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  • FIRST POST
    Scarlett1212
    Would you sell your house to pay off your debt
    • #1
    • 7th May 09, 6:44 PM
    Would you sell your house to pay off your debt 7th May 09 at 6:44 PM
    Hi everyone, I am in over 30k of debt and have around the same in equity in a flat we hate living in, we are thinking about selling up and starting again but i don't know if it is a knee-jerk reaction to the debt or a good idea - keep changing my mind. We would rent for a while and be able to save for a deposit for the future - another reason we are thinking about doing this is that our mortgage is now on a tracker (0.75% above base rate), so our mortgage is low at the moment but that could change at any time and we would be in trouble as we are just getting by at the moment. We can't change the mortgage on to a fixed rate due to the debt. What would you do? - need some fresh eyes here.

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    Last edited by Former MSE Rose; 12-05-2009 at 8:10 PM.
Page 1
  • gillian46
    • #2
    • 7th May 09, 6:54 PM
    • #2
    • 7th May 09, 6:54 PM
    If you hate living in the flat then I would sell in a minute. You can always get back and buy another house at a later date. If you are struggling to cover the mortgage now with rates so low then you should sell. Find somewhere to rent where you are happy.

    G
    [/COLOR]
    01/07/03 115,000 original mortgage completion date July 2020
    2/07/10 63657 MFD now 12/2014 five years seven months early
    • *Vikki*
    • By *Vikki* 7th May 09, 7:00 PM
    • 1,320 Posts
    • 1,779 Thanks
    *Vikki*
    • #3
    • 7th May 09, 7:00 PM
    • #3
    • 7th May 09, 7:00 PM
    I would sell it!
  • Buddingblonde
    • #4
    • 7th May 09, 7:16 PM
    • #4
    • 7th May 09, 7:16 PM
    If I thought that selling my home would clear off all my debts free and clear then I would go for it!
    • Tixy
    • By Tixy 7th May 09, 7:17 PM
    • 31,062 Posts
    • 39,469 Thanks
    Tixy
    • #5
    • 7th May 09, 7:17 PM
    • #5
    • 7th May 09, 7:17 PM
    Considering you don't like it anyway I think it may be the way to go. Have you checked you can rent somewhere you would prefer for a similar amount to your mortgage (although of course you will have some extra money from not repaying debts).

    Also don't forget that some money will be taken up by estate agents fees, solicitors fees, home information pack fees and moving costs - could be around maybe 5k so you may have enough to repay all debts.

    Also don't forget it could take some time to sell in such a depressed market.
    A smile enriches those who receive without making poorer those who give

    or "It costs nowt to be nice"
    • patchwork cat
    • By patchwork cat 7th May 09, 7:18 PM
    • 5,666 Posts
    • 8,762 Thanks
    patchwork cat
    • #6
    • 7th May 09, 7:18 PM
    • #6
    • 7th May 09, 7:18 PM
    Without doubt. Get out and start again, clean slate. Peace of mind and not having years of hardship is worth a lot. Only thing is learn from it and don't get in deep again as it will be a while until you have that sort of equity in a property again.

    • Primula
    • By Primula 7th May 09, 8:15 PM
    • 951 Posts
    • 2,167 Thanks
    Primula
    • #7
    • 7th May 09, 8:15 PM
    • #7
    • 7th May 09, 8:15 PM
    I would sell and then I could sleep at night again! I'd also make sure to cut up all the credit cards etc which got me in the mess in the first place and vow never to go there again!
  • Kudox
    • #8
    • 7th May 09, 8:44 PM
    • #8
    • 7th May 09, 8:44 PM
    I would sell, in fact am considering doing so.
    DMP Support Thread Member 238
    DMP started October 2008
  • Scarlett1212
    • #9
    • 7th May 09, 8:54 PM
    • #9
    • 7th May 09, 8:54 PM
    Thanks everyone for your replies, you have helped clear my mind - I think one of the things that was worrying me was coming off the market as I have owned one way or another since i was 22 and only rented a council tenancy before that, so i'm not sure what renting privately is like - but I will be finding out. I've already cut up my credit cards - and i will cancel all bar one (for emergencies only!!) when they are paid off. Thanks again.
    Last edited by Scarlett1212; 07-05-2009 at 8:58 PM.
    • Toto
    • By Toto 7th May 09, 9:31 PM
    • 6,446 Posts
    • 10,902 Thanks
    Toto
    I did just that scarlett, I sold in January of 2007. We were in a house which was too small and had a bunch of debt from starting a business. So, I found this rental place we're still in, and sold.

