Is this the best way?

Hunter1

Hi
I have around £18500 of credit card & overdraft debt broken down as follows:
£2500 overdraft &
£16000 on 3 credit cards
We have a one year old & we are planning on having a second child sooner rather than later. We live in a 2 bed terrace & want to move to a 3 bed semi or similar with more space & in a better catchment area for schools etc..


I earn around £35000 & my partner £22000 (both full time). With no childcare costs as we have family close by who are great & help out a lot.


I imagine that the best way is for me to sell my house which should give me around £30000. I could then pay all of my debts & have between £8000 - £10000 for a deposit on a property. We could then use this and get a 5% mortgage on the help to buy scheme? We would be looking at a purchase price of around £170000.


Would we be considered a good risk having cleared my debts with the sale?


I cant see that anyone would lend me the money without selling my house first & paying off the debts?


Any advice is appreciated. Many thanks in advance.

stator

If you are planning on moving straight from one house to the other, the outstanding debts would count against you since they don't actually know if you are going to pay them off or not. So with all those debts the question is whether the bank would think you are a good risk and you can afford the new mortgage?

Thrugelmir

Hunter1 wrote: »

Would we be considered a good risk having cleared my debts with the sale?

What's changed? From a lenders perspective you are living beyond your means. Simply using the existing equity to settle your debts then borrowing more on the mortgage isn't addressing the reasons behind your debts. Nor the fact that in the future you'll run up further debts again. Statistically you will re-offend. However if you tackle the issues yourselves the chances are that you will learn valuable lessons and improve your budgeting abilities.