Ownhome scheme - chance of getting accepted with debt

coffeedog

HI there, this is my first post and i'm keen to get some realistic advice. ( Sorry it's so long)

My other half and I are first time buyers. Our rent has just gone up dramatically and whereas before it made sense to carry on renting before as the rent was so low, now we're thinking of buying. We don't have a deposit so I'm interested in the Ownhome scheme and have looked into it pretty thoroughly. The downside of it is that when you sell, you end up giving the Places for people group who provide you with a loan for the deposit the same percentage as you borrowed when you purchased. If you haven't managed to pay it off before you sell.

We are on the waiting list for an eligibility interview right now but i'm worried about our chances of being accepted for the loan and for a co-op mortgage (who the scheme is tied to) as i have a fairly high level of debt.

I earn 29500 per year and my boyf. earns 20,000 per year. My salary will probably rise by 1-2k in september , even with the economic situation. My boyf. has no debt at all and never has done, aside from a credit card with approx £1000 on it. I on the other hand have large debts from going through law school and suporting myself through it and the subsequent training whilst on a minimum salary for 2 years. It now totals about £45,000 and will be cleared over the next four years.

We manage well with day to day stuff and the rent and the last default i had on my debt was approx. 6 years ago, when i was still a student! The debt is spread over credit cards and loans, as i have moved around to those with low interest rates and 0% deals to cut down the time i am paying the debts off for.

We are looking to spend £120000 to £150000 on a place to get a foot on the ladder and are in an area of the country where prices are low at the mo. We are looking at a £90,000 mortgage max. We figure that in four years time when my debts are clear that prices will have started to rise so see this as a good time to buy. It also fits with our circumstances too.

I am worried that it is not even worth going for the scheme if my debt would rule us out. Any advice would be much appreciated.

thanks a lot. ( Please be kind, i'm new to this site!)