bad credit but want to buy

scooper

my partner earns around 20k a year,i dont work i stay at home with children
at the moment we are paying £80 in rent each week housing !!!,but think this is dead money.
but the problem is my partner and i have bad credit,we can not get any credit cards as we have debts outstanding to around 10k,is there a company who can help with problems like ours maybe at a higher rate to pay back instead of waiting to pay debt off?
thanks

Joe_Bloggs

@Scooper
What you are paying for housing is a bargain. It seems like that in my view. Try the Debt-Free Wannabe board for tips on how to deal with debt and make savings all around. There is often no quick fix but you can learn helpful things on all the forums and you may be able to help others.
J_B.

Ian_W

Hi scooper,
Buying may sound great with rent being dead money and all, but in fact all you're doing is taking on even more debt to buy a house. On £20K earnings with £10K debts most lenders are unlikely to offer much more than £60K/£70K mortgage.
Can you buy anything for that sort of money where you live in Cheshire?
You'll need 5% deposit and probably >£1K in fees and other costs, do you have that in savings?
You probably will find some firms at the @rse-end of the lending market [slightly above loan sharks] who will lend you the money at an inflated interest rate but they'll repo your property and put you and your 2 kids on the street if you get into any difficulties.
Joe's advice is very sound. Get your debts sorted first and when you have think about how you and your OH can earn a bit more between you before you consider house buying. I'm sure you'll get there - but do it at the wrong time and not only will you lose your home, you'll blow your chances for a very long in the future.

scooper

thanks for the advice,itshard sometimes when you hear so and so is buying a house and we are still renting,wanting to have our own home,but your both right,its a big commimtment.
thanks

Joe_Bloggs

Trying to 'keep up with the Joneses' is a major cause of irrational thinking. This can create tensions within a partnership. Eventualy somebody cracks and makes an unwise financial decision due to the constant pressure. There are benefits to budgeting and documenting what you owe and at what rate for your own private accounting purposes. There are debt reduction strategies widely practised on these forums. Since you are so well known and popular why not make a start on becomming debt free ?
J_B.

scooper

thanks for the advice joe-bloggs.
its not so much as keeping up with the joneses,its more of wanting to stop throwing money away rent our house.
where i live it is alot to rent,we pay one of the highest rent,we were thinking the money we pay out every month it would be better to invest it in our own home for the future.
but as i you have pointed out it probably isnt the right time to be looking into this and we should wait until our debt is lower.

Joe_Bloggs

Are you renting in the private sector ? Will you get a right to buy option and discount if in the public sector ? In any event there are people worse off than you. The deposit is often the key factor to shared ownership deals. Without one you will be put off from applying.
J_B.

scooper

we rent with a housing !!!,and we do not qualify for a right to buy either.

maybe the best idea is too save up for a major deposit anyway,as well as clear our debts

Debt_Free_Chick

scooper wrote:

its not so much as keeping up with the joneses,its more of wanting to stop throwing money away rent our house.

But in the same way, you chuck money away on a mortgage by paying interest to line the pockets of the lender! A mortgage of £60,000 would cost you £350.75 a month, assuming an interest rate of 5.0%, over 25 years. If interest rates never changed, you would pay back £105,225 - that's £45,225 in interest alone!!! :eek: And all you end up with a house to live in! True, you could sell it at retirement, buy something smaller and pocket the difference .. but you still need somewhere to live.

Plus .. when you own a house, you get all the maintenance & repairs to contend with. You have to add that on to the interest you would pay and then compare that with renting.

We are odd, wanting to "own" a house when all we really want is somewhere to live

Debt_Free_Chick

scooper wrote:

is there a company who can help with problems like ours maybe at a higher rate to pay back instead of waiting to pay debt off?
thanks

Another observation ... you would actually be far better off paying the debt off first. On your income, a mortgage of about £60,000 would cost roughly the same as your rent .. plus you would have to have a line in your budget for all the maintenance costs of your own property.

If you can afford to buy at a higher rate, it suggests you have some extra money ... so why aren't you putting that towards paying your debt of more quickly?

What plan do you have to pay off your debt - you're not just making the minimum repayments, are you? :eek: