Do I sell my home to pay off some debt?

desperate_times

Aren't the buy to let companies to be avoid at all costs? I heard they just buy at a low price, give you a reasonable rent for 12 months then jack it up and generally try to kick you out so they can sell and make a quick capital gain.

meknowalot-51

What you need to do is speak to your mortgage lender and get your repayment terms extended by about 7 or 8 years,this will bring your monthly payments down.Dump all the junk in your house,people do it every sunday,it's called a car boot sale.Cars and rent are dead money,whatever you do make sure you hang on to your house.As you've already said,there's no money for petrol so send it back or sell it.Start by prioritising your debts,House,Utility Bills,Food.If you both fail then i doubt if you will ever be able to own a property again.Your both earning.....how the hell have you allowed things to get so grim?Clearly you've been spending more than your joint incomes can cover,perhaps evening classes on basic maths would be a start.Regard all of this as a major wake up call.See this as a challenge,you both need a positive attitude and taking the easy way out is a decision you could regret for a very long time.

desperate_times

Rent is no more dead money than the interest on a mortgage. Depending on the house and area the rent may be less than the interest element of mortgage and loss interest on the equity tied up. In our case rent will be less than the interest cost of owning the house. We also don't have maintenance expenses. Perhaps we will lose out on capital appreciation but maybe we will avoid a capital loss.

CompanionCube

Have you heard of the website Turn2us? They have a full directory of grants, benevolent funds etc - so there might be something for your profession or trade, or if you have a family background in the armed forces for example. Could be worth a look, just in case!

getmore4less

This should have moved to debtfreewanabee.

That way the OP could have got some decent advice based on a comprehensive SOA.

Putting this in the email has just got a load of one post wonders that are saying things without all the facts, and some clearly did not read the first post properly.

the issue will be " a loan in my mums name (£11,000)"

That can't be included in the DMP and I suspect the amount being paid should not be included in the DMP budget as there is no liability for that loan.

One solution will be stop paying this loan you have no liability for and feed yourself giving mum what's left but without the SOA even that is a guess.

Churchette

:A
I wouldn't do this if you can find another way. You will find it very hard to get back onto the housing ladder once you jump off it. It always costs more to sell than you expect, and you could easily end up paying more in rent, and frustrated by not being in control of your surroundings (somebody else's dirty carpets, landlord may not repair things etc). Hard as it is to pay the mortgage now, one day it will come to an end, you will pay rent for ever.
Consider all other options first. Got to the citizens advice bureau. Speak to an independent financial adviser. Take in a lodger (I tried it this year, very dubious, it worked well). If you need your privacy, try looking for a five days a week lodger. Look at all of your outgoings, every single direct debit. Could you take on a second job for a short period of time? Tough as it is now, things tend to get better if you make a positive plan. I would only sell as a last resort. Good luck.

[Deleted User]

Just wanted to add - the OP sounds like a couple of friends of ours. They sold their flat in London 12 years ago and used the appreciation in value to pay off their debts, buy a new car and take a holiday in New York. For a while they were really happy - they said they felt as though a huge weight had been lifted off them. however, 12 years later, they're still in a rented flat, are paying almost 3x what we are in mortgage and have managed to get themselves back in debt, and know they will never be able to buy their own home. They bitterly regret taking what seemed like the easy way out at the time.

eagle_eye

I can't advise on the DMP - fortunately! But I would try to keep my house until I've explored every feasible option.

Speak to the CAB as the advice is free and it won't hurt getting another opinion. Speak to your mortgage lender and ask them if they could extend the loan or whether you could re-mortgage the property (however there may be solicitors' costs for this one)

Set up a spreadsheet of all incomings and outgoings and determine the deficit and what disposable income you might have if you made changes.

I would stop buying all papers and magazines and use the local library. Cancel any subscriptions. Try to reduce your electricity bill as much as possible. Turn things off at night and do not use heating/air con etc - just put/take clothes on/off.

Try to use the washing machine as little as possible. Do not use a tumble drier. Get the most economical powder etc. Wash dishes by hand. If you have an oven cook as many things as possible at once.

If you have a mobile phone get on the cheapest mobile contract possible if not keep a record so you don't go over your allowance until your contract runs out. If you have PAYG then request friends to call you where possible.

Do not eat out or get takeaways in - this is a relatively expensive entertainment option. Invite friends round who understand your situation and swap cooking duties with them.

Are there items you don't use - perhaps you could sell them or swap them for something more useful?

Get a 2nd/part time job.If you can't do this then I would certainly look at getting rid of the car unless you use it for your existing job (you will need to check this with the Finance company though). As others have said I would get rid of the car and get a cheaper car if having one is essential. Could you share petrol costs with a fellow worker, cycle in or use a combination of publc transport / cycle / walking?

Get/use a bike for all trips up to 3 miles. If necessary use Freegle to get an old one and if possible a trailer as well for the shopping.

Use Aldi/LIDL, make the most of yellow labels at other supermarkets and cook in bulk. You will need a freezer for this but you can get them on Freegle if you don't have one. Grow your own veg if you have a garden. Or get some spare seeds/ compost on Freegle and set up a window box.

Record all your food spends and see if you can get it down each month. Don't buy beer/wine - make it yourself if you want/need a drink.

It sounds like the situation is serious so I would ditch any TV packages all together and use Freeview. You do need a life but unless you can get a cracking deal then for me (you may think differently) these funds are better used elsewhere.

Good luck.

mcculloch29

We bought a house 26 years ago and watched the repayments soar in months. My ex took a second evening job for a while and I worked from home as a registered childminder as we couldn't afford childcare. We cut back on everything.
Re-negotiate the DMP, explore every avenue for increasing income but don't sell unless you are resigned to never ever owning your own home again and paying out far more in rent over your lives than you ever would in a mortgage.

These days, I'm disabled and work from home in a different job on a limited income, I've been divorced for 21 years, many as a single parent.
I've managed to avoid selling and keeping the home going over the years by living a frugal life and looking for other ways to get luxuries, I got many by winning slogan competitions and these days Am*zon offer me goodies in return for reviews. I bless Aldi and don't need to run a car, I use a three wheeler bike and public transport to get around.

I remortgaged the house a few years ago after it became clear that the endowment was not going to meet the sum owing after 25 years. The endowment was cashed in some 13 years ago to fund a year's retraining when I realised I would need another career outside childcare, with disability looming. It paid off.

I managed to overpay the mortgage prior to remortgaging to bring new repayments down to roughly a third of what my rent would be in the private sector . If I ever do move, the equity will pay for a small, mortgage - free space. I still have one of my now adult children with me and he pays rent to cover his expenses - it's actually far less than a normal house-share would be for him, so he wins too.

I thank God I never sold out. I will want to move eventually but that time isn't just yet.

pk04

I can't comment on whether you should sell or not, there are good arguments for both options. I do think however that you should write a brutally honest list of outgoings to sort through (or take it to somewhere like citizens advice if you're not confident doing it yourself). This needs to include every little thing that you spend money on, whether it costs £1 or £50, it all adds up

I did this last year before moving (I rent) to a better but more expensive area. One of my most wasteful outgoings was buying lunch and it was a real eye opener, £3 a day (for one person) is nothing really, £15 a week is a bit much but when you start looking it as a month (£65) or year (£780) it is quite shocking.

Good luck with whatever you decide to do