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  • FIRST POST
    • Bromis
    • By Bromis 10th Oct 17, 2:01 PM
    • 5Posts
    • 0Thanks
    Bromis
    Too worried to even attempt buying
    • #1
    • 10th Oct 17, 2:01 PM
    Too worried to even attempt buying 10th Oct 17 at 2:01 PM
    Previously owned two houses. Bought first house in 2005 when everything seemed to be so much easier! Moved into a bigger "forever home" in 2012 - split up a year later and I moved into a rented apartment, no equity in property so ex kept it and I signed over the deeds.

    So now a few years on, I'm saddled with old debt and newer debt I've acquired from being on maternity leave etc. My husband has never owned a house and we're just about to move into our 4th rental property in 4 years and to be honest it's absolutely soul-destroying. Our last house was supposed to be long term, 12 months later they decided to sell! The charm of renting is wearing thin now so I think its time we focus on buying. The problem is, I'm so worried we wouldn't get a mortgage I can't even bring myself to try. I know our debt would be frowned upon by most lenders. I've done an SOA, although its asked for minimum payments on it and we always pay more. We are really chipping away through the debt as quickly as we can and we've probably paid £8k off in the last 12 months (so it was worse!) I would appreciate some guidance on how we could make ourselves sail through the mortgage process (if that's possible these days!)

    We would probably look to buy a house in the next 12-16 months. We may be able to get a 10% deposit together, my parents have offered to help us. The house would be around £110k.

    Statement of Affairs & Personal Balance Sheet

    Summary

    Number of adults in household 2
    Number of children in household 2
    Number of cars owned 2

    Income, Expense, Debt & Asset Details

    Income Amount(£)
    Monthly income after tax 2100
    Partners monthly income 1700
    Benefits 134
    Other income 50 (my ex's generous maintenance payment for our son)
    Total monthly income 3984

    Expenses Amount(£)
    Mortgage 0
    Secured/HP loan payments 431
    Rent 525
    Management charge (leasehold property) 0
    Council tax 123
    Electricity 35
    Gas 41
    Oil 0
    Water Rates 34
    Telephone (land line) 0 (included with internet, dont use landline)
    Mobile phone 60 (two)
    TV Licence 12.34
    Satellite/Cable TV 8.99 (netflix)
    Internet services 26.5
    Groceries etc. 300 (nappies etc included)
    Clothing 50
    Petrol/diesel 150 (both, we have very short commutes)
    Road tax 28 (both)
    Car Insurance 50 (both)
    Car maintenance (including MOT) 0 (cars are 1 year old)
    Car Parking 0
    Other travel 0
    Childcare/nursery 250
    Other child related expenses 0
    Medical (prescriptions, dentists, opticians etc.) 0 (Wales - free prescriptions)
    Pet Insurance/Vet bills 0
    Buildings Insurance 0
    Contents Insurance 6
    Life Assurance 0
    Other Insurance 0
    Presents (birthday, christmas etc.) 20
    Haircuts 10 (Genuinely cut my hair once a year, boys every 4 weeks)
    Entertainment 100 This varies but this covers our gym memberships, spotify etc
    Holiday 0 (We've just been on holiday won't be going again for a long time)
    Emergency Fund (dont tend to save due to renting but have money leftover every month anyway)
    Total monthly expenses 2260.83
    Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
    Mortgage 0 (0) 0
    PCP My car 15000 (261) 6
    PCP husbands car 8000 (170) 3
    Secured & HP Debt totals 23000 - -
    Unsecured Debt Description Debt(£) Monthly(£) APR(%)
    Lloyds Tsb 8500 110 0
    Barclaycard 320 9 0
    Tesco 1000 25 0
    HSBC 6000 380 3.5
    Unsecured Debt totals 15820 524 -
    Asset Description Value (£)
    Cash 0
    House Value (Gross) 0
    Shares and bonds 0
    Car(s) 0
    Other assets (e.g. endowments, jewellery etc) 2000
    Total Assets 2000


