Selling house to pay off debt? good idea or bad?

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  • macman
    macman Posts: 52,992
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    edited 13 September 2019 at 6:51PM
    You say you have a very poor credit history, so how are you going to pass the credit check when you try to rent a property?
    I too am baffled as to how you cannot afford £2K pm repayments if your gross income is £8.5K pm?
    No free lunch, and no free laptop ;)
  • Are you sure your house is too small? A family of four is not huge and your house is worth nearly half a million so i’m Hoping it’s a 3 bed at least!

    Maybe we can help with tips on making the best use of the space too?
  • debtaghh
    debtaghh Posts: 1,794
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    I did exactly like you are wanting to do and would not advise you to do it. We didn't have enough money to clear all our debt and are now living in rental accommodation with more debt . I don't find renting easy, you have no security to how long you can stay for and have to ask permission for every little thing.

    I thought at the time that I knew best and it's the only way out... I wish I knew then how my life would be now.

    Try budgeting where you can, write every penny you spend down as that is a true eye opener. Focus on paying the highest interest rates first. If your dh has good credit, have you tried applying for 0% credit cards if you're paying interest?
  • Tee25 wrote: »
    We are in Hertfordshire. We are looking at moving to North herts where you get more for your money. We could sell our house for £450,000 and then look at buying something cheaper to pay off most of the 70k debt. This is not taking in to account stamp duty moving fees etc

    If you were going to consider this plan then it MUST be to clear your debt entirely - and any excess once the debts are gone MUST go into a savings pot ready to work as a deposit for a new property.

    If you were to buy afresh for £400k then you'd be looking at £10k stamp duty - add to that another few thousand pounds for legal fees, removals etc and suddenly you have to start wondering whether you're throwing good money after bad?

    I'm going to agree with those saying to post an SOA - as someone else has said, even with 2k on min payments there should still be a good surplus in your pot - so if there is not that needs addressing before you take any other steps, particularly one that will leave you asset-poor and potentially in a worse position than you are currently.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Are you sure your house is too small? A family of four is not huge and your house is worth nearly half a million so i’m Hoping it’s a 3 bed at least!

    Maybe we can help with tips on making the best use of the space too?

    If they are in the south of the county, the bit around the M25, there is every chance that this could be a 2-bed for that money.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
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