    I'm glad I did, I sold before everything started to fall apart in the housing market and cleared all of my debt in an hour after completion

    I was worried about coming off the ladder too and I had no clue how rented would be, but I've found that being debt free gave me choices I didn't have before. We can stay here, probably till I'm old and grey if we like, we can save up a deposit (which we have been doing) and we can choose when and where to buy again. We might leave the country, we might not, but we have the freedom to make those decisions much more easily now.


    "Everyone is a genius. But if you judge a fish on its ability to climb a tree, it will live its whole life believing that it is stupid" - Albert Einstein
  • Scarlett1212
    Ho Toto,
    I am starting to think of renting for a while as being quite liberating, I have had a mortgage for 9 years and as I have an 11 year old son I think I acted too old for my age for most of my twenties - and then went a bit mad the last few years getting into this massive debt. It will be good to sit back and take stock for a while.

    Hi Tixy, I've thought about fees - I reckon around 4k, my debt/mortgage is going down over 1k a month and I don't expect to sell for at least 4 months so this should be okay, also I'm basing my equity on the market going down a further 5% by the time I sell so hopefully it will work out - but I will have to wait and see - the best laid plans and all that.....

    I have looked at rental properties in the area and we can get a semi-detached for about the same as our mortgage when it was 5% apr - so higher than our mortgage at the moment but only while rates are so low - and that won't last forever.

    Anyway, OH and I have sat writing a list of small jobs that need done around the flat and we are going to get stuck into them at the weekend - hopefully by this time in a fortnight our flat will be on the market - god that gives me tingles just thinking about it - wish me luck, I might need it!
    • chevalier
    • By chevalier 8th May 09, 6:26 AM
    • 7,761 Posts
    • 18,056 Thanks
    chevalier
    if the thought of selling gives you the tingles, then it is the right decision.
    but when you do move, make sure that once you have settled into your new place, that you do a proper budget that includes putting money away for yearly expenses like insurance, birthdays, xmas etc.That way you shouldn't have to fall back on credit cards cos the money will be there.

    good luck
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
  • Broken hearted
    No the likelyhood of you ever buying again is slim
    Barclaycard 3800

    Nothing to do but hibernate till spring






    • stapeley
    • By stapeley 8th May 09, 9:05 AM
    • 2,308 Posts
    • 771 Thanks
    stapeley
    No the likelyhood of you ever buying again is slim
    Originally posted by Broken hearted
    There speaks the words of wisdom ! not !
    • Toto
    • By Toto 8th May 09, 9:39 AM
    • 6,446 Posts
    • 10,902 Thanks
    Toto
    No the likelyhood of you ever buying again is slim
    Originally posted by Broken hearted
    With respect BH I think that's nonsense. Before we sold we were on an interest only mortgage, and with the debts we were paying over 2000 a month in interest alone. That money now goes into savings each month.

    We are far more secure now than we have been in years. We will buy again, but we have the choice of when, we can buy quickly, we have nothing to sell so if the right house came along we are in a good position. With property prices still falling and our savings growing we will have a smaller mortgage than we had before, and that will be for a larger house in a nicer area.

    Obviously selling isn't right for everyone and personal circumstances need to be taken into consideration.


