Do I sell my home to pay off some debt?

hogger84

As a note on rental. Do your research well? We bought our house at the bottom of the market in 2010, our mortage payemnts were £580 per month (of which about £60 per month is esentially a saving for future). We recently moved for work (tempoary 2years) so rent our property out for £825 so unless you are significantly downsizing renting is as expensive.

The rental marked is a landlords market at the moment, while looking for a rental place in our new location we had to fight for "crap" properties because evreyone is looking for cheapest rents and the good ones are out of many price range. (London in a 1bed flat paying more in rent than our 3bed in swindon)

NRTurner

As others have mentioned, you should definitely speak to the Citizens Advice Bureau, or a financial advisor, before making such a big decision. Whilst there is some good advice here, I wouldn't follow suggestions from 'random internet people' (sorry forumites!) when your house is at stake. There are lots of things to factor in and even if your rent would be lower, you're only saving around £20 a week.

taliesinboo

Do you have a spare bedroom? If so you could consider taking in a lodger. The government allows you to earn £4000ish per year tax free when renting out a room in your own home. It's not for everyone but may allow you to keep your own home.

tgroom57

Short answer: No! You don't sell your house to pay off debt.

If you sell your house you will never own a house again - it will be impossible for you to get another mortgage (if you wanted one). The rules on mortgages have tightened up very recently, and you admit you are already struggling with money. That means even now, you wouldn't get the mortgage offer you used to buy the place you're in. If things get any worse by way of your credit file, you will be doomed to rent forevermore. You don't just 'try renting for a bit', it's a permanent and irrevocable change.

btw, each time you move it costs at least £1,000 - and you rarely get to keep all your furniture, belongings.

Right now, you can try one frugal month- no wine, magazines, gym, etc. - just for one month not forever. I've found I can get by with £15 a week for grocery, per person. See what you can live without.
I agree with the above regarding the £7,000 car- next to your house the car is your most expensive asset. Use that first.

Good luck!

Former_MSE_Andrea

Don't forget to use our Budget Planner and do yourself a full Money Makeover.

Hopefully they should help

onesixfive

You need to tackle the source of your debts.

• By selling the house its just a temporary fix.
• Who is to say you wont run up the debts again?
• You will pay off the car - you will eventually need to replace it.
• You may temporarily reduce your living costs by £80 a month by renting - who is to say the landlord wont increase rent as soon as you move in - so you move again... (all extra cost...).
• you appear to be in a new home, so maintenance costs will be low unlike an older house.

You are both working.
List & Compare - Write down all outgoings, & all incomings.
The way I read your email is that currently you pay £580 on mortgage + £445 on debt (plus, Ctax, phone, fuel, utilities etc ? - say - £400 month?). Is that right ? or have I missed a massive debt?
Basic supermarket shop for everything for 2 for the month could cost no more than £200.
That equates to take home pay of about £800 month each (that's about minimum wage - 40 hrs pw @ £6.31) - You don't say what you earn?

• Could either/both of you take part-time/evening jobs until short term loan/debts are paid off ?
• Contact Sky & bargain reductions - or get a decent aerial & change to freeview.
• Compare utilities/mobile packages & switch.
• Cancel non-essentials
• Can you switch mortgage to lower rate/longer term ? seek free financial adviser ?
• Any pensions/policies you can cash in instead ?
• Can Taylor Wimpey offer you a swap / downsize property?

No disrespect - but if one of you lost your job - you have to manage on a lot less - believe me - I have done this exercise.

onesixfive

MSE_Andrea wrote: »

Don't forget to use our Budget Planner and do yourself a full Money Makeover.

Hopefully they should help

♥ these are the best links anyone with debt could wish for ♥

ButterflyLC

When we first moved into our house, we were the same and it took about 18 months of having no money and it was a never ending cycle. We sold things that we didn't need on Gumtree and eBay. We started shopping at Aldi also, which really cut our food bill down. I do a full shop in Aldi for the same price as a top up shop in Asda or Tesco. We also made great use of a chest freezer we got as a housewarming present from my parents, buying meat from the butcher auction lorries at markets and freezing it for when I need it. We stopped wasting food and took leftovers for lunch. We cut down on the things we didn't need like gym memberships and Sky TV when we could go a run and watch Freeview instead. We had to limit ourselves to one takeaway/restaurant meal/cinema date every 2 months. I actually started reading Martin's email every week religiously and missed nothing out and it really helped me to pick up tips. If I couldn't haggle I tried saving in other ways, e.g paying council tax over 12 months and not 10, switching credit card debt etc. You haven't mentioned what avenues you have looked at, but I suggest you try again looking at ways to cut costs from each area. Are you paying for something you don't need/use? Do you have something you don't need/use and could sell? Do you have a talent that you can teach people for money? I wouldn't sell the house if I were you. I would cut back on the things you don't need as a lot of the time this can be temporary until you get back on track.

ButterflyLC

sng165 wrote: »

You need to tackle the source of your debts.

• By selling the house its just a temporary fix.
• Who is to say you wont run up the debts again?
• You will pay off the car - you will eventually need to replace it.
• You may temporarily reduce your living costs by £80 a month by renting - who is to say the landlord wont increase rent as soon as you move in - so you move again... (all extra cost...).
• you appear to be in a new home, so maintenance costs will be low unlike an older house.

You are both working.
List & Compare - Write down all outgoings, & all incomings.
The way I read your email is that currently you pay £580 on mortgage + £445 on debt (plus, Ctax, phone, fuel, utilities etc ? - say - £400 month?). Is that right ? or have I missed a massive debt?
Basic supermarket shop for everything for 2 for the month could cost no more than £200.
That equates to take home pay of about £800 month each (that's about minimum wage - 40 hrs pw @ £6.31) - You don't say what you earn?

• Could either/both of you take part-time/evening jobs until short term loan/debts are paid off ?
• Contact Sky & bargain reductions - or get a decent aerial & change to freeview.
• Compare utilities/mobile packages & switch.
• Cancel non-essentials
• Can you switch mortgage to lower rate/longer term ? seek free financial adviser ?
• Any pensions/policies you can cash in instead ?
• Can Taylor Wimpey offer you a swap / downsize property?

No disrespect - but if one of you lost your job - you have to manage on a lot less - believe me - I have done this exercise.

100% correct - I struggled with credit card debt. I have a similar mortgage payment and I was paying the same if not more out on credit card debt. Then we looked at a debt consolidation loan from the bank. Yes we pay over a longer period of time, but I pay a quarter of what I was paying out, and when we can we will pay it off early. This worked for me, I'm not saying it will for you. But getting your payments into one lump sum a month does work and reduces your payments. This could save you a lot more. Don't sell your house as a rash decision, you will regret that later.

[Deleted User]

When we bought our first house it was a terrible struggle to pay the mortgage and we often wondered if we'd done the right thing in buying it. For over 2 years we, basically, didn't have a life beyond going to work and staying in. We certainly had no holidays. We didn't run a car - got to work by bicycle or on the bus, and ate mainly veggie meals (veggie curries, veggie chillis, home made soups, lots of things with eggs, etc.) I wore the same pair of black trousers (washed at weekends) for work for a year! Our birthday celebrations consisted of a takeaway and renting a video (yes it was THAT long ago) that's how broke we were. But - we got through it, and we're now in a bigger house (with a rapidly shrinking mortgage), and it was worth every boring night in, every meal of beans on toast and every sacrifice. Get someone independent to look at your spending and set a new budget, and then cut, cut, cut. Sacrifice everything you can but DON'T sell your house. If you choose to sell your house, I suspect you'll live to regret it.