Should I sell my house to become debt free??

Debt_Free_Chick

melfi wrote: »

My partner and I have about £15,000 debt between us. I am a SAHM hoping to get some part time work in the next months, my partner earn £17,000 and year.

We can't be sure without seeing an SOA but I would guess that your partner's income pretty much covers your normal bills and not much more than the minimum payments on your current debts. So you need more money and this can come from two places.

Firstly - yes, get a PT job asap. View this as "pay off the debt money". It can be really motivating to do a job that has a real goal - to get you debt free

Next, look at all your current bills - can you get the same thing cheaper? What about food - do you waste a lot? Where do you shop? Buy stuff that you could make at home cheaper?

If you post an SOA we can give you some specific pointers, but get on that job hunt now! Even cleaning or ironing will generate extra cash

trying-very-trying

Hi, Melfi:hello:. You've certainly come to the right place for advice and support, whatever decision you may decide to take.
You've certainly opened a can of worms with the question of selling your house. I can't comment on the pros or cons of that decision, but I can tell you, that there is usually an available alternative.
In my deepest days, when I felt a total failure because of the debt I was responsible for creating at least I could console myself with the fact, that at least, I was still providing a safe and secure roof over my childrens' heads.
I say this , but I don't know how easy it would be for you to rent elsewhere, it would not be easy for us to find somewhere at all, and it certainly wouldn't be lower rent than we currently pay on the mortgage.

Post up your statement of affairs and I'm sure that you'll find lots of people will give you good advice on how to cut back your budget, and whatever possible solutions may be available to you, to solve this problem.

Lavendyr

teacup wrote: »

No I do not have a crystal ball. I dont make that statement with certainty either, so apologies if anyone took it as the gospel.

Sorry, it's just when you say "house prices are always increasing" it sounds pretty certain. Thanks for the clarification!

teacup wrote: »

Personally If I was in the posters situation, I would do everything i could to keep my home economise etc etc.

It's just hard to know the poster's situation without an SoA, so I can't say what I would do in that situation.

teacup wrote: »

When you move the fees would come to a couple of thousand , so thats a couple of thousand down the pan ,(that could be paid of debt)These sellers packs are £500. pound depending on what sort of property you have , solicitors , searches etc etc as well as landlord deposits , removals etc etc. But I guess their are all different sides to it.

Very good point, if you can't afford to sell your home in the first place then the best first step would be to see how you can cut back in your daily life. So OP please post an SoA so that posters can help to make suggestions on how you can cut back.

ksh123

What a coincidence - just yesterday my daughter and I decided to sell our house in order to pay debts and plan to go in to rented.
I have been struggling with bad debt for nearly 3 years now. My daughter and I are both on benefits because of illness but I cannot get housing benefit because of the timing of when I took out my last mortgage.
Although my daughter hopes to be working in the not too distant future she is only 22, it will be her first job after being sick, and she is unlikely to be earning more than minimum wage.
I am 55. It is unlikely that I will return to work within the next 2-3 years. And it is certain that I will never be able to return my previous relatively high-paying profession because of my health. If I do work it will be minimum wage and hours.
I cannot re-mortgage or get an IVA because I do not have enough money coming in. Believe me when I say I have looked at this from every possible angle and taken advice on many occasions from this and other boards.

I have approx. £45k of bad debt. £42k on my mortgage and £22k on a second mortgage. My house is worth about £110k. Obviously if I sell there will be nothing or little left but the CAB have advised me repeatedly that I should sell on the grounds that I will then be homeless and the council will then pay me housing benefit so that I can rent a house. That would give me a little extra in my purse every month. I have been resisting this option for the last 2 years because of my illness and my need for security.

