Sell house to pay debt advice

Paulapips

Sunkencosts wrote: »

Which part of the south will you be moving to? (she asked nosily), it's so much more expensive generally in the South East that it might be difficult to buy again even with no debt.

If there's no option to switch to repayment and no vehicle to pay off the outstanding mortgage at the end of the term, then I think I'd be inclined to sell up and start again. You have a good income coming in and could probably get another house deposit together within a reasonably short time?

However, if you can switch to repayment, or are expecting an inheritance between now and the end of the term to help with that then I'd be inclined to hang on and do a DMP. Owning your own home is a real security.

(Note: feel free to ignore, as this is just an opinion from someone in a similar level of debt!)

Would be Cornwall, there's a new site opening and my husband wants to transfer there once my son has done his exams, he's 13 now so three years tops, we planned to rent there anyways to get a feel of where we would want to settle, I can transfer my work easily too so that's not a problem,
No inheritance on the cards, no money on the horizon, we always thought we would switch to repayment at some point, but life doesn't go that way and it just never happened, we couldn't afford it,
Hate myself for getting this situation, buried my head in the sand, out of sight out of mind, a lot of people wonders if this will happen again, the answer is no, once paid I'm cancelling and closing down all my credit cards, and not buying anything unless I've got the money for it xxx I won't ever ever be in this situation again,

enjoyyourshoes

It might be worth:-

researching cheaper contracts (life, house insurance etc)

Always pay car/house ins annually as monthly they get you

Diarise the renewal for contracts etc, then 1 month before research better deals or start the cancellation processes. USE MSE guide for better policies and allocate time to do it.

The key however is as i have said previously, work out why you overspend.(often psychological) Identify triggers & eliminate these.

Look at your decision making processes (harping on about interest only mortgage) and have a more considered approach, do the analysis and comparison and 'what if ' scenarios, before you commit.

enthusiasticsaver

Normally I would say no don’t sell. Cornwall is expensive though and being older you will not get a long term mortgage, certainly not interest only so I am not convinced you will be able to afford to buy anyway. Have you checked out rental costs in Cornwall and where you live now to see what the difference is? I live in south east Cornwall and a 3 bed house rents for about £700 a month which is more than your mortgage.

First off you need to stop spending on cards and overdrafts. Your soa says you can meet all your outgoings so you need to stick to that. I am assuming that the interest rate on all those debts is not 0%? Your insurances and mobile phones are high too but clearing that amount of debt will be expensive and lengthy. I am guessing you can no longer get 0% deals either?

In your particular circumstances you seem to have been backed into a corner by the fact you have an interest only mortgage and a fairly expensive one with no means of repaying it without selling and that you have huge debts. Do the sums. Get a valuation. Research rental costs and do a new soa based on your new budget once all the debts are paid off. No credit cards or overdrafts.

thepurplepixie

Have you got long to go on the loans? Is £23,000 what was taken out as a loan or where you are now? If you haven't got long to go on those 2 loans it would make a big difference. Any PPI to claim?

thegreenone

Is your house rentable? As much as I would hesitate moving a 13 year old, in your circumstances, do it now. Rent out your house and switch to a repayment mortgage. Any extra money after the mortgage is paid can go to the debts. Rent something small in Cornwall to start with sofa beds in the lounge for guests. If both of you can move your jobs there, do it.

MeenaM

hello and welcome,

here are my suggestions,
1. sell anything you can get your hands on to sell, put all of the money you make towards paying off the smallest debt first, so use the money you make to pay off the house of fraser debt, when that is cleared you can use the extra £40 per month you were paying on that towards an extra payment on the next smallest debt ie mbna card, and so on , you snowball your debts,

2. you make a budget before you get your money to tell your money where to go each month and stick to it , do it together with your husband so you both agree it

3. find any way you can to earn some extra cash, like doing surveys or switching bank accounts if you can to get a payment

a_silver_lining

I think you can make some steps towards paying off your debt and keeping your house. Even if you ended up renting it out to cover your mortgage when you move in three years, this work would be worth it to keep your money in it safe to act as a deposit when you are ready for your new life.

Phone contracts £98, reduce to £10 sim only in June and up debt payments by £68pm. If a phone dies, replace with a £50 cheapie.

You work part time so ebay items in the house or do surveys, up debt payment by £10pm. (This could be a lot higher.) I switch a second bank account for the switching payout each year and make about £100+ a year from this, so loads of ways to up income.

You say you often earn £600pm, put in this extra money straight into debt repayment, let’s say £50pm on average as a very low guess.

Building insurance renewal, haggle! My property is worth not a lot less than yours and is a ground floor flat so often quoted highly. Mine came to £120 this year, so £10pm. Renew yours to double that and you will still have an extra £23pm.

Those changes make you £151pm up and at very minimal effort.

