Homeowner (no mortgage) - Struggling with household debts

Wildpine64

Hi all

I'm struggling with household bills/credit cards debts after leaving my previous job in January due to job stress and mental health reasons

I own my home outright after inheritance from my grandparents. I'm under 40 so lifetime mortgages and other products for over 55yo don't apply

I want to understand if and what the best way might be to get equity or loan from my house capital to help pay off/ease some of our debts and get back on the right track

Thanks all

Caz3121

are you in employment to be able to get a mortgage?

Rather than looking for a loan it may be better posting on the Debt-free Wannabe board and post up a Statement of Affairs for some advice

Nasqueron

If you don't have a job, no lender will give you credit like a loan as you have no way to repay it and turning unsecured debts like a CC into secured debts is never good

Spikeygran

Thats the wrong way of thinking.

You just need to get the correct advice on the existing debts, some can be written off these days, and what is left can have an affordable payment plan put in place. The debt free board should point you in the right direction. Theres also citizens advice etc.

Meanwhile go see your GP and start the ball rolling for the stress and mental health issues. You are probably entitled to some sort of benefits or support. If you have no income and savings you should be eligible for things like council tax rebate. Owning the home you live in, outright doesn't exclude you from any benefits.

Well done for asking for help, thats the first step out of the way. 🙂

ManyWays

Here is the link to the Deft Free wannabe board
https://forums.moneysavingexpert.com/categories/debt-free-wannabe

Keep_pedalling

is downsizing a possibility?

Wildpine64

Thanks guys, I'll certainly look into the other debt forums and post necessary info there

It's just frustrating to be struggling month to month (currently actually in breathing space to help) at the moment when I have money sitting in the form of the house if that makes sense

silvercar

https://forums.moneysavingexpert.com/discussion/comment/81964883#Comment_81964883

It makes complete sense in the short term, in the long term you have a property with no rent or mortgage to pay. Adding a mortgage or secured loan into the equation removes that security. For your own peace of mind you really should be looking long term.

silverwhistle

As others have commented you really don't want the worry of a loan of any sort really. When I first had my house I had to be careful due to a large mortgage but temporarily took in lodgers for a year to help out: is that a possibility for you?

MEM62

when I have money sitting in the form of the house if that makes sense

Whilst it might appear to, actually it doesn't. Your house with no mortgage is secure so you should not put it at risk by borrowing against it - particularly as you have not yet stabilised your month-to-month cash flow situation. It make no sense you put you biggest asset at risk to deal with, what is hopefully, a short term situation.

Pop over to the DFW board and fill in an SoA. Based on that you will get some really useful guidance.

sourcrates

Never put your asset, in your case your home, at unnecessary risk, and especially not as collateral for consumer credit debts, they are all non priority, and can be repaid at affordable rates over a longer time span, utilising debt management, never turn unsecured debt into secured, its a very bad idea.

Its a natural response to assume your equity could help you out of the financial mess you are in, but its folly to go down this route, interest is mostly at a variable rate, and can rise without much warning, the time it takes to repay such loans can be lengthy, boredom of having to find the loan repayments can set in, but not paying them can lose you your home.

Your costs will rise, and suddenly the payments are becoming harder to afford, or you get ill and can`t work, your sick pay runs out, or your company downsizes and you are out of a job, these are all things that can happen, and all are reasons not to take out the loan.

Debt management offers the same results as a consolidation loan or re-mortgage, but with zero risk to you or your home.