To sell up & rent, cash in and pay off debts

freshstart40

Deleted post thank you for your answers 

Brie

Best to stick to one board so there's no confusion about who's answering what.

Bookworm105

the other thread:
Help needed, Do I sell my house, clear the debt and start again?? — MoneySavingExpert Forum

Herzlos

How much is the house worth?

If you bought 15 years ago and have £380k in equity, then I'd be surprised if you couldn't add £60k in a remortgage.

If not, then have you considered selling current house and buying another one at less than £380k, pay off debt with the difference and then be mortgage free?

Buying to rent is going to cost you an awful lot in the short and long term.

freshstart40

The house is worth around 500k now, the bank would not let us remortgage due to being self employed, it's ridiculous really as we have so much equity and never missed payments etc.

It will cost around 35k to rent for 2 years but will pay off debts alot earlier and potentially a crazy amount of interest off. 

GDB2222

Can I check the sums?:

House worth £500k.
Mortgage £120k.
Other debts £70k


If so, you could sell the house and pay off the mortgage and other debts, then have £300k over. Could you buy somewhere for that amount?  You'd have no mortgage to pay, no interest, so could you make that work?

freshstart40

@GDB2222

Those sums are more or less correct depending on how much we would achieve through the sale. The thing with buying is we could potentially buy outright but it would take time to source at that price, my area is generally understocked at the moment and prices are around 400k for anything that needs work. Anything half decent is over 500k that said, they do come up just over 300k but would b3 a major project at that price. Its a possibility I suppose. 

GDB2222

freshstart40 said:

@GDB2222

Those sums are more or less correct depending on how much we would achieve through the sale. The thing with buying is we could potentially buy outright but it would take time to source at that price, my area is generally understocked at the moment and prices are around 400k for anything that needs work. Anything half decent is over 500k that said, they do come up just over 300k but would b3 a major project at that price. Its a possibility I suppose. 

Perhaps you can compromise on area? Or buy a smaller house and just make do? Hopefully, any compromises are temporary, until you get back on your feet, but there's a lot to be said for owning the place outright, and owing nothing to anybody. 

freshstart40

@GDB2222

Yes I completely agree with you there and that has always been a goal, I've always wanted to move areas and buy something outright with the money we have made. Makes sense.

gwynlas

I would not usually advocate securing debt on your house but with the anount of equity you have it would be foolish to give it up to clear debt. You might never get back on the housing ladder and there is the cost of buying and selling to consider. Instead of pursuing jobs in your own sector would you consider any job just to get back into work? The other thing is that you need to be totally honest with each other regarding debt and perhaps post a SoA for further advice with debt management?

Zoe02

Just to encourage you, sometimes feels like the world is coming to an end and then things get better. 

Keep applying depending on your field check linkedin, indeed etc.

Might have to do something else in the meantime.

Communicate with your partner work together.

The equity in the property is good, an option could be downsizing or moving areas then mortgage free with money left after debts cleared.