Should I sell my house to become debt free??

TheAble

I would suggest caution here. Once you have paid estate agent fees (typically 1-2% of the total sale price), solicitors fees, moving house fees and so on you could see your equity whittled down quite quickly. If you sell the house for £100K for instance, you've lost £2K already in estate agents fees. Another £500 to your solicitor, another grand down the pan in moving and you've got £16,500. Pay off your debts, you've got £1,500 left. Deposit for rented house, that's another £500 gone. And so on

And the part where you need to be most careful is that the sense of relief you get from clearing your debts can tempt you into spending again. If your current income is lower than your outgoings, you'll get into debt again.

£15K isn't that much of a debt in the general scheme of things, I would try and trim your outgoings in the first instance.

ksh123

I wonder if you have see my first post (post # 15) on this subject and if you have any comments?
thanks

TheAble

Hi ksh123

I've just had a read. In your case, yes I would suggest selling your house is the best option, because your income options are very slight, and in selling you could get help from the state. The OP's other half already earns £17K though, so the situation there is a little different.

in_debt_again_but_dealing_with_it

Hi Melfi
In May 2000 with just £7,000 ish worth of debt (felt huge then??) we sold our house for £43,500 to pay of our debts and rent until we saved enough to buy again (market static for many years) ..... in July 2000 (renting off my cousin) my dh had a massive heart attack followed by emergency angioplasty and stent - unable to continue working in his trade! House market started to rise during August 2000 and by November our house would have sold for £70,000!!! We never got back on the ladder and at 45 and 42 with a joint income of only £15,000 are never likely too so the moral of this story has to be if you can keep your house keep it!

jessie-jane

Hi ksh123, the 80% was the the estate agents valuation and also based on what property had sold for in the same area recently, the buyer paid for the valuation report but we knew what the property was worth anyway , what we came away with was around the same as if we had got full price but then had the hassel of all the fees and moving costs so we deceided to sell and stay in the house we have been happy in .

ksh123

that sounds like a good deal!

moanymoany

Hi melfi,
Have you thought about renting a room under the government scheme? You can earn over £4,000 tax free. You can advertise it for a short rental period to see if it works for you. We had a disaster for a first tenant and got rid of him in a month. The second is working out OK.

Have you looked at the Old Style board for money saving ideas on running your home and feeding your family? There are ideas on there for feeding a family of four for about £100 a month. Start a thread asking for advice and you will find it flow in. The people are kind and generous, you will find it a lovely experience. From their advice I have got my housekeeping bill - including petrol, down to about £175 - £200 a month for 2 of us.

If you can reduce your spending by £200 a month it will give you an extra £2,400 to pay off your debts each year. It needs you to be ruthless with spending, but you would end up with your home and no debts. That would mean you are worth the equity in your house and you can go on and pay the money you are saving, that was going on your debts onto your mortgage. How many years would it be then before you are mortgage free as well.

Great oaks from little acorns grow. You have to start somewhere - why not here?

ksh123

moanymoany wrote: »

Have you thought about renting a room under the government scheme? You can earn over £4,000 tax free. You can advertise it for a short rental period to see if it works for you. We had a disaster for a first tenant and got rid of him in a month. The second is working out OK.

Have you looked at the Old Style board for money saving ideas on running your home and feeding your family? There are ideas on there for feeding a family of four for about £100 a month. Start a thread asking for advice and you will find it flow in. The people are kind and generous, you will find it a lovely experience. From their advice I have got my housekeeping bill - including petrol, down to about £175 - £200 a month for 2 of us.

If you can reduce your spending by £200 a month it will give you an extra £2,400 to pay off your debts each year. It needs you to be ruthless with spending, but you would end up with your home and no debts. That would mean you are worth the equity in your house and you can go on and pay the money you are saving, that was going on your debts onto your mortgage. How many years would it be then before you are mortgage free as well.

Great oaks from little acorns grow. You have to start somewhere - why not here?

Hi - not sure if your comment was meant for me but I'm replying anyhow! First off I don't have a spare room - tho I have had lodgers in the past when I had more space and even moved in to my daughter's room for a while so we could have another lodger. But she was a child then, she's 22 now, so its far from appropriate. We both need out space in a house which is tiny anyway
(2 up, 2down).

I have been on the Old Style board many times and had lots of help and advice in the past which I have used to reduce my outgoings. I even bought the book to show my support! And you're right they are lovely, helpful people.The reason I'm so frustrated and sad now is that there is really nowhere else to prune and still things don't get any better.
I try hard not to sound self pitying and pathetic because I know there are many people worse off than me and I remember to count my blessings as often as I can. I just wish there was something to look forward to rather than this constant grind of penny pinching and worry. It stretches ahead of me interminably.

moanymoany

Ideas for melfi


No ksh123, the post was meant for melfi, sorry for the mix up, I should have put the name at the beginning of the post.

Hi ksh123, the options for money saving possibilities I gave were general as you haven't posted an soa, or given many details.

We were once in a position where we had £8000 debts and we decided to pay it as quickly as we could. We paid all our money off the debt which was a credit card, at the beginning of every month when we were paidand after dd's for insurances etc. and we only used the car once a week, or to get to work if it was raining. We left ourselves about £100 to cover everything else. When it was gone it was gone, though we tried our best to have a little money at the beginning of the last week!

For several months our diet consisted of all value, bread (the brown as we didn't like the white), marge, jam and marmelade, cereals, milk, onions, carrots, spaghetti, potatoes (they still did the big bags in Tescos then), eggs and baked beans.

Our meals were mainly 1 egg omelet betweeen 2, hm oven chips and baked beans, another was spaghetti with tomato sauce (tomatoes, onion, carrots value stock cube), potato bake (potatoes sliced and layered with sliced onions and carrots with milk poured over and baked, baked beans on toast every other night. Breakfasts were value fruit and fibre, oats for porridge, and lunches were jam sandwiches - or marmelade! It got monotonous and I did what I could to vary things, especially the potatoes. However, we saved a lot of money and achieved our target before time. Suddenly it didn't seem to have been so bad! I remember my grandma telling me that when she was young she lived on bread potaotes and cabbage - with the occasional rabbit. She fed her own young family the same - she lived to be 83, so I took the view that a spartan diet would do us no harm.

I'm not suggesting that this is all you need to do to solve your problem. As I said, I don't know your financial situation, I can only think what I would do. I remember when we were saving up for our first house, we were young then and hardship was more accepted and expected in the 60's and 70's and it made it much easier when all our friends were doing the same. After the struggle to get a house I would hate to have to give it up. Living in rented would not be the same for me although I do realise that not everyone feels the same.

raq

£15k is a lot of debt but compared to a lot of people on here is probably small.

Anyway,if it was me ( we are 8500.00k in debt ) I WOULD KEEP THE HOUSE

No more said really

Good luck