Can I Sell My House to Pay Off Debt?

If you’re worried about your finances, you might be wondering; can I sell my house to pay off debt? In most cases, your home is often your most valuable asset, so selling it can be an effective way of paying off debts. But this isn’t a decision that should be rushed and there are lots of things to consider before putting it on the market. In this blog we’ll look at the different ways you can deal with your debt and if selling your house is the right option for you. 

Addressing your debt 

Selling your house to clear debt is a big step, so even if it feels like the best thing to do it’s worth taking a moment to explore other options. If your debts are becoming unmanageable there are several ways you can try to bring them under control before you sell your home. 

Debt charities are a great place to start, since they will offer you free advice and support. To begin with, they’ll help you work out all your outgoings and incomings and create a budget that’ll bring your spending under control. If your outgoings can’t be brought down they can help you arrange a debt management plan (DMP). This will help reduce the amount you are repaying to your creditors too.

As your mortgage is a secure debt, debt charities will try to clear your other debts first so you can make your mortgage repayments and keep your home. If you are finding it hard to pay your mortgage, or you’re in mortgage arrears, your lender may be able to help by giving you a mortgage holiday or switching you to an interest-only mortgage. They could also add your arrears to the mortgage as payment. These solutions are ideal if your financial problems are temporary and your debt can be paid off.

If your debts are more severe, a charity can help you set up an individual voluntary agreement (IVA). This is a form of insolvency that means you can keep your home while paying creditors an agreed amount you can afford. If you can no longer pay your debts at all, you will have to declare bankruptcy, and you will be forced to pay off your debts by selling your house.

Should I sell my house to pay off debt?

Perhaps none of the above options are right for you, or maybe you’re just keen to sell? Either way, take time to consider these questions before moving ahead with the selling process:

• Do you have somewhere else to live if you choose to sell your house?
• Could you let your property out and rent a cheaper home elsewhere to pay off your debt? This may help if you are behind on mortgage repayments.
• Do you have a poor credit rating? It may be hard to get back on the housing ladder and could prevent you from getting a mortgage on a new property.
• How much equity is in your home? Is there enough value in the property to cover your debts or would an IVA be a better option?
• Is your home in negative equity? This means it is worth less than the mortgage you have on it. You will owe your lender the difference if you sell, so it might be worth staying if you can.
• Have you factored in all the costs of selling your home and buying a new one such as solicitor’s fees, estate agent’s fees, stamp duty and removal costs?

Selling to clear debt

Sometimes, selling a home is the best way to pay your debts and bring you some peace of mind. You may have enough equity in your property to pay off what you owe with some leftovers to start afresh, in which case selling is the best option. Similarly, you might be struggling with large mortgage payments, so stopping them, selling up and moving somewhere more affordable will help keep you on top of your finances. If your circumstances have changed (perhaps your income has reduced) you might want to consider selling your home and downsizing to make your outgoings more manageable.

Alternatively, selling your property could be a way to avoid more drastic measures. If your home is in danger of repossession it is often better to sell it than hand it back to your mortgage provider. If your property is handed back to your mortgage provider, any equity you had in it will be reduced as they will look to recover the money they have lent. If you are considering bankruptcy, you’ll most likely be forced to sell your home as part of the process, and bankruptcy will remain on your credit file for six years, making it much harder to borrow money in the future. 

Work with SellHouseFast.co.uk

If you’ve decided to sell to pay off your debts, you’ll want to do this quickly. Putting your home on the open market with a traditional or online estate agent is likely to achieve the best price, but it certainly isn’t the fastest. This is why many people choose to work with us.

At SellHouseFast.co.uk, we understand that life’s circumstances can change suddenly, making a quick house sale essential. Whether you’re dealing with financial difficulties, facing the threat of repossession or need to sell fast to snap up the home of your dreams, we’ve got your back.

We’re here to offer a solution that’s both quick and straightforward. Our service enables you to sell your house ‘as is’ for cash, giving you the freedom to move forward with certainty and peace of mind. With a process that’s clear and transparent, and the ability to complete sales as fast as you require, you can trust us to handle your sale efficiently and professionally.

Plus, at SellHouseFast.co.uk, we buy any property in any condition, ensuring a swift sale so you can move on with peace of mind. And as we buy homes for cash, you won’t have to fret about financing falling through or deal with drawn-out negotiations. Get in contact with us today to find out how we can help.