FTB - I've been offered help from the Bank of Mum & Dad - Looking for some advice

ry_bo

Hi All,

I'm looking for some advice on a complicated offer of help.

I'm currently renting but my parents have offered to help me get on the ladder. We are currently looking for advice on ways we could achieve this.

There's a few options;

My parents could get the mortgage whilst I live there and pay the mortage, the only caveat with this is that they would only be able to get an 8 yr mortage.

My parents could lend me the deposit whilst I get the mortage and they act as guarantor.

The other option is pretty much as above without the guarantor but I'm worried I won't get accepted for a mortage.

I have approx. 21K debt in the form of a loan and credit cards and a credit score of 715 which places me in in the 'POOR' rating. Experian suggest that this is due to the high percentage of debt against available credit as I have no CCJs etc.

Realistically purchase price would be in the region of 100k due to the current house price climate. Hopefully my parents will help in the deposit, probably 10%

What do you think my chances are of obtaining a mortgage? Is there any options I may not have considered?

Please help!!

Thanks

scottn

how much do you earn? when are you thinking of applying? are you going to reduce your debt with some money from your parents?

ry_bo

Hi Scottn,

Thanks for replying. I'm currently earning 24.5K with approx 4-5K on top with overtime and allowances. I would love to be able to pay off debts but I think the money offered from my parents will just about cover a deposit let alone pay off debts.

I'm focusing on lowering my debts but realistically this is going to take time. Experian forcasted that if I make no applications for credit in the next six months and continue as I am that my forcasted credit rating would move to Fair.

Many Thanks

Trollfever

From the Office of Fair Trading 30th July 2009.

The draft guidance identifies types of policies and procedures that the OFT would expect lenders to put into practice. These include:
Ensuring all key information provided to prospective borrowers is clear and easily understandable and properly explained to them.
Assessing a prospective borrower's ability, in the context of their overall financial circumstances, to afford to meet repayments in a sustainable manner.
Dealing with borrowers in default or arrears in a fair and proportionate manner, seeking to repossess a borrower's property only as a last resort.

http://www.oft.gov.uk/news/press/2009/93-09

poppy10_2

You shouldn't be buying a house in your finanical position - it's madness. Concentrate on getting your spending under control and paying down your debts.

Cannon_Fodder

Lenders, if you could find one that would consider your application, are likely to insist upon repayment of the debts before advancing the mortgage money...

ry_bo

Thanks Trollfever.

Poopy10, you are exactly right, getting my debts down is at the top of my list. I feel though that I need to get onto the ladder and that is a priority as if I don't do it now I may never do it. I know I could afford the mortgage. There is also my wife's income to consider but she will not be applying for the mortgage as her credit score is really low as the only thing listed on her credit file is her current account. She doesn't have any credit.

Is there any avenues people could direct me down as to finding a suitable lender or product.

Thanks

TheMiner

You'll probably find you're associated with your wife when you get checked anyway. Might be worth lowering your debts, while improving her credit rating (get her a credit card and pay it off every month, mobile phone contract etc etc) and see where you are next year.

Frustrating I know, but that's the way it is these days