Should we downsize or increase the mortgage to pay off credut cards?

[CheeryCherry]

We are in a mess. Have about £10K debt . No pay increase for 3 years for either of us, but obviously everything going up. We are savvy with the credit cards, pay no interest, but cannot get the debt down. The DCs are not demanding but they obviously have their needs. We will need a newer car in next few months too. We could sell up and move to a smaller house, not so good area. Or could extend the mortgage/get a loan to pay off the debts, and work towards living a debt free budget. DH off with stress/depression so could probably not cope with a move. However it does leave me to try sort it as he is not coping in general. What would you do?

Rockchick and Lucyellen, you both seem to be saying the same thing, not to remortgage. Tomorrow is d-day...we are going through our debts/outgoings and finding out where we stand. We also have 2 estate agents coming tomorrow and Friday to value the house. I feel a bit more positive already now that we are going to confront it all head on. Looking at houses in the area....but bit nervous about getting back into the housing market nightmare! Regarding the car LucyEllen, mine is 14 yrs old, have spent £800 on it this year;£600 last, we know it has other issues which will need sorting, have a bargain mechanic, but with high milage we know it won't last forever. Would only get another 2nd hand runaround anyway, not a big car loan newer model. Thank you all for your help, and,wish me luck with starting to tackle the problem!

Good luck Cheery - if you want any more advice after looking through all the finances, just ask :)

Im not sure how moving will help seeing as it costs so much to do so.

If we bought a house about £60k less than this, had about £10k moving fees, we could hopefully pay off the mortgage. Would still have the credit card debt but that would be all. Imagine no mortgage!! That calculator will be smoking tomorrow! But yes I know, we have to sell up and buy something half decent etc etc....

Best of luck cheery, no mortgage? oh, wow what a dream :)

Fuckadoodle (fab name) do you think you would move to help sort the debt? Or would you rather remortgage/continue paying it all off bit by bit? You are doing well so far thogh

*though!

Thank you Lucyellensmum. Will let you know how tomorrow goes.

Why 10k moving fees?
Why so much?

10 credit card debt?
My dh had that, we managed to get a bank loan instead to pay it off. The interest is a lot lower, and we are paying it off monthly so it is manageable. The problem is when you start using the credit card for your day to day spending?

For moving fees, I was including the solicitor fees, agent fees (to sell ours) surveys, removal van hire. Will look into the loan. And will try stop using credit cards. Thanks.

In your situation I would baton down the hatches and sit tight. Don't spend a penny that you don't have to, make payment arangements with anyone that you owe money to, then pay every single bit off of the cards you can. Do this for 3 months and then see where you are at. MN is great for advice on making your £ go further.... there are loads of threads about it.

Christmas is hard as you want to make it 'great' for the kids, but it wont be 'great' for the kids if you go bankrupt, move to a tiny house or your Dh falls apart at the seems :( Poundland, freecycle & charity shops will hopefully allow you to get a few bits to wrap up for the kids. Kids like spending time as a family - one of the best things you can do with them (depending on their ages) is get them them to make up a new game that you can all play and make the bits you need for it. If they are really little you can wrap up their existing toys & they'll love it. If there's anyone you know will be buying them presents (grandparents etc) work out what they need/would the most & see if the GP's could help with those things. Explain to everyone else that you are on the bones of your bum and you wont be buying presents this year - tell people NOW. Make Christmas about spending family time, not family money.

It is amazing how far you can make £ go when you watch every penny.

Good luck doing that and hopefully not having to borrow more or move!

Notquint. It costs a lot to move. Stamp duty is the killer. All our expenses came to 15 or 16k last time!

Op. Oh i see how it would work now. We had to move a few years ago because we had run out of room. We moved to a cheaper area but still had to increase the mortgage by 40k. To get anything cheaper that was big enough (and we only have an ordinary sized house with youngest in a box room, not a mansion or anything) we would have to move way out of London and then we would have issues with work and commuting time and costs.

If you sold how do you think you would feel about that long term?

In that case it seems absurd to downsize, costing the same amount of your debts, so you will be a lot worse off in the end.

Sit tight, sell as much "crap" as you can on ebay, make things stretch, and see if you can reduce your debts over time.

NotQuint (oh yes you are!) We would have no mortgage if we moved though, so that is an instant forever saving. We would obviously try include paying off the credit card bills at the same time. We would then have to use a strict budget but at least we would have a clean slate....and surely that would be worth its weight in terms of stress and constant anxiety.
We have done the moneysavingexpert planner, have a £750 over spend per month!!! That comes as no surprise but it is good for shocking us into action, have been too long with our heads buried in the mud. Without mortgage/credit card bills it would be much less.
Estate agent coming this afternoon to value so we'll see where that takes us. We are at least grateful we have a get-out option at least.
Better go hoover round before she comes!
Thanks all.

£750 a month with all your bills???

oh, overspend, im a twat then its £750 :( but all is not lost, we were about there before we did the DMP

Anything obvious you could but back on?

CUT back on!

How much do you repay on debts each month and how much is the mortgage? Will getting rid of one or the other of these be enough to get rid of that overspend?

Good point rock.

You could always put up your expenditure and we could see what we think could be reduced?

Mortgage £260 and credit card minimum payments £260 at the moment with no interest....so initially we will prob stick the credit card bill on the mortgage for an start, and get the house on the market, with an aim to buy a cheaper house and pay it all off. Then we'll have to budget budget budget. Cancelling magazines, love film and listing things to sell tonight. It's a start.

So Im guessing you have a low income? Just going on your outgoings which are actually very small but your still having a very large over spend.

Yes low wages, but safe which we are thankful for. Have been scouring the area for suitable cheaper houses....there's only one that would work, would love it, but have to sell this one first. Think we've chosen an estate agent, and luckily a friend works for them. Just been listing all the tarting up we'll need to do...urgh!