Do I sell my home to pay off some debt?

candycan

I was in this situation and took a part time job on top of my full time job (a few shifts in a pub) and so did my partner for a while (he did some weekend work). It gave us some time, enabled us to keep the house. Hard work for a while, but it got us sorted. It was only for about a year and in that time we were really careful about what we spent.


Follow the rest of the advice others have given you and you really can make it work. If we had had to sell the house we couldn't have afforded to buy it again a year later as the property prices had increased by 25% in that time plus the costs and stress of selling and buying again would have been horrendous.

fatpiggy

Sell the car for a start, pay back the loan then if you REALLY need a car, buy a much cheaper one which will probably be cheaper to run anyway. I always buy with cash, saving up for the next as soon as I buy one. I buy at 3 years old. My latest cost £3000 with only 29K on the clock. Its only a 1.1 but it gets me from A to B and is cheap to run, insure etc. It is quite happy to cruise at 70 on the motorway and since that's the legal limit, I can't see the point in spending extra for a bigger engine.

You absolutely must look at your outgoings and see where you can cut back. You are lucky to have a partner as it is cheaper for two to live than one. I spent 12 years living on £10 a week and I certainly didn't starve. Even though I am free of my financial burden, old habits die hard and I still buy from charity shops, and shop at the supermarket looking for reductions etc.

Take in a lodger if you can and look for other ways to earn money. Pet sitting, dog walking maybe? Don't sell up though. You probably won't get anything like the house is valued at and the fees will eat into the final sum. You will find it near impossible to get back on the property ladder again (and I should add that I am not a person who things owning a house is the be all and end all). Renting is fine if you have a good landlord, but you could find yourself moving at least once a year and there are costs associated with that.

jmr86

I wouldn't sell your house as property is your biggest asset. If possible look at remortgaging and releasing some equity to pay off your debts. As others have said, do you really need your car? If you do need a car, could you not sell the one you have and get a cheaper one that is cheaper to run, insure and tax? Is your DMP with a private company? If sohow much of yiur £80 goes on debt and how much on fees? I always find it helpful to do a spreadsheet with the exact amount that comes into the house and all that goes out. Start with priorities such as mortgage, council tax and utilities and work your way down. Do you have satellite tv? Do you need it. We hardly have the time to watch tv so freeview is enough for us. Look at your mobile phone contract. If you are paying a large amount for the very best handset then consider "down grading" people won't think any less of you if you don't have an Iphone! Try shopping in Aldi or Lidl if they are close by. Good luck. Wish you all the best with your dilemma

GreenQueen

Difference between £580 mortgage and £500 rent is not that big. Assume your mortgage is fixed. Your rent could go up quite quickly, and you could soon find yourself paying out more per month and not even having the equity of your house.

I would only sell the house as a very last resort.

Good luck, hope you find a satisfactory way forward.
GQ

Choupy

I would try to hang on to the house if at all possible. It is an asset, that is already growing, while your car is just losing value. Your car sounds very expensive to me - if you could manage with a cheaper one, I would sell that first. Renting will not really work out much cheaper, and you won't have an asset. Good luck to you.

rinabean

Interest rates are going up so mortgages will go up, if your landlord has a mortgage he's just going to up your rent anyway, if he doesn't he'll just match the ones who do. Unless you can get a council house you have nothing. That £500 could be £580 in a year or two easily. Get a cheaper car and look for part time work. Clear a room for immediate money and get a lodger to help in the medium term. You need to get your debts down.

[Deleted User]

Please talk to your local CAB for financial advice. They are used to situations like this, and can offer free and impartial help. They can help you perform a full audit of your income and expenditure, and offer advice on how to move forward.

commandomum

Absolutely not. You haven't factored in estate agents and solicitors fees in your costs. This may see any gain that you have out of your £20,000 reduce quite considerably. Are you able to take a payment holiday from your mortgage or extend the term? This would give you some respite and enable you to reduce down some of your other debt.

Other posters have suggested, renting out a room, shopping at Aldi, maybe rethinking your use of a car, do you really need a car? Your house will always be your biggest asset and if you sell your house how will you get on the property ladder again.

Your DMP should be renegotiated as you obviously don't have enough money to live on. I was always under the impression that these plans were calculated on the available income that you had after your living expenses had been deducted.

Good luck

Lynne:)

Teacher2

If you sell your house you could find yourself in a similar position to the one in which you find yourself now: indebted and unable to buy food and fuel, but without a secure roof over your head. Renting is an unstable, precarious and expensive business while at least with a mortgage you have shelter and an appreciating asset.

Put all your efforts into weathering this storm. The above posts give sound advice about increasing your incomings temporarily (renting out a room, and weekend or evening work,) and also cutting back and economising, (giving up luxuries and living frugally.)

Could you also pool resources with your partner and make a plan for you to work together to solve the financial problems?

Renegotiating the mortgage by extending the payback period or fixing/reducing the rate sounds like a good idea if your lender will allow you to.

Good luck. I hope in a year's time you will be in a better place.

patanne

I suggest that you go & look at the debt free wanabees. Have a read & then post a statement of affairs for them to look at and see what they have to say.

ETA I would try anything possible before giving up your home for what may be very small savings that may not cover all your debts and leave you in a much worse situation. Some very good advice already!