Selling up to pay off debts?

Person_one

I think you're seeing the idea of selling up as a magic fix to rid you of this expensive debt, but the chances that it won't be.

First of all, that level of credit card debt will severely reduce what you can borrow on a new mortgage, plus you may well have early repayment fees to pay as you're still in your fixed term, plus all the usual costs of buying and selling like estate agent and legal fees, stamp duty etc.

Secondly, 2 adults and 4 children in a 3 bed house, especially one that's in a state due to having work done, will be really tough on the whole family. Sticking a cheap single storey extension on the back that contains a couple of bedrooms will not add a lot of value. People don't want that kind of layout! 25K won't get you very far anyway, and you may well find that you end up running up debt again to get your repo house up to a standard you can live in, repos are bought 'sold as seen' and you never know what issues might crop up in the first few years of owning one.

If you can get your debts onto 0% as much as possible, or even some of the long low rate deals that are around at the moment (4-6% for life of the balance etc.) then you'd be better staying where you are, budgeting really carefully, and cracking on with paying it down while living in a comfortable home.

Have the DFW folks asked you to fill out an 'SOA'?

Carer

I have the opposite opinion to most on here. I don't really understand the need for everyone to have their own bedroom.
I, and many other families I knew, grew up in a 3 bed house with more than 4 people living in it. In my case we had 5 children in 2 bedrooms. It didn't do us any harm, in fact I think it made us closer as siblings as we had a lot of fun when the lights were out It also taught us to share and to be respectful of each other's space and possessions.

I think quality of family life is so much more important that a bit of extra space and so if you can bring down your outgoings to have a better life then I'd suggest you do it. Your children don't "need" a bedroom each, but they do need family time and a fun childhood.

In your position I'd sell up and buy a cheaper house, forget the extension and just put a conservatory on the back and maybe a chalet in the garden for the kids to have some space. They don't really need bedroom space, just living space.

sheramber

How much have you allowed for fees for
1 selling and buying or are you forgetting about them again.
2 preparation of plans for an extension and planning fees

Do these also come out of the £25k?

marksoton

Leanne8t3 wrote: »

the 22k worth of debts is from costs we didn't take into account when we bought the house, mortgage fees, surveys, solicitors, that kind of thing. Which was about 5k then as we were on a higher rate our mortgage was 300 more. Which we did struggle with.

No offence but that's some oversight.What's to stop it happening again?

As others have pointed out selling might not be possible if you have punitive redemption fees on the mortgage and it's not potable.

Leanne8t3

Carer wrote: »

I have the opposite opinion to most on here. I don't really understand the need for everyone to have their own bedroom.
I, and many other families I knew, grew up in a 3 bed house with more than 4 people living in it. In my case we had 5 children in 2 bedrooms. It didn't do us any harm, in fact I think it made us closer as siblings as we had a lot of fun when the lights were out It also taught us to share and to be respectful of each other's space and possessions.

I think quality of family life is so much more important that a bit of extra space and so if you can bring down your outgoings to have a better life then I'd suggest you do it. Your children don't "need" a bedroom each, but they do need family time and a fun childhood.

In your position I'd sell up and buy a cheaper house, forget the extension and just put a conservatory on the back and maybe a chalet in the garden for the kids to have some space. They don't really need bedroom space, just living space.

My thoughts also. We are in a 5 bed now with 1 bedroom downstairs that is used only as a spare room, so we don't really need this room, it is a luxury at the moment. We have 4 girls, 3 year old has a box room, 5&8 year olds share in bunk beds and 10 year old has her own room. A lot of the time there are 3 or 4 in 1 room as they have sleepovers with each other and movie nights. So we could easily cope with 2 per room.

Leanne8t3

marksoton wrote: »

No offence but that's some oversight.What's to stop it happening again?

As others have pointed out selling might not be possible if you have punitive redemption fees on the mortgage and it's not potable.

I think now we are on top of things and we have learnt our lesson so to speak. I will closely manage our spending from now on. For the last year we've really had to budget hard and struggle through, now that we've reduced our outgoing a by £500 a month life should be a bit easier

Person_one

Leanne8t3 wrote: »

My thoughts also. We are in a 5 bed now with 1 bedroom downstairs that is used only as a spare room, so we don't really need this room, it is a luxury at the moment. We have 4 girls, 3 year old has a box room, 5&8 year olds share in bunk beds and 10 year old has her own room. A lot of the time there are 3 or 4 in 1 room as they have sleepovers with each other and movie nights. So we could easily cope with 2 per room.

Not too bad now, but what about when they are 11, 13, 16 and 18?

I agree that sharing isn't the end of the world, but at the moment you are in a house where they can have their own space and privacy, and you don't need to give that up.

Leanne8t3

sheramber wrote: »

How much have you allowed for fees for
1 selling and buying or are you forgetting about them again.
2 preparation of plans for an extension and planning fees

Do these also come out of the £25k?

Yes these would come out of the 25k as on 130k we would need 26k for a 20% deposit or 19.5k and 6.5k for fees. Stamp duty would be fairly low on a 130k house also.
And yes I understand about the extension and in future we may have to borrow to fund it, but we'd be 1100 a month better off after debts paid and lower mortgage so even if we saved and got 10k savings in a year, after 2 years we would have 20k to extend further and then whatever was left from the difference of our house and the new house. My eyes are wide open now

Leanne8t3

Person_one wrote: »

Not too bad now, but what about when they are 11, 13, 16 and 18?

I agree that sharing isn't the end of the world, but at the moment you are in a house where they can have their own space and privacy, and you don't need to give that up.

By that point we would have saved enough to add a decent sized extension hopefully. I'm thinking for the next 2 years or so we could cope in a 3 bed until we have the funds saved / I can start work again and we can extend to make it a 4/5 bed again. We would buy a 3 bed with definite scope to extend, no rushing in etc.

Person_one

Leanne8t3 wrote: »

By that point we would have saved enough to add a decent sized extension hopefully. I'm thinking for the next 2 years or so we could cope in a 3 bed until we have the funds saved / I can start work again and we can extend to make it a 4/5 bed again. We would buy a 3 bed with definite scope to extend, no rushing in etc.

How much can you realistically save in 2-3 years? Realistically being the key word here. I hate to be harsh but you've not managed your spending/budget fantastically well so far, and solutions that never actually happen aren't genuine solutions.

At the moment, you have a home where you all fit comfortably. Leaving that behind for uncertainty and stress would be an absolute last resort if I were you.