Moving house to clear mortgage but not debts
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How is your dmp managed ? Self managed, or stepchange / payplan etc? Do you have an annual appraisal from your creditors?
When I was on a dmp with payplan , I was given a yearly appraisal .
One thing that was always asked was the equity of my home ,and would I consider remortgaging . I wasn't pushed , but it was a routine question that had to be asked . Taking all that into account , I would imagine that if you did move and still owed money on your dmp, then you would probably be asked to pay more and settle in a shorter period than you presently do . Of course, don't forget the cost of moving and legal stuff etc.
Best of luck0 -
Is it possible for you to sell, pay off your DMP, and then buy a smaller place with a small mortgage?? (Which you could possibly overpay, subject to your circumstances)0
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Hi, if you sell and buy in one transaction (in an ordinary property chain) the money will never hit your accounts as the solicitor will handle it for you. Your creditors will be no worse off.
You can change your address as you have moved house but don't need to mention the financing of it. If anyone does enquire then simply "we moved house without extending our borrowing".
Remember if you want to move you don't have a choice about paying back your mortgage borrowing - your mortgage lender requires that you do so and your solicitor won't give you a choice about it. Your mortgage is secured against the property while your other debts (I assume) are not. Because of this it is not a choice to prioritise your mortgage borrowing - you must. The equity you hold is already there in the house and you are simply moving it from one property to another.
If any of your debts hold a charge against your property they will also need to be paid off on the sale.
Tlc0 -
Chocolate_Teapot wrote: »Have you contacted the debt management plan company? We did this last year, sold our home, paid off our debt management plan and we are now currently renting. When we contacted stepchange before putting our house up for sale they told us any equity from the sale of the house HAD to go to the creditors first. Just a thought to double check with them first.
I think that was pretty unfair of SC and I'm surprised they told you that you HAD to use your equity to pay off debts. A DMP is an informal agreement and you are/were under no obligations (legally wise) to clear your debts with any equity. That said -if you wanted to and that allowed you to become debt-free well that's great for you.
If it were me, I wouldn't ask SC what their views on this are.0 -
desperate_housewife wrote: »It sounds ideal really.....it’s the legal side of it that troubles me.....I want it done right so I don’t upset the creditors. The smaller house without a mortgage is perfect. Just not enough equity to pay the debts too.....I don’t want to get too excited and it doesn’t work out....
Seriously, you are overthinking this.
If it suits you/your lifestyle to downsize in order to be mortgage free - go for it. It's none of your creditors business and as long as you keep to your end of the bargain (paying via the DMP) then why would they concern themselves with what you do or where you live.
Yes, your address will change -but all you do is inform them of just that and carry on with your payments. If becoming mortgage free allows you to pay more to your creditors and you want to do that, great -although if it were me I'd save the extra money for F&Fs.
Ultimately this is your DMP and its your choice how you handle it.0 -
Chocolate_Teapot wrote: »Have you contacted the debt management plan company? We did this last year, sold our home, paid off our debt management plan and we are now currently renting. When we contacted stepchange before putting our house up for sale they told us any equity from the sale of the house HAD to go to the creditors first. Just a thought to double check with them first.
This worries me as SC have advised it’s ok.....Thank you for your time though. I hope things are going ok for you now.:wave: :rotfl: JRP0 -
Seriously, you are overthinking this.
If it suits you/your lifestyle to downsize in order to be mortgage free - go for it. It's none of your creditors business and as long as you keep to your end of the bargain (paying via the DMP) then why would they concern themselves with what you do or where you live.
Yes, your address will change -but all you do is inform them of just that and carry on with your payments. If becoming mortgage free allows you to pay more to your creditors and you want to do that, great -although if it were me I'd save the extra money for F&Fs.
Ultimately this is your DMP and its your choice how you handle it.
Thank you so much....really appreciate your time. Yes you are right. Definitely want to do offers but it will take some serious saving but can’t wait to have my life back.....I’m constantly anxious about the dmp.:wave: :rotfl: JRP0 -
Many thanks....really appreciate your advice. Great! XHi, if you sell and buy in one transaction (in an ordinary property chain) the money will never hit your accounts as the solicitor will handle it for you. Your creditors will be no worse off.
You can change your address as you have moved house but don't need to mention the financing of it. If anyone does enquire then simply "we moved house without extending our borrowing".
Remember if you want to move you don't have a choice about paying back your mortgage borrowing - your mortgage lender requires that you do so and your solicitor won't give you a choice about it. Your mortgage is secured against the property while your other debts (I assume) are not. Because of this it is not a choice to prioritise your mortgage borrowing - you must. The equity you hold is already there in the house and you are simply moving it from one property to another.
If any of your debts hold a charge against your property they will also need to be paid off on the sale.
Tlc:wave: :rotfl: JRP0 -
Beetroot24 wrote: »Is it possible for you to sell, pay off your DMP, and then buy a smaller place with a small mortgage?? (Which you could possibly overpay, subject to your circumstances)
Fab idea.....don’t think a mortgage company would touch us with a barge pole!:wave: :rotfl: JRP0 -
desperate_housewife wrote: »Fab idea.....don’t think a mortgage company would touch us with a barge pole!
I'm not sure it is a good idea, its effectively turning unsecured debt into secured debt.
If you can downsize and pay off the mortgage then have more to chuck at the DMP then that seems sensible & and protects you against and changes in circumstances.0
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