Sell house and pay off secured loan

Emskyb

Hi all :-)
I am struggling with a decision, I was very ill last year and took out a secured loan, it wasn’t ideal but it was the only option I had, with a very bad credit rating.

I have tried to get back on my feet after being ill and I quickly fell into arrears with everything. I am self
Employed and money can be sporadic.

My payments on mortgage have gone
From 700 to 900 a month to pay arrears and payments on secured loan from 360-400. Neither can accept a lower amount.

I am toying with a fresh start, I have a static caravan also that has no bills attached and I am thinking about selling the house and paying off secured loan and other debts to get clear, live in the caravan for 6 months to save, then looking at property again next year.

Finding it a rough decision as getting rid of the house seems like a big thing, but I am not going to be able to settle the loan any other way.

House is worth 180k
Mortgage settlement 153k
Loan Settlement 17k

So after costs etc would leave me with £5k but debt free, does it seem a bit drastic?
Paying the combined Mortgage and second charge
Loan is just getting too much and I can’t get any further forward

glennstar

Where are the costs associate with the sale? Have you investigated those or are they included in the respective settlement figures?

fatbelly

As a general principle it's better to sell in the market rather than be repossessed so if you can get out (the numbers may be tighter than you think) I can understand.

But you will have the costs of the sale and a subsequent purchase to think about.

dealer_wins

Also bear in mind you may also struggle to get approved for another mortgage due to your erratic earnings.

foxy-stoat

What did you spend the £17K on? If it was paying off old debts then have you done the PPI reclaim thing?

You need to produce a budget on excel spreadsheet and see if you can afford to live (with no unforeseen problems) for the next 5 years and how does your loans/finances look along the way.

If your struggling to meet your commitments each month for the next few years then any one of a number of unexpected costs will send you over so getting out now and cleanly may be the best option.

Whats the housing market like in your area, rising, flat or sinking?