Lots of different debt

ffswisstony · 15 November 2019 at 10:33AM

Hi.
I renovated a house for me and my partner, before the project was finished we broke up. I've finished the house and put it on the market at 450k last year, over a year later I now have it on at 400k but no joy. I borrowed a lot of money to renovate the house which I am paying back on my own, as well as the mortgage and bills. I work two jobs, do overtime and airbnb my house while I stay at friends and family. I'm not missing payments, but it's a struggle and credit cards are coming to the end of their 0%. I have around 80k worth of debts to 3 credit cards, 2 loans, friends and family as well as 30k to my ex, and my mortgage is 157k, so plenty of equity. I'm trying to find a way to consolidate these debts to get my monthly payments down as well as paying of the ex and friends. I'm confused by consolidation loans, secured loans, loans against the house etc. I feel I'm missing some way to make things easier until I sell the house. My credit rating is good, I've never missed a payment or had adverse credit, but its affected by my "debt to income"
Thank you for reading
Regards
Anthony

[Deleted User] · 15 November 2019 at 10:37AM

ffswisstony wrote: »

Hi.
I renovated a house for me and my partner, before the project was finished we broke up. I've finished the house and put it on the market at 450k last year, over a year later I now have it on at 400k but no joy. I borrowed a lot of money to renovate the house which I am paying back on my own, as well as the mortgage and bills. I work two jobs, do overtime and airbnb my house while I stay at friends and family. I'm not missing payments, but it's a struggle and credit cards are coming to the end of their 0%. I have around 80k worth of debts to 3 credit cards, 2 loans, friends and family as well as 30k to my ex, and my mortgage is 157k, so plenty of equity. I'm trying to find a way to consolidate these debts to get my monthly payments down as well as paying of the ex and friends. I'm confused by consolidation loans, secured loans, loans against the house etc. I feel I'm missing some way to make things easier until I sell the house. My credit rating is good, I've never missed a payment or had adverse credit, but its affected by my "debt to income"
Thank you for reading
Regards
Anthony

I think your best option is to sell the property. Anything will sell if priced correctly so if you're not getting any offers for £400k then your house isn't worth £400k. Are you getting viewings at least?

-taff · 15 November 2019 at 12:11PM

If your house didn't sell it's because it's priced too high. Did you look at the sold prices of properites in your treet or your area for houses of a similar size?
Price your house to sell instead of what you think it's worth and it'll sell.

ffswisstony · 15 November 2019 at 1:25PM

I've had 4 people wanting to buy it when it was at 425k, but they can't sell theirs and 3 have taken theirs of the market because they can't sell. It was valued by 3 estate agents at 450k but that was a year ago. The selling of the house wasnt really my question, I would like to know any other options available to me.
Thanks for the replies
Anthony

fwor · 15 November 2019 at 2:12PM

Sorry for the repetition but, as above, with £110k of debts and a £157k mortgage, by far the best option is to get the house shifted.

Taking the price down by £5k to grab attention is likely to have an affect, unless the property has been drastically over-valued. There really doesn't seem to be any other sensible way to get £110k's worth of debt off your back.

It varies a bit from place to place, but a property that I own was valued just over a year ago at £440k, and the current valuation is £400k, so the £450k valuation on yours probably isn't relevant now.

foxy-stoat · 15 November 2019 at 2:29PM

You can take out a secured loan - just read the terms and conditions, understand the interest rate and how much you will end up paying over the term. Turning unsecured debt into secured is never a good idea but if the £110,000 was purely for renovating your house then go for it. It may help you in the long run if your ex wants her equity out and not willing to entertain unsecured debt.

Dont fall into the trap of thinking, I will turn my credit card interest into a lower amount of say 7% - as 7% in 6 figures over 10+ years is hideous interest. There is a reason why folk never stay on their SVR long and fix it as soon as the term ends.

Good luck.

Thrugelmir · 15 November 2019 at 2:33PM

ffswisstony wrote: »

I would like to know any other options available to me.

Continue to reduce the price until the property sells.

ratrace · 15 November 2019 at 4:08PM

I would sell the house for about £350,000 pay current mortgage off of £157,000, pay off the £110,000 debts to everyone thats leaves you with about £80k to put down on another smaller house, stops you working all hours god sends and lets you live life, what has been the real saving grace here is the equity in the house without that you could have ended up with bankruptcy as a worst case and no 80k deposit

reduce the sale price let it go mate and move on with life, is money really worth all the stress and anxiety not really, our biggest asset is our health

-taff · 15 November 2019 at 4:27PM

If you tried to get a loan at the moment to consolidate, it's ot likely you will once they see how much you currently owe. They don#t take the view, oh, he's paying off several small bills with this and then he'll just pay this one easy payment month.
What they do is say, how much does he owe? Is it realistic to give him money which essentially doubles his debt? Can he afford it?
The answers to those thee questions are invariably why people who owe a lot of money can't consolidate.
You don't really have any options except keep shifting the debt to 0% cards and paying it down.
If you tried a secure loan the interest on that is not going to be pretty and will eat into your current equity making it even more essential to sell the house quickly.

ffswisstony · 15 November 2019 at 4:38PM

Great advice thank you. I wrote my post wrong, the total is 80k worth of debt, not 80k plus 30k, sorry for the confusion. I will look into a secure loan, total cost/monthly payments and also speak to my estate agent about the value, I won't dive head first without knowing all the details. I really appreciate the time you have all taken, it has made me look at the situation in a different way.

[Deleted User] · 15 November 2019 at 5:43PM

I think a mortgage would be less expensive than a secured loan. Are you able to take out a new mortgage, one that allows Air BnB lets, just in your name which would allow you to pay off your ex and consolidate your debts? I think if you apply for a secured loan in just your name secured against a jointly owned property then your ex could kibosh it.

Lots of different debt

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