To be honest with your expected £600pm income, taking the £55 doubled Internet expenses off, increasing your income as you have a LOT of spare time, you could add another £200 minimum to that, likely much more if you made more money. That’s £351 and £4212pa. That would easily pay your House of F and MBNA card this year, leaving your another £120pm to snowball.

a_silver_lining

Also, I’ve just realised that you said in November you realised you were in 20k of debt more then you thought and so cut up all but one credit card and have bought only food since, but yet this month you overspent by £1100?

CapricornLass

Hi, Paulapips, are you paying for your council tax over 10 months? It would be worth changing over to paying over 12 months, and putting the extra few quid on the House of Frazer card - its got a very small amount on it compared to the others.

Sympathise with trying to clothe growing son - I had two like that!

chevalier

My comments are in blue

Paulapips wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 400
Partners monthly income after tax....... 2600
Benefits................................ 80
Other income............................ 0mystery shopping, surveys especially for hubby as they need men to balance the survey quota out, selling stuff in the home, paper round for the boy?
Total monthly income.................... 3080

Monthly Expense Details
Mortgage................................ 538 any way you can borrow money from a family member so that you can get this on repayment. pie in the sky i know. Still might be worth looking at going on a repayment. the interest rate might be better.
Secured/HP loan repayments.............. 0
Rent.................................... 0 can you rent out a room to a lodger? this is tax free up to a certain amount. Or home stay for school kids?
Management charge (leasehold property).. 0
Council tax............................. 146 12 months or 10 ask for 12 months to help with budgeting
Electricity............................. 43
Gas..................................... 43
Oil..................................... 0
Water rates............................. 52
Telephone (land line)................... 57-this is internet and landline this is very high, even my un tech savvy mum gets charged less than this. If you switch via quidco/topcashback you might even get cash back as well.
Mobile phone............................ 98- for three phones contract ends in June then it can come right down. if you are in financial difficulty and tell them they may let you downgrade before June.
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 55 (I've doubled up and just noticed ) yeah that means you have 55 more to pay to the debt.
Groceries etc. ......................... 200 (sometimes 160 depends if we need extra things like cleaning stuff or meat) i personally do not think this is bad. Have you tried hunting for yellow sticker stuff for the freezer, shopping in pound shops for cleaning stuff etc.
Clothing................................ 50 (again not every month but my son won't stop growing and is already in adult sizes for years now) sympathise with the sprouting son sigh. I don't suppose you have any friends who could do hand me downs? Does the school have a second hand shop that you maybe have to ask about?
Petrol/diesel........................... 40 if you petrol is this low for a months do you REALLY need a car?
Road tax................................ 12
Car Insurance........................... 34
Car maintenance (including MOT)......... 20
Car parking............................. Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20 if you are paying this much a month i think a prepayment certificate will make this cheaper.
Pet insurance/vet bills................. 12
Buildings insurance..................... 43 is this buildings and contents. If buildings it feels high.
Contents insurance...................... 0
Life assurance ......................... 98 (always had this since buying the house)
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0 you need to factor in something here as you are not going to be able to put things on the card in an emergency if you are going to solve this problem
Total monthly expenses.................. 1609


Assets
Cash.................................... 0
House value (Gross)..................... 75000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0no old gold you can sell, old phones?
Total Assets............................ 76000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 159999...(538)......4.9
Total secured & HP debts...... 159999....-.........-
you need to know the APR for these debts in order that you can priortise paying them off.
Unsecured Debts[/
Description....................Debt......Monthly...APR
Barclaycard....................17500.....420.......0
Tesco credit card..............7585......180.......0
House of Fraser credi..........650.......40........0
Sainsbury's loan ..............10000.....167.......0
Barclayloan ...................13000.....214.......0
Nuba mbna......................5900......80........0
Halifax credit card............4400......80........0
Virgin credit card.............3650......120.......0
American express...............2400......60........0
Mbna credit card...............1500......80........0
Total unsecured debts..........66585.....1441......-


Monthly Budget Summary
Total monthly income.................... 3,080
Expenses (including HP & secured debts). 1,609
Available for debt repayments........... 1,471
Monthly UNsecured debt repayments....... 1,441
Amount left after debt repayments....... 30 not much i know but don't forget your 'found' 55 pounds because you put the internet in twice. So you actually have 85 pounds left over. Do you actually have this? If so great.

Personal Balance Sheet Summary
Total assets (things you own)........... 76,000
Total HP & Secured debt................. -159,999
Total Unsecured debt.................... -66,585
Net Assets.............................. -150,584

i always worry about not having our own home. the thing about your current situation is that you would have to default the mortgage to get evicted. With a private rental they can give you notice every year and then you have to find another place over and over again.

Can I suggest that you talk this over with Stepchange. If you are not brave enough to pick up the phone, you can fill in their online debt remedy. It might give you an idea of what your options are.
good luck
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