Sell house to clear debt & start a clean slate

Yalpsmol

We have just had a mortgage offer (164k- 95% LTV so not the best rates) and its still less than 700 a month. It doesn't sound like you can afford to rent a bigger house, holidays, or any significant birthday spending. I would forget about those things for a few years. Your life can be perfectly good without them. I havent been on holiday (even in the UK) for years and have never bought my partner of 5 years a Christmas present (or him me). If we had kids, realistically things would be even tighter (as they presumably are for you).

1000 rent cant be cheaper than your mortgage.

Murphybear

You may not find it is that easy to get a rented property with your credit history. If you can find a LL that doesn’t use an agency you may find they don’t do a credit check but you won’t have LL references. Properties like this are very popular but you will probably be competing against a lot of people.

Sorry to sound a bit negative but I agree with the others. Once you own a property don’t sell it unless you have to or you may find you can’t get back on the ladder.

This happened to us, we sold our bungalow 15 years ago and moved 200 miles away. We became self employed but weren’t able to buy again (but this was partly due to age). This worked for us as we fell on our feet with a 3 bedroomed house on an over 60s complex and we have no children to leave property to.

There’s lots of wise advisers here who know what they are talking about. Good luck with whatever you decide to do

Rosieandjim

just to add; I hope your dad is not going to put the 45k into his own bank account as this could have implications for him if he ever needed care as it would be taken into account. Also if something happened to him it becomes part of his estate. I agree with above posters if there is anyway you can keep your home or downsize you mortgage that is the way I would go.

warby68

A house, 2 maternity leaves and a wedding on ok but far from fantastic incomes in just a few short years leading to consumer debt close to double your annual incomes. It sounds a bit like 'we want it all and we want it now'. That probably needs to change and you get far more used to what you can and cannot afford before you do something drastic like give up your biggest security. To be honest you sound like you're looking for the easy way out and your next 'treat' in life, a bigger house.

Your boys are small and can share until you have the debt sorted.

The key is probably why hasn't a DMP worked for you? It probably has but you don't like living in your means.

Let the debt free wannabes help you and see what other options there are. Insecure renting with landlords who take people with poor credit and with small children sounds an unattractive choice. You might have to move every year or two and lose more money that way.

That all sounds harsh but you're young and have had plenty of 'feast' years already. You probably need a few 'famine' ones to rebalance things and in the interests of more security for your lovely family.

CM1980

How much are you paying off your debts per month as part of the DMP? Does this cover all your debts or do you have others too?

getmore4less

Rosieandjim wrote: »

just to add; I hope your dad is not going to put the 45k into his own bank account as this could have implications for him if he ever needed care as it would be taken into account. Also if something happened to him it becomes part of his estate. I agree with above posters if there is anyway you can keep your home or downsize you mortgage that is the way I would go.

It is not a gift or a loan it becomes a bare trust, money held by the dad for the benefit of others does not count for care or as part of his estate.

fatbelly

Lucielace wrote: »

But my mum thinks we are making wrong decision?!

Advice needed please.

I agree with mum.

See you over on debt-free wannabe

getmore4less

Lucielace wrote: »

We had debts before buying, but then had two children close together in age which meant our spending went higher and I was on mat leave for 18 months altogether so in a short time we just wracked up debt & we got married last year.

So why don’t you think we will get back on the market?

We bring in a month roughly £3200
Our rent would be around £1000
And our bills etc would come to around £1000
Leaving us with around £1200 disposable income including food.
So we plan to save half into savings we can’t touch I.e where the 45k will be and the other half into saving so we can enjoy holidays and birthdays etc.

I suspect you don't have a proper budget and these are just guesses.

You need a much finer breakdown of where you money has been going and where you want it to go.

how much is really left of that £1200 after everything, how much goes on food/groceries/household probably more than a 1/3 so you are down to £800pm
I think your idea to save 1/2 and spend 1/2 will turn into spend all very quickly.

As has been said you should go to debt board do a full SOA and get the full picture before going ahead with your current plans.

AnotherJoe

Doozergirl wrote: »

. Getting married last year will have compounded the issue.

Nope, thats not inevitable, that was a personal choice of the OPs, "shall we keep our house safe or have a fairy tale wedding ... hmmmm "


And still heading down that road "So we plan to save half into savings we can’t touch I.e where the 45k will be and the other half into saving so we can enjoy holidays and birthdays etc."


Which isn't actually "saving" but spending !


Until OP changes their attitude seems likely they will inevitably just pile up more debt whatever they do, despite being in massive debt still contemplating more spending - bigger house than they need (its not actually necessary for kids to have their own rooms) , holidays they cant afford and so on.

Better to spend 5 years living on beans and get out from that debt and still own a home than the rest of their lives in rented.

Doozergirl

AnotherJoe wrote: »

Nope, thats not inevitable, that was a personal choice of the OPs, "shall we keep our house safe or have a fairy tale wedding ... hmmmm "


And still heading down that road "So we plan to save half into savings we can’t touch I.e where the 45k will be and the other half into saving so we can enjoy holidays and birthdays etc."


Which isn't actually "saving" but spending !


Until OP changes their attitude seems likely they will inevitably just pile up more debt whatever they do, despite being in massive debt still contemplating more spending - bigger house than they need (its not actually necessary for kids to have their own rooms) , holidays they cant afford and so on.

Better to spend 5 years living on beans and get out from that debt and still own a home than the rest of their lives in rented.

I wasn't saying anything much different, but I was being being polite!

These threads have a habit of one person replying politely without trying to be judgemental, and trying to present the logic, evidence and help them to their lightbulb moment, and then other people piling in later with the gloves off.

Paying off the debt doesn't have to mean eating beans either. You set your own budgets. A DMP will allow you a standard of living, it just focusses the mind on a proper budget, primarily because the credit has run out.

The OP clearly didn't like what was said at a much earlier point in this thread, and I see no evidence of them on DFW. Whilst people continue to seek their inner happiness in possessions, they'll continue down the route until it is completely exhausted. Those that realise what's happening at the point they have to consider selling their own house are the lucky ones.

Once you have a roof over your head and enough food to eat, happiness is an inside job, not an outside one. No one needs permission to feel happy.