We're loosing our home - what will I need?

[esavian]

Reached the end of the line and we are putting our house up for auction today and defaulting on our mortgage on Friday (with permission from the lenders).

Not looking for advice on how to save the house, we've tried everything and now we just need to make the best of it.

Auction process is six weeks and I have downsized our possessions by over half and will get everything in boxes well before move day.

I think the purchasers have 30 days to complete on the house - does anyone know how this works?

Should we move into rented after it has sold? My friend can lend us the deposit and rent the til the house sale money comes through.

What else do I need to know? We have three children and one disabled child who are very stressed right now about moving. What can I do to help them and make it a positive thing?

Any advice to help me keep from getting emotional? I'm not sad to leave the house it needs work and the area has a higher than average number of addicts, although we have been happy here.

The only way this makes sense is if the earlier thread indicates the house is an unsellable money pit (which is sort of hinted at here, "needs work").

Hi op

Sorry this is happening. This happened to my parents when I was a child and although it was sad.. it's has made me very careful with money as an adult, I worked very hard for my first flat at a young age to allow myself to be financially secure.. the same goes for my siblings.

It all worked put in the end for my family and it will do for you too x

Rent is usually higher than a mortgage, so I’m assuming you need to free up the equity just to live on it? So none put aside as a future deposit on a house? It is the case that you’ll need this equity to supplement your DHs new income to rent?

To clear up some confusion:

Dh hasn't been a high earner until last month.

We have never defaulted on any payment including mortgage.

We are in huge amounts of debt (not through excessive spending/fecklessness). Every month we may huge debt repayments. Our car broke and needed £400 spending on it last month for example. No savings. Hence the cycle of debt.

We haven't defaulted this month - my friend lent me money.

DH has to pay his own expenses for work and claim them back. Three days ago he needed £500 to pay for flights, hotel and taxis. He has accept a 1 year contract with an American company who are punishing in their expectations. He left his secure job of 12 years to try and earn more so we didn't loose our home.

I appreciate people like to understand someone's circumstances but we are loosing our home, the detail is only relevant to dh and I. We are not feckless, we are both fairly intelligent hard working, nice people who have landed in a shot situation.

The emotional support is really helping but I don't have the energy to keep explaining. I am a very long term poster who flounced and deregistered a couple of months ago and have rejoined for support.

And no, we currently can't find a rental.

I don't see what's so hard to understand that we have equity in our house we can't access unless we sell?

Or that it has taken six months to sell and dropped in value by £25k in that time?

Honestly, I wonder at some of you finding the my life, my situation, my kids lives, makes no sense to you. Did it need to? I wanted encouragement and advice about what to pack, perhaps temporary housing ideas, how to cope emotionally and how to help my lovely children.

I am deregistering again. I was foolish to open myself up to people I don't know and who can't understand.

Thank you to those who have shown genuine compassion and understanding.

Bye.

Sorry OP. but you introduced "default" in the opening post, and since then some of us have been pointing out that you're not apparently in default. If a property doesn't sell in six months it's unlikely it's lost £25k in value, it's more likely it was £30k over-priced six months ago.

What we've been pointing out is that if everything you've said is true then the path you've chosen is very odd. A 3-6 month agreed payment holiday with the lender would allow you to accumulate a cash reserve to clear small debts and give a buffer for future needs. And not leave you homeless.

@DogInATent I suspect the equity release is the big driver here as the other debts are significant.

Have you been to your local citizens advice bureau and spoken to one of their debt advisors?

@Nubnamechange which is understandable, but OP seems to be very very badly advised or terribly lacking in understanding of how this is going to affect their next steps.

Defaulting on the mortgage would have ruined their credit rating. That would prohibit any more mortgages for a very long time and seriously affect their chances of renting a home after this house sale.

They've now miraculously borrowed the mortgage money from a seriously good friend so they aren't behind on payments this month.

They don't have a plan for moving into a rental property as a family with children with extra needs, plus dogs in tow. The rental market is insane. The chances of an easy transition into a rental are slim to none. Where do they want to live? Will the children have to change schools if they can't live locally? How about jobs? What will they do if they can't find a rental property? They will have equity in the bank, so won't be eligible for a council house.

If OP wants to go into a shared ownership scheme, the husband's new high earnings will likely prohibit this if he's earning over I think £80k per year.

