses.

Renting means you have no investment in property.

beanielou

therixonator wrote: »

Not true, an interest only mortgage means you've borrowed money and invested it in property and have an arrangement with the bank where you only service the debt and don't pay back the capital at this moment in time. House prices go up, your investment gains, house prices go down, your investment loses.

Renting means you have no investment in property.

But if you have no likelihood in changing IO to repayment in my opinion it remains as if you are renting.
That is my view & we can all have our own views.