FTB Looking for general advise, do my sums add up?

Percy1983

I must say I actually first registered on these forums due to debts, I have never had a problem paying debts so have no problems on my credit file.

Basically me and my Financee which to enter the property market (we are both 26 for information)

Our Net incomes are £1250 and £1000 so of course a Net income of £2250. We are both in safe (as can be) jobs.

Now the reason I am asking questions is between us we have £21k of debt (mostly because I me I will admit), its not too bad in the sense of approx £10k is 2 cars which are both decent low mileage reliable etc.

Now here comes the plan, the most sensible thing would be of course fully pay back all debts, then save a deposit, then buy a house... But that will take to long so the plan...

If I was to get a loan with payments of less than £300 a month over 7 years I would get around £16-17k, so basically do this, which would then leave us able to save/pay around £1300 a month between us a month.

From there clear the remaining debt (£5-6k) as quickly as possible then get saving for a deposit.

Luckily house prices for what I am looking for are around £70-75k and are still dropping slowly.

So would a loan like above me a huge problem? or would the payment just be taken from our net income causing a net income of around £1950.

Secondly would an income of £1950 be acceptable for a £75k mortgage?

I don't expect exact answers here, as you may guess my focus isn't shifting debts as fast as possible but getting a mortgage. Personally I can't see any problems with my plan but I have no experience with getting mortgages so would really like any feedback or even other ideas.

Sorry this is a long post, hope you can help.

Cannon_Fodder

Lenders will take account of debts, and the payments to them, when considering affordability.

They may even require you to repay debts, before they advance the mortgage funds, as they view a debt as the potential source of the deposit.

And the idea of deposits, especially since the credit crunch, is to ensure the borrower takes a genuine stake in the property.

With a decent deposit, your salaries look ok to support a £75k purchase.

But it comes back to your debts, the lenders will not be happy that you are "robbing Peter to pay Paul", effectively.

Percy1983

I see your point, I won't be taking a loan to directly fund a deposit but the overall effect will be I am.

I would be aiming for 15% deposit for around £11.5k so if it all went to plan it would be at least a year. So would be looking at 6 years of loan left and technically have capital of £11.5k deposit and 2 cars worth approx £8.5-9k.

Also say if I was to to get rejected I would be int he position to be adding over £1200 a month to the deposit and of course the outstanding loan would keep reducing.

So in another 6 months I could have a 25% deposit and 5.5 years loan left, I will say eventually it would get to the point where I could clear the loan and retian enough for a deposit but of course that is a longer time period than I want really but in worse case scenario it would work.