Do I sell my home to pay off some debt?

newkitchenfund

An obvious solution is to sell the car if you don't have enough money for petrol anyway...

To be honest, this sounds like a complex situation and I think you'd be best talking to a debt advisor e.g. Citizens' Advice Bureau.
All the best.

ashleyriot

It's a one-time thing but you will have to stump up one month's rent ahead of first payment as well as a security deposit and any other letting agent costs they may put at you.

I agree with the above: your DMP may be set too high if you can't cover essentials but it does sound like petrol is not the priority so maybe having a car is lower down the order in which case, sell it (or sell it for something cheaper).

You are on the property ladder and it's not an easy place to arrive at: I'd be doing everything I can to try and stay there.


The best of luck to you .

YORKSHIRE_GUY

I'd think really hard before giving my home up.
If you have had your mortgage a few years, then you could look at remortgaging. Borrowing a bit more and extending your mortgage to 30 years. As long as it's paid off before you retire. If, for instance, you could pay off the loan in your mum's name, then not having that amount to pay out each month, could mean that you manage ok.

Take a look at your direct debits. Do you pay for an expensive TV and broadband package? Gym membership?

countpennys

It sounds like you are in a difficult place at the moment and I hope you find a solution that works for you. Personally if it was me I would do everything possible to keep my home. I would sell anything I didn't 100% need, and talk to my bank and mortgage lender to see what help they can offer. Rent is not a cheap option and with house prices increasing I would be worried that I wouldn't be able to get back onto the property ladder again. I currently only live in the city Mon-Fri and go back to my home in the country at weekends, I rent a spare room which I found on spareroom.co.uk, I have 4 nights in a friendly home and both of us have our space at weekends, is this something you could do ? Good luck and hope things work out for you

happyinflorida

Who've you got your DMP with? If they haven't left you enough money for food, petrol etc each month they haven't done their job properly or are you both spending on something else?

You need to cut your expenditure down - work out your out goings in full, write it all down so you can see your big expenditure and the big picture. Work out what you do and don't need and that way you can cut down.

Is your car essential?

I wouldn't sell your home. How many bedrooms have you got? If there's a spare one, how about taking in a lodger? That would give you more income.

How much are you spending on your phone contracts? Cut them down as soon as possible.

lisa701

lauren101089 wrote: »

That leaves us with about £20,000 equity, were already on a DMP and pay £80 a month but with the 20k I was thinking of leaving the DMP and instead paying off my car finance (approx £7000) and a loan in my mums name (£11,000) which would free up £445 extra a month which is the saving in monthly payments for paying off debt.

Bit confused, you say you are on a DMP @ £80 per month but by selling your house and equity to pay off your car & other loan you would save £445 per month. Do I take it the DMP is for something else and not these two loans?

If they are included in the DMP then you would only be saving £80 per month as thats all you are actually paying out, not £445 as that would be the "normal" repayments which you are not paying.

Anyway, I'm in a similar situation as you. I'm with Step Change but several times they have advised me to sell my house and use the equity to repay my loans. I've looked into this but its not an option. Houses are just not selling by me, and when they do its for rock bottom prices. By the time I'd repaid my mortgage, associated fees and put the deposit on a rental property I'd not have enough left to repay my debts. Don't see the point of going through all that to still be in debt. For now I'm sticking with the DMP and hoping I will be able to increase repayments at a later date.

I'd try and stick it out, cut back where you can and if you can re-mortgage (although that may not be possible if you already have defaults against you). Selling your car may be an option but in reality you would not get anywhere near the amount you paid for it so would be unable to repay the outstanding loan.

Maybe speak to the people you have your DMP with and see if they can reduce the repayments

joehoover

Definitely not, your home is the biggest security you have. You may be in no better position renting. I just bought my first flat and am saving £250 a month compared to renting, but to not have the uncertainty gone of will the landlord put rent up, will he sell up, I am much happier. The fees alone when you have to rent a place can set you back months to catch up from paying it and then how will you save again if you would only save £80 a month, you may never get back on the property ladder.

You say it is a house and don't mention kids, do you have a spare room you can rent? Your car isn't as important as your home, at least not one worth £7000, this should go first.

Look to sell anything you don't need, even if this is things like DVD's, anything. When I moved I had to declutter as not enough space as I had renting, but you realise you may have so much you really don't need. Not only do you save money but you clear physical space and mental space in your head, you focus more on what is important and what isn't, that all helps you judge where your expenditure goes. Look at every outgoing and see if you can cancel it or reduce it, I saved over £100 a month from changing TV package, mobile package and buying a travelcard instead of topping up, all that took half an hour to sort out.

alisonjanea

As the others have said, I would definitely fight to keep from selling the house. I think you will regret it.

What about looking for extra part-time work to help pay one of your debts off early? Bar work? If you are free at weekends then maybe a Saturday shop job? Worth looking on local Gumtree or in your local newspaper

Look around the house and see what you can sell on ebay, have you got any books you don't use that you could sell on Amazon?

everything

Hi, from reading your post, it seems your DMP doesn't cover all your unsecured debts. You should be able to renegotiate your DMP to include all your debts (not sure about the loan in your mum's name though). This, along with selling your car should help massively.

What's your combined income?

Marg

In my experience selling your house would be the start of a slippery slope and you should hang on to it if at all possible. It is undoubtedly tough but at least you have a consistent roof over your head.

As others have said, look again at all your other options, renting any spare rooms, selling your car and getting a cheaper one if it's absolutely needed. Could either or both of you get a part time job or ask if there are extra hours available at your current job?