please tell me what to do.

(24 Posts)
bluebluecow Fri 04-Oct-13 13:35:16

have 60k approx equity in my home. dh self employed and we are in about 25k debt, on a debt management plan. struggle to pay energy bills but have never missed a mortgage payment. we have a large house and would happily sell and downsize but would need to re-apply for a mortgage and wouldnt get one. so scared of giving up our home but sick of struggling week to week. should we cling on to our house or sell, get out of debt and rent?sad

Can you use your house to maximise your income by renting rooms?

You can get a contractor in who'll stay only Monday to Friday and pay £100 a week if you live in an area with industrial estates?

Or a student/language student?

Sell off part of your garden?

bluebluecow Fri 04-Oct-13 13:39:02

unfortunately we dont have a spare room. we have a large house as in room sizes and garden but no actual spare

Convert a garage and rent it out as an office?

(I'm planning on doing all these things grin)

Divide a room in half?

Convert a dining room to bedroom?

Why are you in a larger house than you need? Kids moved out?

bluebluecow Fri 04-Oct-13 13:40:25

we live in an area where no-one would be interested in buying some of our garden. these are good ideas though and thank you for them.

My friends just sold off a part of her garden for a stable and paddock for 30k - can't be used as building land

MooncupGoddess Fri 04-Oct-13 13:41:07

Could you port your mortgage across to a new house?

Do you budget and ensure that you don't spend money unnecessarily?

bluebluecow Fri 04-Oct-13 13:41:44

the house isnt larger than we need really but it we could fit in a smaller one.

Have you got storage space you could rent out - it's madly expensive where I am to rent storage.

Do you do at home work - could you set up as a childminder for extra cash?

Do you have any convertible outbuildings?

bluebluecow Fri 04-Oct-13 13:44:20

we can port our mortgage rate but would have to reapply. porting the mortgage would be brilliant. we dont spend much money on anything we dont need and always shop around for bargains

MrsOakenshield Fri 04-Oct-13 13:49:58

are you sure you wouldn't get one? I didn't think being in debt was an obstacle, as long as you can prove you are managing that debt, which you are.

It's worth shopping around, and sometimes trying different branches of the same building society - I had one branch refuse me a mortgage for a flat over a cafe, about a year later (and obviously too late as I'd got a mortgage elsewhere) the manager of a different branch told me they would have approved it!

Are you in debt because of living costs that can't be cut?

Meaning that if you moved you would still be spending more than you earn?

bluebluecow Fri 04-Oct-13 13:56:32

we are in debt from years ago. dh had a serious accident and was out of work for a year. we couldnt get much in the way of benefits so used ccards to live on. our energy bills are very high in this house. by selling we could clear all our debt and live somewhere a bit cheaper to run. i would LOVE to be debt free but would so miss my home

Mum2Fergus Fri 04-Oct-13 17:16:48

Could you sell, pay off the debt and rent for a bit til you're back on your feet?

MinimalistMommi Fri 04-Oct-13 18:02:59

Can you cut down on spending radically to pay of debt? Or are you already completely down to the bone? If you scraping by I'm assuming you've already done this. Google frugal queen, she cleared a HUGE amount of debt over two years by drastic measures but she did it, she also couldn't move and was stuck with high mortgage.

On R4 they were talking about debt & mortgages being difficult to get and one man used a broker to get a mortgage based more on affordability because his mobile contract had put a default on his credit record.

So I think you need to look on moneysavingexpert to see if their forums have anything that would help you.

keli5325 Fri 04-Oct-13 20:39:14

if you have been on a DMP for a while could you sell your house and offer a reduced settlement of eg 40p in the £ and then negotiate with creditors.
Alternativley you could seek advice about an IVA you will probably do a 6yr IVA in leiu of any equity you have

NK5BM3 Fri 04-Oct-13 20:47:26

Could you sell and then move into rented? That's what some friends did and after a year or so they bought again. During that time although they were renting for £700 or whatever, they had quite a significant amount in their bank which helped clear debts etcetc. Also allowed them to start a business, continue being on mat leave/work part time... Life style choice.

Took their time to find the next house too and when they did there was no need to sell so they were 'first time buyers' and could bargain better.

Also shop around for mortgage. Our original mortgage bank who we were with for 8 years screwed us.. We walked into another, building soc and they offered the same amount of mortgage for £100 less repayment!!!

Preciousbane Fri 04-Oct-13 21:37:09

How old are you both? Just to get an idea for what kind of length of mortgage you could still get after eating for a year or two.

It is a shame to have to rent but your debt sounds like it is suffocating you so even though you would use up equity on rent, which is a pain it does sound like a way out of this unhappy situation.

Regarding renting a room out how many people in your house currently and how many bedrooms?

webwiz Fri 04-Oct-13 21:54:14

Have you had any proper debt advice? That might throw up some new ways of organising the debts so that it isn't so onerous. Talk to the CAB or StepChange.

Is the debt mangement plan a free one or are you paying fees for it?

Preciousbane Fri 04-Oct-13 22:43:19

Should be renting not eating, I do hate autocorrect.

Can you rent out your house and rent somewhere smaller for cheaper?

It might be a bit complicated to change to a buy to let mortgage etc, but maybe worth looking at.

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