Selling up to pay off debts?

Nobbie1967

Are you sure the £130k repo could ever be worth £250k? What type of area are these in, what's the ceiling price in the area. There's no point in adding lots of space if you're not going to at least increase the property value by more than it's cost.

Your experience so far suggests managing a budget for a major extension and renovations could prove difficult as you may not account for all the expenses that will be incurred. You could end up in a worse house and still be struggling with debt due to unexpected extras during the build.

I think managing the debt you have now is the best solution.

Jagraf

we sold our house to pay off some debt 6 years ago. We have now cleared our debt but we are still renting as no one would touch us with a barge pole with debts (and we had excellent credit history report wise).

Gigervamp

I'm glad somebody else has mentioned ceiling price as that was one of the things I was thinking.

We had a poster on here a while back who had added extensions to their house and was having a problem selling. The general consensus was that they were asking way over the area's ceiling price. People didn't want to pay what they were asking, due to the area not being great.

But, the thing that sticks out to me, is that you are unable to budget properly and that's what needs to be tackled. You've got a load of debt. What's to say that if you pay it off with the equity, you won't go back to your previous spending patterns?

I'd also want to pay that friend back asap. 20 grand is a lot of money to borrow off a friend, no matter how wealthy they are.

Nobbie1967

Leanne8t3 wrote: »

Mortgage is at a low fixed rate for the next 20 months so we are surviving but we could be living a bit more.

This statement implies to me that you want to get rid of the debt so that you are free to spend more money again on "living a bit more' effectively frittering away the equity you've built up, rather than thinking what is best in the long term for your family.

Leanne8t3

Nobbie1967 wrote: »

This statement implies to me that you want to get rid of the debt so that you are free to spend more money again on "living a bit more' effectively frittering away the equity you've built up, rather than thinking what is best in the long term for your family.

Not wanting to fritt money away, more wanting to enjoy the children and make memories, travel etc while they're young. All we do is pay bills. We haven't been abroad with them yet, we don't go out loads and if we do were cautious and use tesco vouchers etc. where as I think we could clear our debts still be owning our own house and just enjoying life

Person_one

Leanne8t3 wrote: »

Not wanting to fritt money away, more wanting to enjoy the children and make memories, travel etc while they're young. All we do is pay bills. We haven't been abroad with them yet, we don't go out loads and if we do were cautious and use tesco vouchers etc. where as I think we could clear our debts still be owning our own house and just enjoying life

But...you'd be spending the equity you release and any other spare cash on your extension and renovating your repo property, you still wouldn't have the money for foreign holidays for years if you went ahead with your proposed solution.

Leanne8t3

Person_one wrote: »

But...you'd be spending the equity you release and any other spare cash on your extension and renovating your repo property, you still wouldn't have the money for foreign holidays for years if you went ahead with your proposed solution.

Surely we'd pay off our debts with half the equity, then a quarter goes on deposits fees and stamp duty etc and the rest would be to do up the house. Then we would be 1100 a month better off which part could be used for enjoying life and part to save. With 1100 a month more than we have now we could go on holiday once a year without getting ourselves into debt.

Red_Spider

OP - by my quite calculation, you have about £70k (equity - debts) at the moment.

You will be very lucky if your house valuation has actually gone up as much as the estate agent says it has.

I wouldn't start messing around trying to renovate a repossessed house. This kind of thing is best left to experienced builders / developers.

But downsizing to a cheaper house, that's ready to live in could be a sensible option.

I would look for a habitable 3 bedroom house for about £140k. Then you'll only have about £70k (mortgage) debt. And about £70k equity.

Of course your kids can share bedrooms until they leave home. Most people do.

Keep it simple.

Leanne8t3

Gigervamp wrote: »

I'm glad somebody else has mentioned ceiling price as that was one of the things I was thinking.

We had a poster on here a while back who had added extensions to their house and was having a problem selling. The general consensus was that they were asking way over the area's ceiling price. People didn't want to pay what they were asking, due to the area not being great.

But, the thing that sticks out to me, is that you are unable to budget properly and that's what needs to be tackled. You've got a load of debt. What's to say that if you pay it off with the equity, you won't go back to your previous spending patterns?

I'd also want to pay that friend back asap. 20 grand is a lot of money to borrow off a friend, no matter how wealthy they are.

I want to pay off all debts.
I'm not sure the ceiling price exists that much here in rural Norfolk as all the houses are different and set apart from say, 20 or 30 houses in 1 street. All the houses in our close are different so it's hard to judge, most are bungalows, there are 4 chalet houses - ours is the biggest - then a couple of dorma bungalows.
I will take it into consideration though

Person_one

Leanne8t3 wrote: »

Surely we'd pay off our debts with half the equity, then a quarter goes on deposits fees and stamp duty etc and the rest would be to do up the house. Then we would be 1100 a month better off which part could be used for enjoying life and part to save. With 1100 a month more than we have now we could go on holiday once a year without getting ourselves into debt.

You've also said that you want to save up enough in 2 years for a 2 storey extension!