    Monthly Budget Summary Amount(£)
    Total monthly income 3,984
    Monthly expenses (incl. HP & secured loans) 2,260.83
    Available for debt repayments 1,723.17
    UNsecured debt repayments 524
    Amount left after debt repayments 1,199.17 (some of this goes to debt repayment, the rest goes on day to day living, I will try and save some when I can)

    Personal Balance Sheet Summary Amount(£)
    Total Assets (things you own) 2,000 (art work/jewellery etc)
    Total Secured & HP Debt -23,000
    Total Unsecured Debt -15,820
    Net Assets -36,820

    I'm sorry if this is a bit of a mess. I appreciate your comments/criticism. I just noticed my £1800 overdraft isn't on there, I know that's a big no-no. My pay clears it every month but then I re-use it.

    Thanks
Page 1
    • Time2go
    • By Time2go 10th Oct 17, 2:53 PM
    • 150 Posts
    • 28 Thanks
    Time2go
    • #2
    • 10th Oct 17, 2:53 PM
    • #2
    • 10th Oct 17, 2:53 PM
    I'm sure one of the mortgage guys will be on here soon but plug your details into one of the mortgage affordiability calculator and see what it comes out with. Have you any ccj default missed payments ?
    • Bromis
    • By Bromis 10th Oct 17, 3:28 PM
    • 5 Posts
    • 0 Thanks
    Bromis
    • #3
    • 10th Oct 17, 3:28 PM
    • #3
    • 10th Oct 17, 3:28 PM
    Thanks Time2go, no never had any misspayments/defaults/CCJs. Both of our credit reports look good.
    • Filo25
    • By Filo25 10th Oct 17, 3:43 PM
    • 1,044 Posts
    • 1,621 Thanks
    Filo25
    • #4
    • 10th Oct 17, 3:43 PM
    • #4
    • 10th Oct 17, 3:43 PM
    Just to echo Time2Go, its worth having a play around with some numbers in the publicly available affordability calculators, to give you an idea how much you could borrow with various debt levels and mixes of types of debt.

    Having debt in itself isn't necessarily a barrier to getting a mortgage, it will obviously squeeze your affordability calculation however, and be reflected in the bank being willing to lend lower amounts, so you may not actually need to pay off all debt before getting a mortgage for the amount you need.

    Of course ignoring what the lender is wiling to do, you may want to pay of all the debt before moving anyway, as moving is expensive anyway, and not having debt gives you a bit more financial resilience to deal with it.

    That said, we did get a mortgage last year for a significant amount while still having a pretty sizable amount of debt.
    • Firsttimebuyers
    • By Firsttimebuyers 10th Oct 17, 3:45 PM
    • 24 Posts
    • 0 Thanks
    Firsttimebuyers
    • #5
    • 10th Oct 17, 3:45 PM
    • #5
    • 10th Oct 17, 3:45 PM
    Following with interest as we're in a similar position.


    Affordability calculators knock the amount they'd owe us down, but still enough for what we want to buy - but have heard that the Debt:Income Ratio will cause us to be declined.
    • Pixie5740
    • By Pixie5740 10th Oct 17, 4:08 PM
    • 11,010 Posts
    • 15,186 Thanks
    Pixie5740
    • #6
    • 10th Oct 17, 4:08 PM
    • #6
    • 10th Oct 17, 4:08 PM
    You don’t need one of the “mortgage guys” to plug the details into an online calculator. Just about every mortgage lender has an easily accessible online calculator so rather than worry why not plug the numbers in yourself? You might be pleasantly surprised.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • ACG
    • By ACG 10th Oct 17, 4:22 PM
    • 15,510 Posts
    • 7,858 Thanks
    ACG
    • #7
    • 10th Oct 17, 4:22 PM
    • #7
    • 10th Oct 17, 4:22 PM
    There is a little too much information there for me to say yes or no but assuming it passes affordability in the main you should be fine.

    Some lenders have a debt to income calculation that does not always get taken into account on the affordability calculators so you should be wary of that, but in the main having debt in itself is not a problem.

