Sell house to clear debt & start a clean slate

getmore4less

£135k 3% 25years would £640pm with £200pm being capital.

Can't see renting being cheaper.

MovingForwards

Do not sell, it's hard going into a rental after having your own place.

Head over to the other board and we will help you unravel this!

Doozergirl

I missed that you're already in a DMP. The DMP should mean being able to sleep at night! It's written by people all over the DFW board - that the stress suddenly disappears for them. But it does take the courage to admit that there is a problem that needs curtailing.

You are paying into the DMP what would go into savings if you rented. The savings you think you're going to be making (if you make them at all) are simply paying off that debt, just retrospectively.

But on top of that, you're increasing your outgoings by giving to a landlord instead of into your own pockets. It will make you poorer.

The freedom you're longing for away from the DMP is just being freed up to spend or save. You're talking about it going towards potential 'holidays and birthdays' - but that was the equity you had in your own home, just released!

You're continually in the cycle of wanting more and the DMP isn't feeding your desire to have more. Now you want a bigger house and think it's not costing any more. But it will.

Your DMP almost certainly means defaults, so it's going to be six years before your credit ratings recover anywhere.

There is literally zero benefit to moving other than better opportunity to spend money. Giving it to your dad shows that you don't even trust yourselves.

If you stick with the house and with the DMP you will be so proud of yourselves, but at the moment I don't think that lightbulb moment has struck you. Happiness is not found in an extra bedroom nearer to school.

steampowered

It doesn't sound like it is a good idea to lose the security of being a homeowner with equity to go into rented. Particularly as you don't have a good credit history.

You have a lot of equity in your house.

Could you move to a cheaper property? That will help pay down a chunk of your debt.

Could you remortgage? Again that might help make things more manageable by paying off a chunk of your debt, and putting the rest on a low interest rate.

jimbog

Lucielace wrote: »

the other half into saving so we can enjoy holidays and birthdays etc.

drastically cut back on these would be my suggestion

Larac

Personally I would not sell the house - I was in a similar position seven years ago with the same sort of debt. Similarly could have done the same - but did'nt as felt house prices would go up and would never get back on the mortgage ladder. So glad I did'nt! I needed the 'cold turkey' of a DMP to sort out my spending behaviour. I fear that what you are doing is a bit like a 'consolidation loan' where you will clear the debt but not address the reason why you are overspending.

Crumble2018

Ok - I have been in your situation. I have a serious spending addiction. I ran up about the same amount of debt as you over a number of years, and in 2012 we sold up and moved in with my in-laws in the hope of saving up a deposit again and getting back in the housing ladder.
It didn’t happen. I didn’t resolve my spending, and added to that, I broke my leg very badly and lost money in wages when I was off work for 5 months. Although we cut our debt down, we didn’t eliminate it.
In 2016 we moved into rented. I hate it. You have no security and it never really feels like a home.
We have now been thrown a lifeline - my in-laws have given us some money, and it cleared all our credit cards, and has given us enough for 5% deposit on a flat. But we’ll now struggle all over again until we are 70, but it’s worth it to have our freedom back.
If you can avoid selling up, please do. But I know how that amount of debt can feel like a mountain you’ll Never get over.
What I will say is that if you do sell, make sure the remaining money is put somewhere you can’t touch it, and get help if you have a spending problem. I saw a therapist, and he made me address the reasons WHY I over-spend. I will always struggle, but I’m in control now, and will Never touch credit cards again.
So please address the reason why you are in this position, or you’ll end up there again.
Good luck xx

Cakeguts

The basic problem is that you can't afford holidays. You also can't afford to spend much on Birthdays. Even if you rent this will not change.



You are talking about £1000 a month bills not including food or rent. What are you spending that £1000 on if it doesn't include your food bill? If you can't save towards your debts with your mortgage you are certainly not going to be able to do it if you rent a bigger house.

pioneer22

OP would you qualify for an Aldermore Mortgage?

https://intermediaries.aldermore.co.uk/media/1069/residential-mortgages-product-guide-pdf.pdf

katsu

It was suggested that you post an SoA over on the debt free wannabee board. I think that is a great idea as it isn't clear what your monthly situation is. You say you are already in a DMP, so that should mean you are paying a manageable monthly amount for your debts and have enough to save for your other essentials. Have you borrowed extra money that is not in your DMP?

I think the posters who said that maybe working through this situation better helps you take control of your budgets were making a good point. If the rent is more than your mortgage then in the longer term you are spending more money.

I'm sorry that you may have found some responses hard to read but everyone here wants you to make the right choice for you.

Good luck with whatever decision you make.