Bad credit rating - paying in more ways than one eh?

manitouman

We have a repayment plan with the CCCS and still have aroung £8000 still to pay off - after unemployment and marriage breakdown etc years ago. We own our ex-council house with no mortgage and might get around £100000 in todays market if we're lucky. Both myself and the wife are employed and nobody will touch us for a mortgage. The family is too large for our wee 2 bedroom house and we really need to move. How? We have even spotted our ideal house which is just on the market as a repossession fixed price of £99000. It could take a while to sell our house realistically and anyway we would need around £10000 on top of the asking price for fees etc. A work colleague said we could mortgage our own house to pay for the other??? Sounded as if there was logic in there somewhere but where? Also to really complicate things - could we get an interest only mortgage for the new house and then rent out the old one? When everything is in place (tenant, buildings and gas insurance etc) we could change the mortgage to a capital plus interest mortgage so that in 20 years we have an income/pension from one property and no more mortgage???? Are we missing out on a fantastic chance because of bad credit from years ago? Is there anything we can do or do we just have to live with this?

Cannon_Fodder

While you have debts, and presumably a poor credit record to match, there is little chance of a mortgage.

Best not to wind yourself up fighting against the inevitable, as a mortgage application that fails will worsen your credit history.

Better to set a target, say a year, to clear your debts. Get to the Debt Free Wannabee board and get advice on how to trim spending as much as possible.

Taking on a second property, to rent your current one, whilst you have debts is a very risky approach, anyway. Should you have void periods - be without a tenant - then you would have to cover the costs of both properties...leading to higher, not lower, debts.

In a years time the credit crunch should have eased, and being debt-free should put you in a better position.