But I have reached a point where I am so sick of a life with little or no freedom from the daily worry. I am sick of scratching round for pennies every month and going to the supermarket with a calculator so I don't spend more than I have in my purse. I thank God everyday for my pc and my pets.
I'm sick to death of doing car boot sales for pennies and eBay is never going to earn me enough to help me out of the situation. I have no hope of paying these debts any other way because of my age and the fact that I can only pay my creditors measly sums of £1 a month each.
As a young woman my daughter feels the hardship even more. Her social life is a joke compared to others of her age and she deeply misses the freedom a little more cash would give.
Yesterday we decided that, maybe it would be better to sell the house in exchange for a bit of pleasure in the here and now. Nobody ever knows when that no. 99 bus is coming to knock you off your perch and I dread leaving the debts to her.

stargazer69

Well said ksh 123! I have to agree with you because I am in the process of selling my house also for similar reasons. I havent got the huge debts to pay off but since I split with my partner 5 years ago, I have struggled to bring up my daughter with one income coming in. Yes I get tax credits, child benefit and child maintenance (when it suits him lol) but I only just manage to hold my head above water. By the time all the bills are paid each month theres nothing left....no money to go out, no money to take save for holidays etc... cant even afford to take her on 1 single day trip to the zoo during the summer holidays....and certainly no money left over to save for her future. In fact I have the whopping amount of £4.29 in my purse till I get paid on Friday (whoopee). So, just like you ksh123...I fully understand...the scrimping around the supermarkets, the Ebay stuff...yep Ive been there, done that too and although I have my own home with a mortgage, I just dont see the point either when all I am doing is existing...not living my life....after all its only a roof over your head for gods sake. I decided to sell up, release the equity in my house and !!!!!! off travelling for 6 months with my daughter (life education) and when I come back, rent somewhere and have a nice little sum left in the bank. This way I will be able to put 10k away for my daughters future too, something I will never be able to give her if I stay in this situation. I am fully aware of the pros/cons of renting but at least this way the council would probably help with housing benefit because they certainly dont help you with a mortgage!!! We are so obsessed with property in this country, you cant switch the tv on without having a makeover or property search programme being on. Im sick to death of hearing about it...property property property....it drives me crazy!!!!
But as for the original posting, well you have to do what you think is right for you. Just remember, whatever you decide, nothing is certain or forever in this life and if selling your house is right for you now then do it, lifes too short! What Ive realised is that Ive wasted the last few years of my life due to lack of money and Im certainly not going to waste anymore....like you said, that bus could be heading anyones way too soon...life is for living!!!! And I cant wait to start doing a bit of that :j:j:j:j:j:j

ksh123

Thanks for your comments Stargazer. I did something very similar to you when my daughter was younger and somehow each time I managed to claw my way back on to the housing ladder when I wanted to. I appreciate it gets more difficult every day because of house prices, interest rates etc. But there will always be people out there lending and people selling their homes.

You are young enough to work again when you have a mind to and your daughter and you will be enriched and closer for your experiences.
I'm still not sure selling is right for me. I try and tell myself about other European countries where renting is the norm and no one cares if you own or not but I still feel sick at the thought of losing my house.

For me its a case of needs must when the devil drives!

Good luck in everything you do. xx

sewbocushions

Hi,
I'm in a similar postion I suppose. We'd been living on credit cards just to survive when I realised we had no more credit and had to face up to our debts which were now reaching about £80,000. So, about a year ago, after getting in touch with debtline we were guided towards contacting the CCCS, producing our SOA and we pay them a monthly amount which goes a very small way to paying off the credit cards and loans. We seriously considered selling our house (which I thought would be the only option) but the CCCS said we don't have to. I know it means our credit score is terrible but we don't want to take out loans etc anyway so it doesn't bother us. We love our house and I found the thought of renting quite unsettling. I've done that before and felt insecure as it was only a 6 month at a time contract, so the landlord could sell up and you'd have to move on which could be stressful if you have children going to school in that area. Also we weren't allowed to decorate or put up pictures or posters. So we are living on the bare minimum now and yes it does get you down sometimes when you can't afford to just splash out and take the kids somewhere special. But when you read other people's stories on the forum pages I feel lucky, as some survive on very little money. We've started fostering, that's very rewarding, it makes me realise just how fortunate MY children are compared with some. So, personally I wouldn't sell your house. Hang in there, things will get better. Good luck,
Bo