They literally don't know the process of an auction sale and when they'll have to be out by. That's insane with kids in tow, especially with nothing lined up to go to instead.

Selling this house is not likely to be the panacea they think it is in the current climate. I really hope they are able to get proper support and advice on this as without the full facts here (which is unrealistic to expect / demand of course on a forum), OP isn't going to get the right information from any of us.

Can you apply for social housing. Most applications are points based and (without meaning to sound rude) with a child with a disability you would achieve maximum points.

Most councils have a 'homeless help' department which would then push up your application.

If you contact your nearest Citizens Advice office then they will be able to help you with this.

Is there no hope of you remortgaging to release some equity? Obviously this would increase your mortgage payments but might it release enough to pay off your debts? You could then think about whether or not you still want to downsize without the shadow of debt hanging over you?

Sorry you're having such a shitty time. It does read as though you may be rushing into the wrong choice though. Auctioning will get you the worst price.

@SilverHairedCat Oh I know I’m totally with you. I think there’s more that’s not being said about the urgency of the other debts.

Our house went up £20k in the few months between August and February. How have you lost 25k on the value?

@esavian

To clear up some confusion:

Dh hasn't been a high earner until last month.

We have never defaulted on any payment including mortgage.

We are in huge amounts of debt (not through excessive spending/fecklessness). Every month we may huge debt repayments. Our car broke and needed £400 spending on it last month for example. No savings. Hence the cycle of debt.

We haven't defaulted this month - my friend lent me money.

DH has to pay his own expenses for work and claim them back. Three days ago he needed £500 to pay for flights, hotel and taxis. He has accept a 1 year contract with an American company who are punishing in their expectations. He left his secure job of 12 years to try and earn more so we didn't loose our home.

I appreciate people like to understand someone's circumstances but we are loosing our home, the detail is only relevant to dh and I. We are not feckless, we are both fairly intelligent hard working, nice people who have landed in a shot situation.

The emotional support is really helping but I don't have the energy to keep explaining. I am a very long term poster who flounced and deregistered a couple of months ago and have rejoined for support.

He is a high earner now - so plans and agreements to pay up can be made

You havent defaulted yet, so thats not a danger - you could ask for a holiday

You are in debt - again get some advice from somewhere like Step Change

Did he use a credit card?

@Nubnamechange
Yes, that may be the case. But is debt-free and homeless ever the preferred solution?

No advice on your specific situation but as far as moving goes, we moved house just over a year ago with 2 toddlers. Obviously I wanted them as settled as possible so once we were a few weeks off from completion we showed the DC our new house and told them where their rooms would be and talked up all the good things and also talked about all the things that would remain the same (same nursery, activities etc).
When it came to actually moving, we did it ourselves over a weekend. The first day we took everything we didn't need that night from every room except the DC rooms. Our bed, clothes, most bathroom bits, most kitchen stuff, everything from the garden/garage/loft. Then when the DC came home that night after a day with grandparents, we still had a table and chairs to eat at, sofa and TV, and their rooms were untouched.
The next day, they went back to grandparents and we moved the last bits. First job was setting their rooms back up, almost exactly as they were in the old house and curtains went up etc. Then we sorted out their toys and things downstairs. We basically lived in boxes for a while because we sorted the kids first. They settled amazingly well, routine was all kept the same and they just got on with it with no issues, I think because they were comfortable that their surroundings were the same. It helped that their rooms were white painted walls in the old house and the same in the new house so nothing hard to recreate in either house.

OP, I don’t think anyone thinks you’re feckless, your summary just didn’t add up. With further detail it makes more sense, so you will be able to get more appropriate advice.

Depending on the value of your home, dropping the price by 25k is not that much. If it’s not selling at that price you need to drop it further whether you go the EA or auction route.

You should cost out the options of priced-to-sell via EA vs realistic auction reserve price, because your fees at auction will be higher and it may not sell.

In your situation you should have a list of rental options ready. Personally I would ask for a break clause and aim to spend as little time renting as you can, and look to pay cash for no chain properties to get the purchase through ASAP, to avoid losing ££ on rent and rising house prices.

If the EAs advised you to drop the price by 25k as it hadn’t sold, that doesn’t mean the value has dropped.