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  • FIRST POST
    • mycallsevern
    • By mycallsevern 13th Mar 17, 5:20 PM
    • 8Posts
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    mycallsevern
    Is a mortgage possible?
    • #1
    • 13th Mar 17, 5:20 PM
    Is a mortgage possible? 13th Mar 17 at 5:20 PM
    Hi all,

    My wife and I are council tenants with right to buy on my council flat. We are hoping to buy it but are currently on a debt management scheme to pay off about £30k of credit cards and loans. This means we have a load of defaults on our file.

    The flat is worth roughly £250k and we qualify for the full £100k discount. So we would be looking to mortgage £180k (70%) to consolidate the debt in to the mortgage.

    Our combined income is £70k per annum. Our current rent and debt payments combined total £1000 per month so we would be able to afford the mortgage repayments. What I really want to know is, is there any chance of us getting a mortgage like this?

    Thanks in advance for any help and guidance.

    Mike
Page 1
    • glentoran99
    • By glentoran99 13th Mar 17, 5:23 PM
    • 4,583 Posts
    • 3,579 Thanks
    glentoran99
    • #2
    • 13th Mar 17, 5:23 PM
    • #2
    • 13th Mar 17, 5:23 PM
    I cant see you getting a mortgage until you are finished the DMP, but others may be able to advise better
    • xyz123
    • By xyz123 13th Mar 17, 7:11 PM
    • 1,492 Posts
    • 368 Thanks
    xyz123
    • #3
    • 13th Mar 17, 7:11 PM
    • #3
    • 13th Mar 17, 7:11 PM
    If u earn 70,000 with main outgoing onky £1000 why not spend a year or two clearing huge debt you have got.....
    • mycallsevern
    • By mycallsevern 13th Mar 17, 7:19 PM
    • 8 Posts
    • 0 Thanks
    mycallsevern
    • #4
    • 13th Mar 17, 7:19 PM
    • #4
    • 13th Mar 17, 7:19 PM
    This is what we are currently doing, but we were hoping to fast track the process by consolidating the debt on to the mortgage. We have two kids but the flat is only a 1.5 bedroom so it is getting rather tight as they get older.
    • glosoli
    • By glosoli 13th Mar 17, 8:10 PM
    • 633 Posts
    • 366 Thanks
    glosoli
    • #5
    • 13th Mar 17, 8:10 PM
    • #5
    • 13th Mar 17, 8:10 PM
    I am not sure if you will be able to release funds during the purchase process, a subsequent additional borrowing application perhaps, but the only instance were i've known additional borrowing to be permitted during a council right to buy application is for home improvements, and even at that, only when they increase the value of the home by the same amount as the additional borrowing funds (i.e difficult).
    • glentoran99
    • By glentoran99 13th Mar 17, 9:23 PM
    • 4,583 Posts
    • 3,579 Thanks
    glentoran99
    • #6
    • 13th Mar 17, 9:23 PM
    • #6
    • 13th Mar 17, 9:23 PM
    This is what we are currently doing, but we were hoping to fast track the process by consolidating the debt on to the mortgage. We have two kids but the flat is only a 1.5 bedroom so it is getting rather tight as they get older.
    Originally posted by mycallsevern
    So why would you be wanting to buy it? if its too small? If you sold in a few years you would have to repay the discount
    • mycallsevern
    • By mycallsevern 13th Mar 17, 9:49 PM
    • 8 Posts
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    mycallsevern
    • #7
    • 13th Mar 17, 9:49 PM
    • #7
    • 13th Mar 17, 9:49 PM
    The flat is in a very desirable area of London on a very nice street, once we purchased it we would move to a cheaper area (probably outside of London) and rent a larger property to live in. The rental value of the flat is high so would cover the mortgage payments. After 5 years we do not have to repay ant of the discount so could either sell or remortgage to release equity to purchase a property to live in, (possibly abroad) keeping the London flat as an investment.

    The other option would be to change the interior layout of the flat to increase the number of bedrooms. At current the living areas are large and there is a lot of wasted space in the hallway area. Obviously we could only do this if we owned the flat.
    • xyz123
    • By xyz123 14th Mar 17, 8:08 AM
    • 1,492 Posts
    • 368 Thanks
    xyz123
    • #8
    • 14th Mar 17, 8:08 AM
    • #8
    • 14th Mar 17, 8:08 AM
    The flat is in a very desirable area of London on a very nice street, once we purchased it we would move to a cheaper area (probably outside of London) and rent a larger property to live in. The rental value of the flat is high so would cover the mortgage payments. After 5 years we do not have to repay ant of the discount so could either sell or remortgage to release equity to purchase a property to live in, (possibly abroad) keeping the London flat as an investment.

    The other option would be to change the interior layout of the flat to increase the number of bedrooms. At current the living areas are large and there is a lot of wasted space in the hallway area. Obviously we could only do this if we owned the flat.
    Originally posted by mycallsevern
    I am not an expert on if it's possible but I am sure you know, you can't just let a flat out on residential mortgage. U will need landers permission which will most likely mean converting to buy to let mortgages. Not sure how that will fit in with the discount... I think u r making an already difficult mortgage application even more difficult....
    • hoops77
    • By hoops77 14th Mar 17, 8:56 AM
    • 58 Posts
    • 13 Thanks
    hoops77
    • #9
    • 14th Mar 17, 8:56 AM
    • #9
    • 14th Mar 17, 8:56 AM
    I secured a mortgage with 3 defaults with a high street lender, so it can be done
    • kingstreet
    • By kingstreet 14th Mar 17, 10:46 AM
    • 31,932 Posts
    • 17,064 Thanks
    kingstreet
    we were hoping to fast track the process by consolidating the debt on to the mortgage
    Originally posted by mycallsevern
    You cannot do this.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • glentoran99
    • By glentoran99 14th Mar 17, 11:47 AM
    • 4,583 Posts
    • 3,579 Thanks
    glentoran99
    I secured a mortgage with 3 defaults with a high street lender, so it can be done
    Originally posted by hoops77
    But had you paid them?
    • rtho782
    • By rtho782 14th Mar 17, 1:29 PM
    • 980 Posts
    • 679 Thanks
    rtho782
    The flat is in a very desirable area of London on a very nice street, once we purchased it we would move to a cheaper area (probably outside of London) and rent a larger property to live in. The rental value of the flat is high so would cover the mortgage payments. After 5 years we do not have to repay ant of the discount so could either sell or remortgage to release equity to purchase a property to live in, (possibly abroad) keeping the London flat as an investment.

    The other option would be to change the interior layout of the flat to increase the number of bedrooms. At current the living areas are large and there is a lot of wasted space in the hallway area. Obviously we could only do this if we owned the flat.
    Originally posted by mycallsevern
    You can't buy with RTB then let out. You'd also need consent to let from the lender, and there is no certainty they would do this.

    You won't be able to release the discount as cash when you buy.

    The idea is a non-starter.
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

    Debt Cleared since 01/12/15: £6,000 / £7,500
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