Sell and rent to get rid of debt?

Madsfluffy12

Currently have significant debt that is accruing 20%+ interest. I have a property that has equity that significantly exceeds debt. I can’t get 0% cards. Am I better off selling, paying off debt and renting? Then keep the equity remaining to put into future property?

david29dpo

Difficult to say without knowing your income, outgoing etc etc etc

Madsfluffy12

Income £72k, debt £55k, mortgage £230k, equity £170k. Current outgoings approx £2k per mth 

Stubod

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Emmia

Stubod said:

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Consolidation is a terrible idea, and can quickly lead to debts doubling if all the cards aren't closed and the reason(s) the debt arose aren't dealt with. 

OP do you know where the money has gone?

You may wish to pop over to Debt Free Wannabe for advice on how to tackle your debts without selling your home.

GDB2222

From the figures above, your house is worth £400k, and you have a mortgage of under 60%. The obvious solution is to remortgage, by enough to pay off the debts. Any reason why this can’t be done?

Once the debt is moved to a cheaper rate, how are things going to change in the future, so you don’t get in trouble again? 

Brie

your home with mortgage is a secured debt.  your credit cards or loans are unsecured.  there are ways to deal with unsecured debts that doesn't need to unduly effect your home ownership. 

Step one is to recognise there's a problem.  Well done for doing that!
Step two is to look at your full budget - all your incomings and outgoings.  To do that is easy with a statement of accounts (SOA - see below) which you can then post on the debtfree wannabe board and others will help you refine your budget and help you find a way to deal with the debt.  Don't forget to make the SOA as accurate as possible using your bank and credit card statements to see what you monthly spends are.

QrizB

OP you'd be much better served by starting a thread over on the Debt Free Wannabe board:

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

Or you can ask for this thread to be moved to that board.

They'll be able to give you much better advice on managing your debts and your budget.

(Just on the face of it, with an income of £72k and outgoings of only £24k pa you should be able to clear your debts within two years.)

RAS

Another vote for the DFW forum. We can't see your SOA yet but as long as your income covers your mortgage, CT, utilities, household costs, insurances, travel costs, a DMP is a good option. 

Add to which it's informal, flexible and you might be able to repay at a discount further down the line.

Please, please avoid the social media adverts for IVAs. In your situation, you'd probably pay back everything plus the IP fees(£4-9)k.

Stubod

Emmia said:

Stubod said:

I would definately NOT sell and rent.....renting is dead money. You earn more than enough to sort your debt out. You must be able to consolidate your debts, and get a loan with a lower interest rate??? 

If necessary get help from somebody to manage your income / expenditure / debt management!!

But DON'T RENT!!!!

Consolidation is a terrible idea, and can quickly lead to debts doubling if all the cards aren't closed and the reason(s) the debt arose aren't dealt with. 

OP do you know where the money has gone?

You may wish to pop over to Debt Free Wannabe for advice on how to tackle your debts without selling your home.

....I was suggesting consolidating only if the OP could get a lower interest rate???...pretty obvious (at least to me), not to do so if the rate is higher.....

RAS

Even if you get a lower rate, the length of time you are paying it off may well mean it costs more. 

And turning consumer credit into secure debt or a mortgaged property into insecure rental isn't generally a good move, certainly at current interest rates and with the rental market as it is.