Selling up to pay off debt quicker

cookie-monster_10

1st post so I apologise in advance for rambling.

Hubby-2-be and I have debts of just under £22,000 (mainly from uni and bad property decisions) but are desperate to get rid of these asap. We both have good jobs and a good monthly income (approx £5000pm) and are pretty good at budgeting but with mortgage, bills and debt payments it feels like there's nothing left.

We're seriously considering selling our house - mortgage is approx £1200pm and we could easily rent somewhere nice for approx £600pm so we'd have much more to put towards our debts. This means we could pay all the debt off and have enough to get married within a year and then we could start saving for a deposit for a new place.

There seems so much pressure to climb the property ladder but it's more like property snake in our case!!! However, if we can sell the house for enough to clear the mortgage and selling fees etc. it would give us a bit of breathing space for a couple of years until we're in a better position to try again.

Sounds sensible to me or is this totally the wrong thing to do???

poppyg_2

Hi cookie monster, I'd suggested putting up an SOA, it might not be necessary for you to sell your house, unless you do think this is the best way to go, just seems your debt isn't that high considering your earnings but obviously I don't know how high your mortgage payments etc are.

~Beanie~

£1200 per month mortgage out of £5000 should leave £3800 - which should be plenty for bills and debt repayment.

Can you post a full SOA?

cookie-monster_10

SOA:-

Incoming:
H2B - Approx £3000 (Self-employed so variable)
Me - £1600

Total - Approx £4600

Outgoing:

Mortgage (After Fixed Rate Ends 31/05/08) £1,300.00
Loan £616.40
Car Payment £259.77
Council Tax £130.00
Electric Bill £35.00
Gas Bill £42.00
Water Rates £31.46
TV License £11.37
Home/Contents Insurance £17.54
Phone/TV/Broadband £45.00
Mobile Phone -100% Cashback (H2B) £45.00
Mobile Phone - 100% Cashback (Me) £45.00
Mortgage Protection (H2B) £45.50
Mortgage Protection (Me) £43.36
Professional Fees (H2B) £157.00
Income Protection (Self Employed) £54.00
Income Protection (Self Employed) £22.97
Professional Subscription (H2B) £38.25
NI Contributions (H2B) £11.00
Private Pension (Me) £100.00
Food & Household £200.00
Diesel £100.00
Travel Pass £30.00
Spending Money - (H2b) £150.00
Spending Money - (Me) £150.00
Annual Expenses £250.00
Credit Card - Minimum Payment (2.5%) £125.00
Wedding (Feb 2009) £500.00
Total £4,555.62



Debt:-
Moneyback Loan (10.3%APR) - £16.642.28 - 28mths remaining
Car Finance (10% APR) - £3192.24 - 12 months remaining
Credit Card (0% - 6 months remaining) - £2601.28

Total - £22435.80

Wedding is booked and deposits paid so can't really and don't want to cut back any further on that and mobile cashback also going into this account. We've already sold one car to get rid of some debt and reduce monthly outgoings. I've budgeted £150 each for spends to include clothes, etc. and again compared to some of our friends this is tiny!

cassy

cookie-monster wrote: »

SOA:-

Incoming:
H2B - Approx £3000 (Self-employed so variable)
Me - £1600

Total - Approx £4600

Outgoing:

Mortgage (After Fixed Rate Ends 31/05/08)£1,300.00
Loan £616.40
Car Payment £259.77
Council Tax £130.00
Electric Bill £35.00
Gas Bill £42.00
Water Rates £31.46
TV License £11.37
Home/Contents Insurance £17.54
Phone/TV/Broadband £45.00
Mobile Phone -100% Cashback (H2B) £45.00
Mobile Phone - 100% Cashback (Me) £45.00
Mortgage Protection (H2B) £45.50
Mortgage Protection (Me) £43.36
Professional Fees (H2B) £157.00
Income Protection (Self Employed) £54.00
Income Protection (Self Employed) £22.97
Professional Subscription (H2B) £38.25
NI Contributions (H2B) £11.00
Private Pension (Me) £100.00
Food & Household £200.00
Diesel £100.00
Travel Pass £30.00
Spending Money - (H2b) £120.00
Spending Money - (Me) £120.00
Annual Expenses £250.00
Credit Card - Minimum Payment (2.5%) £125.00
Wedding (Feb 2009) £500.00

Total £4,495.62


Debt:-
Moneyback Loan (10.3%APR) - £16.642.28 - 28mths remaining
Car Finance (10% APR) - £3192.24 - 12 months remaining
Credit Card (0% - 6 months remaining) - £2601.28

Total - £22435.80

Wedding is booked and deposits paid so can't really and don't want to cut back any further on that and we've already sold one car so get rid of some debt.

hopefully easy to read now

Nala

Cookie-monster well done for posting your SOA.

Only a couple of points....£150 each spendo....cut this down to £50 each if you feel you really need it. Do you really really need need new clothes every month? So what if it's less than your friends have - it's you and your DH2B who have to pay your bills.
I'm intrigued to know what £250, monthly, for annual expenses is?