    "Everyone is a genius. But if you judge a fish on its ability to climb a tree, it will live its whole life believing that it is stupid" - Albert Einstein
  • sandalwood
    Reading the posts on this I would definetly sell and clear debts.Being on the housing market isnt the b all and end all anyway-it used to be "gotta get on the market now otherwise I never will" and there was a certain stigma against people renting,but now the way things are it is common place to rent,it is in some cases cheaper and also a lot less stress-If I could sell my place and pay all my debts I would do it like a shot,but unfortunatly I am sitting in negative equity,just about to start a DMP and have a baby due in august which will mean that I have to move(I an only have a 1 bed) maybe 6-12 months after that,which would mean renting my place out and renting a bigger house to accomadate the baby,but,I am trying to be posative and I know in a 2,3 or maybe 4 years,the housing market will pick up and then I will be able to get rid of the old place and maybe buy another or just keep on renting
    as it gives you the freedom to do what you want,may even move abroad......
  • debtdesperado
    I would sell too. Plus in this market you'll probably be able to get a really lovely rental property and get on with your life, rather than spending - realistically - 4 or 5 years living very frugally to pay the debt off.

    But before you do, have a long hard think about WHY you built up this debt... if there are one or two crazy things that made up the debt (eg you paid for a wedding, bought a flash car and had an amazing holiday, or perhaps you tried to start up a business which failed) then you know you made a mistake and overstretched yourself. Lesson learnt.

    But if you can't pin the debt to anything in particular, and it has just built up gradually because each month you overspent a little bit, I would go through the process of working out a budget and living frugally starting right now until the sale. Unless you get your spending sorted and can stick to living in your means, you will run the debt up again, and that would be a real waste.
    • stapeley
    • By stapeley 8th May 09, 12:44 PM
    • 2,308 Posts
    • 771 Thanks
    stapeley
    Out numbered again BH !
  • Scarlett1212
    Thanks chev, I'm actually thinking about getting rid of all credit cards, I'm lucky that my mum is always on hand for a small loan if we are ever short (which we shouldn't be - I am really getting into this budgeting lark and will be piggybanking for car insurance, birthdays/christmas/mot etc), Credit cards are the devil's work!

    Hi Toto, once again thanks and I hope things work out half as good for me as they have done for you.

    Broken-hearted, whether we get back on the ladder or not is purely up to us, I am a little underwhelmed by the whole owning experience at the moment and as I am only 31 with good earning potential and OH is on a fast track management course in his work I think that we could easily buy in the future.

    Hi Jaybag, I do feel fortunate that we have enough equity to clear our debts, I know there are many people who are in the same position as you and it must be hard, however you are right to feel positive about the future, when my son was born I was the happiest I ever have been in my life and he was born into a (really) dingy council flat where I could only afford to carpet the 2 rooms he would be in the most and we had mismatched furniture that had been donated by family/friends. Good luck! - I'm a little bit jealous truth be told.

    Hi debt desperado, the debt was amassed by 3 years of not caring about tomorrow, we had a close and sudden family bereavement and we just stopped thinking about the consequences of overspending (11 holidays - I know it's disgusting). We had no debt before this time, always saved for everything, I remember reading about people in 15-20k debts and wondering how they could have done that - now I know, it's pretty easy when you are in that frame of mind. We have been living really frugally since Christmas and have cleared about 6k of debt already, I do keep thinking that we should suffer as much as possible in order for this to never happen again, but I will take control of the finances and make sure it doesn't. Whats that saying "a mistake is only truly a mistake if you don't learn from it". Well that's the attitude I am trying to have about this.

    Thanks everyone for taking the time to comment - I do appreciate it.
    Last edited by Scarlett1212; 08-05-2009 at 12:56 PM.
  • sandalwood
    Hi scarlett1212

    Thanks for the post,I am so looking forward to the baby coming,it will be hard and I am sure that we will struggle a bit,but if life was easy it would be boring,as I keep telling my misses,I am sure things will work out and we will be able to look back on this stage of our lives as a very tough(but happy) time and be over the worst of the debt problems and be back on track-I am looking at around 4 years of graft,then things will be good.
    Good luck with whatever choice you make
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