    Speak to a broker if you are in any doubt and they can guide you to the most likely lenders to accept you based on your individual circumstances.
    I am a Mortgage Adviser
    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.
    • YHM
    • By YHM 10th Oct 17, 4:25 PM
    • 127 Posts
    • 44 Thanks
    YHM
    • #8
    • 10th Oct 17, 4:25 PM
    • #8
    • 10th Oct 17, 4:25 PM
    You don’t need one of the “mortgage guys” to plug the details into an online calculator. Just about every mortgage lender has an easily accessible online calculator so rather than worry why not plug the numbers in yourself? You might be pleasantly surprised.
    Originally posted by Pixie5740
    Yeah don't worry about receiving proper guidance from a Mortgage Broker / Adviser, just follow Pixies's guidance and wing it....or not!

    It feels more like you need properly handholding by a mortgage broker. A broker will give you the support you need and potentially coach / guide you on how to get you into the position you want / need to be, to get a mortgage agreed.
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Broker, 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
    • Pixie5740
    • By Pixie5740 10th Oct 17, 4:37 PM
    • 11,010 Posts
    • 15,186 Thanks
    Pixie5740
    • #9
    • 10th Oct 17, 4:37 PM
    • #9
    • 10th Oct 17, 4:37 PM
    Yeah don't worry about receiving proper guidance from a Mortgage Broker / Adviser, just follow Pixies's guidance and wing it....or not!

    It feels more like you need properly handholding by a mortgage broker. A broker will give you the support you need and potentially coach / guide you on how to get you into the position you want / need to be, to get a mortgage agreed.
    Originally posted by YHM
    Simmer down. I never suggested that the OP shouldn’t seek advice from a mortgage broker I merely pointed out that the online calculators are available to everyone.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Firsttimebuyers
    • By Firsttimebuyers 10th Oct 17, 4:40 PM
    • 24 Posts
    • 0 Thanks
    Firsttimebuyers
    There is a little too much information there for me to say yes or no but assuming it passes affordability in the main you should be fine.

    Some lenders have a debt to income calculation that does not always get taken into account on the affordability calculators so you should be wary of that, but in the main having debt in itself is not a problem.

    Speak to a broker if you are in any doubt and they can guide you to the most likely lenders to accept you based on your individual circumstances.
    Originally posted by ACG

    Would this be the case on a 95% mortgage or would a 10% deposit make it more likely?


    Apologies OP for hijacking the thread, but we're in a very similar position - same income, and looking to buy at the same value with similar debt.
    • ACG
    • By ACG 10th Oct 17, 4:43 PM
    • 15,510 Posts
    • 7,858 Thanks
    ACG
    Debt is not a problem. If your income supports both and you are managing both then you should be fine.

    There are lenders who are more open to debt than others, but people think debt is a deal breaker.

    On a side note to the OP. If you do not try, I can guarantee you will not get a Mortgage. If you do try, you might.
    I am a Mortgage Adviser
    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.
    • Bromis
    • By Bromis 10th Oct 17, 7:50 PM
    • 5 Posts
    • 0 Thanks
    Bromis
    Thanks everyone for your help. I do feel it’s definitely a case of needing to have my hand held through the process. I think new buyers these days are scared off from even trying! Lots of positivity so that’s reassuring. Just feels so embarrassing that we’re in so much debt and not in a good position to start with. I’ve had a quick look on the calculators and it looks good, mortgage payments would be so much cheaper than renting too!! Thanks all
    • enthusiasticsaver
    • By enthusiasticsaver 10th Oct 17, 10:15 PM
    • 4,429 Posts
    • 8,237 Thanks
    enthusiasticsaver
    Your debt would be the biggest obstacle to getting a mortgage as this will affect the amount they will lend you. Obviously you will need the deposit and money to cover fees too. What is the plan with the cars as presumably there is a balloon payment due on both? Do you need two cars?
    Countdown to early retirement on 21.12.17 2 months to go.
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