OwnHome Scheme: First Time Buyer But has Debt - Advice Please

jcb18

Hello All

I didn’t know where else to go to get advice – and I figured where better than the moneysavingexpert forums.

I have a lot of debt £380000 to be precise.

My husband has zero debt and has started looking into the OwnHome scheme – we are eligible for funding but I’m worried that we won’t be able to get a mortgage because of my debt.

I know I owe a lot and have checked out my credit score – which says fair/average.
I have never missed a payment, been in arrears, or had any CCJ’s or anything like that. According to my credit score – the thing having that is having a negative effect is the amount I owe – which is understandable.

Is there anything I can do to improve our chances of getting a mortgage?

Has anyone else been in this postion and been approved?

Any advice would be much appreciated.

Giraffeseeker

jcb18 wrote: »

I have a lot of debt £380000 to be precise.

I assume you mean £38,000 not £380,000!

I guess it would depend on your joint income, etc, co-op work on an affordability forumla of some sort. Why don't you call them and ask them?

There is an ownhome thread running here: http://forums.moneysavingexpert.com/showthread.html?t=1093305&highlight=ownhome

You might get some answers if you read through or post your question there.

superfran_uk

jcb18 wrote: »

I have a lot of debt £380000 to be precise.

:eek: That is a LOT of debt right there. I hope you just got your 0s wrong!

I won't sugar it, you may not be eligible with this much debt. Give them a ring and ask, but even if you are eligible for the scheme (i.e. places for people say yes) you may not get the mortgage as the Co-op are being VERY cautious - all lenders are using any excuse not to lend at the moment. They offered my partner and I less than 3 x salary and we have no debt and very good credit, thankfully this was all we needed. They will always take the debt away from the amount they would offer, which could easily make it impossible to get a house in your case.

Forgive me for saying this, but even if you were accepted on to the scheme and offered a mortgage, I would question whether taking on another huge debt is the right thing to do at the moment? You have managed to accrue a lot of debt, more than most people's annual salary, and without knowing the circumstances behind it I would have to guess (as a mortgage lender would) that perhaps you are not great with money? I would suggest you should visit the DFW board and perhaps look at how you can pay it off more quickly.

charliee_3

i think what they do is take the amount that you pay back each month on debt (say you pay £1000 a month back to credit cards, loans etc) and they times that by 12 and take it off your salary before they use it for the calculation. so if you earn £30k they would take £12k off it and then use that figure for the multiplier, not your full salary, thereby reducing the amount you can actually borrow in the first place...

i dont know this for sure, but i am sure i read/heard this somewhere...