£40k debt, house sale?

Hop75

Evening all

It’s late and I’m knackered, so please forgive lack of detail, but I’d really appreciate your thoughts.

I have just over £40k debt, mostly credit card and a small amount on overdraft. This has been the case for many years now and I’ve learnt to live with it, but it’s always on my mind, it’s stopping me doing things I want to do, it’s wearing me down and I want to do something about it.

I have my own house - with a mortgage - and whilst I can manage my commitments, including the mortgage, there’s not a huge amount left at the end of each month, plus I tend to use my credit cards. So whilst my debt isn’t increasing it’s not decreasing either.

Now in my early 40s with a good job, there are things I want to do, places I want to see, and the debt is holding me back. In the past I’ve had - and paid off - more than one personal loan and I found these to be a sensible way to borrow.

Apart from the £40k debt, I’d also like to sort my mortgage. I’ve been sat on my lender’s SVR for a number of years now and, without the credit card debt, I’d be confident of getting a much better rate on my mortgage. However, as things stand currently, I’ve not even bothered trying on the mortgage front since my assumption is it would be a non starter.

For the first time I’ve started to research potential debt options and have received some advice from StepChange online, which suggests DMP as best option.

However, I’m wondering if a better solution might be to sell my house, use the proceeds to clear my debt, and start over?

My outstanding mortgage is £100k and I reckoned my house is worth £145-150k.

In round terms, if I sold for £145k, cleared mortgage and the debt, would I then be able to go visit a broker (or bank) and apply for a new mortgage?

Thanks in anticipation. And thanks for reading.

Hop75

sourcrates

Hi,

Sleep on it, in the morning, or should I say later this morning, post up a statement of affairs, we need a full picture to give proper advice.

People have done this, as debt options for homeowners are limited, but it needs very careful research first.

macman

You need to say what rate you are paying on your mortgage, and what rates and how much on the cards. You have £45k minimum equity in the house, so remortgaging is another option?
Sitting on SVR without even checking if you could get a better deal is just daft-what's to lose by trying?

Pixie5740

if you sell your house where will you live? Yes you can rent but in the long term renting usually works out more expensive. Besides if you haven't got a handle on your budgeting all you will do is sell your home and then wind up in exactly the same position you're in now.

Your assumption about mortgages is costing you money and in all likelihood wrong. You could discuss your options with a mortgage broker or your current lender will probably offer you a retention product with a better rate than the SVR.

System

Don't sell your house! Chances are at your age and credit you'll struggle to get a mortgage on another. I personally think five years of tightening your belt will see a lot of that debt off. Can you post a SOA so we can see your out-goings?