Selling to clear debt . Is this wise ?

rsbk

I currently own a house that I am unable to live in due to its location. I work on the mainland and the house is on the island. I have no plans to ever return to the island but cannot afford to buy at mainland prices. This is mainly due to the debt I have, not a massive amount but enough to scare off any lenders.
I am now considering selling to pay off the debt which will leave me with around 46k and sit on it whilst I save hard for the next year to rebuild the deposit to a decent amount. Am I wise to do this ? At 40 would I be able to get back on the ladder in a years time ?
I will be living rent free for a year.
I have considered renting the property out but this will not solve the debt issue and ultimately I would have to return to the Island and live in a house that makes working pointless considering the cost of commuting daily.
The next issue is would the mortgage company really sting me for fees ending the mortgage early, I am still locked into a fix rate.
So confused :-/
Any views on this would be gratefully received

Caz3121

rsbk wrote: »

The next issue is would the mortgage company really sting me for fees ending the mortgage early, I am still locked into a fix rate.

the fees for paying the mortgage off early should be detailed in the mortgage agreement, when does your fixed period end?

rsbk

I have 2 years left

moneyistooshorttomention

I guess this is where your personal circumstances come into it too.

How old are you? (ie how near retirement and the question not arising of having to commute to work on the mainland).

When you say "the island" - do you mean a big enough place to be able to live on of itself (ie enough facilities, etc, apart from that missing job to do there)? Or is the island too small to have much of anything else you require either?

If its a big island and has enough facilities for you basically and you like living there (but just cant do so because of the need for a job elsewhere) then it boils down to "How much longer do you need a job for in order to get an income?". If you are quite some way from retirement then maybe do a Fresh Start. If retirement isnt forever away and you like the island then keep hold of the house for when you no longer need a job to provide that income.

Well...thats how I would think personally.

I am guessing you are fairly young though? and hence need to do a job still for some time?

rsbk

I am 40 , so have a good 30 years left of working. The isle of wight , small Island , no jobs , low house prices, pretty much a prison for many residents due to the high cost of ferry travel. I am self employed , I work as a courier and all my jobs are mainland based.

kinger101

The interest alone on the property is likely to be more than the early repayment fee on the mortgage, so on that basis, I'd sell now (but check the amounts involved first). Plus, you'll no longer be paying interest on any unsecured debt you have.

In terms of getting a mortgage in future, you can probably get one for a term that lasts up until your state retirement age.

CLAPTON

actual facts always help

rsbk

Early repayment fee of £4,200

moneyistooshorttomention

At your age then, I guess it does equal officially moving to the mainland then.:(

I'd never thought of it like that re those ferry fares making people virtual "prisoners" on the Island:(. Out of interest - how much are they?

EDIT; I just checked (well tried to.....but their website isnt very good and I couldnt make it work to give me just "island to mainland") - but, as far as I could make it work it came to £33 per week (assuming paying for a yearly pass) and £52 for a weekly one. Yikes!!!!! Thats expensive. I see what you mean.

fairy_lights

46k after selling the house is a pretty healthy lump sum. Wouldn't that be enough for a deposit for a home on the mainland?

rsbk

Being single with 16k of debt on 22k a year it's not enough to purchase a property in Southampton. Should I clear my debt and save hard for a year that should sort out my credit and add to what I lost on paying off the debt , theoretically speaking.
Daily travel for me and van ( my van is my livelihood ) it's £39 a day off peak , £51 peak , that's with discount. Summer time it doubles.
I am rightly worried stepping off the ladder but can't see any other way to do this.