To sell and clear debt or stay put

B

brightside

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I would really appreciate some advice as i am climbing the walls with worry.

Myself and husband have decided to sell our town house and make a small profit in order to have enough of a deposit to apply for a new build on my husbands site in a couple of years. We have already received some interest in the property. Now brace yourselves,
I got into serious debt when younger and im still paying it off. When i say serious, Im still paying debt. I have a loan of 30k outstanding and apart from that my husband has a car loan that will be cleared next year.

My sister has a vacant house that shes willing to rent to us for a small amount of rent as she is over seas. Happy days, so we thought.
Just when we decided to sell and move into my sisters house,my dad through a spanner on the works and asked me for a serious amount of money back that he lent me some years ago to clear bad debt. Im talking 65,000. I know, I'm fit to puke!!!

So clearly when its all added up, we have a debt of 95,000.

My husband and i are quite stressed. He suggests we stay put. The only pro to this is that we would keep our house, the negative is saying goodbye to our big dream and we still wouldnt be in anyway better of a financial situation. We wouldnt have any money to even begin to pay my father back and im still chipping away at my 30k loan.

however, i think, if we sell, we can then pay my dad a small lumpsum. I would still owe him money but could offer to pay 10,000 a year thereafter ?
We would rent my sisters house for less than our current mortgage repayments allowing us to pay more money off 30k loan. We have a site we could sell in order to produce deposit for next mortgage but we dont want to sell being honest.

I just have no idea which is better thing to do.

Any advice welcome x
 
In reality you owed €95,000 before you decided to sell, did you assume that your father would forgive the debt? And so had not included it in your thoughts.

You need to outline how much you owe on your house, how much it's worth, the rate of interest, your repayments, the rent, the potential rental costs and the cost and value of the new build.

Also your nett monthly income.
 
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I forgot to mention that originally my dad made a verbal agreement that I would look after my mother if anything was to ever happen him. I had agreed also to pay him back out of house sale but this was in the good times. We will be lucky to make €35000/40000 by selling.
I was thinking of paying him as much of this as possible in one lump sum and then making arrangement to pay him so much a year then.
 
Brightside.

Dreams are just that, Dreams.

1. You got into serious debt ; you have k30 to repay . That is a lot of repaying .
2. You owe your father k65; that too is a lot of repaying.
3. Sell town house for deposit on a new build.? What makes you think anyone will give you the rest of the money to build?
Even if you get funds and start ,will you not end up spending more and more on your {dream}?

Methinks you are (from the limited information) rewinding yourself into a bigger hole.

Suggest stay put and work on the debts you have,

Sorry if this sounds harsh .
 
Thanks Gerry.
It's not harsh, its the reality and I'm only here to find advice and not to be made feel worse for being in this situation.

The bank have told us we would be eligible for new mortgage if we sell curent property and clear ny hasbanda car loan. In the meantime I will continue to repay my 30k loan.
See, they don't know of the 65k debt, as this was a personal loan between me and my father. I used it to clear debts at the time. My father had made it clear that when the house was sold I could repay him, but this arrangement was made just before the recession and my house has never been worth the same. He has asked me foe the money back but knows I need to figure it all out yet. Hubby and I dont want to have a loose round our necks for life, yet it has to be paid. By staying put, we have no extra income and I could only manage to pay back my dad 10,000 a year, by saving it up. By selling the house, we get to give my dad a big lump sum and then while renting pay more of his debt and then start over applying for mortgage. We aren't doing this for show, we are doing it because its the only option we see. We contemplated selling my father the house minus the price of the debt (as he is a very wealthy business man) but then we would be in negative equity for a house we don't own anymore.
 
Personal question I know, so don't feel obliged to answer it if you'd rather not.

Why is your Dad looking for a lump sum repayment all of a sudden if he does not require it (you've said it came out of the blue and you say he is a wealthy business man)

Would a repayment plan with your father not be the saner course? Hiding such a sizeable loan from the bank that is giving you the mortgage might be viewed negatively if it came to light. But worse still, you would still have a lot of money to repay and will be hard-pressed to repay it.
 
Re-reading, given you had agreed with your Dad to replay the €65k loan on sale of the house it doesn't seem like such an unreasonable or unexpected spanner. Had you overlooked it in your original calculations?
 
He said he had been meaning to say it for a long time. He wants to build extension onto house. I cant question his finances, he is living a good life but its still his money. I didn't over look it, part of me presumed he might wipe some of the debt against a site but I don't think that's an option. I approached him in 2013 explaining I wasn't in a position to pay him back as house prices were so bad. He told me no to worry about it, so I just planned to wait for market to lift, give him 30/40k and pay him so much yearly there after.
 
Brightside.

I am not being suspicious but,

Be very wary of a Bank that says you will be {eligible} for funds once husbands car loan is repaid.
What I suspect will happen is that when the Bank have their troublesome car loan repaid , you will not get further finance .
Think about it , they will be delighted to have loan cleared etc.

Get Bank (promises) in writing.
 
Thanks Gerry. On meeting with bank they did input our finances (minus 65k they dont know about) and advised we are doing everything right and keep chipping away at car loan. I will be going in again shortly to have a check run on our credit history also. Girl in bank said she would do this over the phone. We are both 37 so I'm hoping we will still be eligible even if we wait another year or two to apply.
 
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