ElleWoods

Hi Melfi and welcome!
I’m in a similar situation to you so can sympathise, and like you have been pondering whether or not to sell my house for the last year or so. I earn around £1k more than your hubby, have about £1k less than you in bad debt (just under £14k) and have about £20k equity in my property. I receive child benefit and working tax credits to help with DS’s nursery fees but once the mortgage, nursery fees and bills have come out I have nothing left, despite budgeting as much as possible (I don’t get any child support – just don’t even mention the CSA to me, lol!). I posted an SOA on here in March and got some great advice which helped but I’m still struggling on a day to day basis. I already work full time and can’t get a second job in the evenings (unless it’s working from home in some way) because I would need a babysitter to look after DS but can’t afford to pay out anymore in childcare. I also have the added concern that my fixed rate mortgage is up for renewal in the new year and as interest rates have risen significantly in the last 2 years my repayments will also rise, to the point where I might not be able to afford them.

As I see it, the options open to me are as follows:
a/ Keep the house and keep struggling to keep my head above water for the foreseeable future.
b/ Keep the house and try to make a bit more money, but not sure how unless I work from home in the evenings once DS is in bed, although so far I haven’t found anything to fit that bill
c/ *Sell my house and try to downsize. There are cheaper properties available (houses and flats) but not only are they smaller, they are in much less desirable areas, so I would have to carefully weigh up the pros and cons of this. Plus of course, as someone else pointed out, it costs a lot to sell/move.
d/ *Sell my house and try and get a council property (renting privately would be about the same cost as my mortgage currently is, so that would be pointless). My concern here is that a lot of the council areas are a bit ‘dodgy’ (no offence meant to people living in council areas but trust me, I’ve lived in a few of them locally!) and not really the kind of places I would want to bring up a child. I also expect I’d only be able to get a tiny flat as I’m the only adult in the household, so don’t think I’d be eligible for a house. I’m also not sure if people who currently own properties can go on the council waiting list, as they are not classed as in great need of housing.
e/ Try and make more money, but not sure how unless I work from home in the evenings once DS is in bed, although so far I haven’t found anything to fit the bill.
f/ Bide my time until a meet a dark, handsome millionaire who will whisk me away from this life of drudgery!

*slight problem with selling my house, as it needs a bit of ‘house doctoring’ so I wouldn’t get the full market value of it without spending money on it – vicious circle!

Ideally I would like to still own a property, be it my current one or not, as I see it as my security for the future (and DS’s). Plus on my salary there is no way I’d be able to get back on the property ladder again without a huge rise in income or massive fall in house prices, neither of which I can see happening in the near future.

Any suggestions?

CC
x

jessie-jane

Hi, we were in a silimilar situation a while back and made another desicion, we sold our house for 80% of the market value and then rented it back from the person who bought the house for a fair rent.

This meant none of the neighbours knowing ,no changeing schools and no moving costs, also the landlord agreed to a three year fixed rent deal so al least we know we wont be moving on unless we want to.

At any time we wish we can buy the property back at 10% less than the market value.

This has worked well although OH hates the idea of not owing our property we were in a very sticky situation and this was a solution to our problem.
Nobody can say what will happen round the next corner ,i'll just keep doing the lottery.!

ksh123

jessie-jane wrote: »

Hi, we were in a silimilar situation a while back and made another desicion, we sold our house for 80% of the market value and then rented it back from the person who bought the house for a fair rent.

This meant none of the neighbours knowing ,no changeing schools and no moving costs, also the landlord agreed to a three year fixed rent deal so al least we know we wont be moving on unless we want to.

At any time we wish we can buy the property back at 10% less than the market value.

This has worked well although OH hates the idea of not owing our property we were in a very sticky situation and this was a solution to our problem.
Nobody can say what will happen round the next corner ,i'll just keep doing the lottery.!

Was that 80% of an estate agent'sa valuation or of the buyer's valuation. I only ask because i briefly worked for someone who bought houses and rented them back and his valuations were always more like 60% of what the house owner hoped for.

If I got 60% of what I believe my house is worth selling would be a pointless exercise because there would not be enough left to pay any debts once the 2 mortgages were settled.

But if it got you out of a hole that's all to the good