Advice please

katsplat1

My hubby and I both have a pretty crap credit rating. We currently rent a house which we love and have just signed for a further 12 months. The actually landlord came round yesterday coz we wanted to discuss some minor home improvements - decorating etc and he is a smashing bloke. Got on really well and we told him how much we love the house.

He told us that if we do like the house that much, to think about buying it. At the end of our 12 month contract he is 'probably' going to put it on the market. If we would like to buy it though he is happy to negotiate a price and sell direct to us without the use of estate agents.

Now at the moment H and I have no savings (except for my pension) and like I said - a few niggly debts that mount up to about £20K. Where do we begin if we are seriously thinking about going for our house.

We expect to pay approx £140,000 and currently earn combined about £45,000. Should we spend the next 12 months saving like mad or paying off debts? Do we go direct to any particular lenders, use a broker, or go to one of these 'Mortgage Shop' type places.

I really do not have a clue!!! haha

(Our rent by the way is £600 a month excluding bills and we have never missed a payment.)

MortgageMamma

Hi there

You could save a deposit (you may need 5 or 10% depending upon your credit rating) or you could look for a 100% mortgage, depending again on the score on your credit rating. There are some mortgages available that let you borrow up to 120% of a property value and you could consider consolidating your debts that way as well. Its not possible to advise which route is specifically best for you without you undergoing the full advice and recommendation process, but these are some options for you.

And before other posters jump on my head and insist a saved deposit is the best way forward, please remember everyones financial situations and needs are different, and the OP may not be able to save the amount of deposit required in time for the sale in 12 months.

katsplat1

MortgageMamma wrote:

Hi there

You could save a deposit (you may need 5 or 10% depending upon your credit rating) or you could look for a 100% mortgage, depending again on the score on your credit rating. There are some mortgages available that let you borrow up to 120% of a property value and you could consider consolidating your debts that way as well. Its not possible to advise which route is specifically best for you without you undergoing the full advice and recommendation process, but these are some options for you.

And before other posters jump on my head and insist a saved deposit is the best way forward, please remember everyones financial situations and needs are different, and the OP may not be able to save the amount of deposit required in time for the sale in 12 months.

[stupidicon]!! What does OP mean??!!

Thanks for that though MM. How would I go about finding a 'reputable' broker? I don't know anyone who has bought a house with one but I like the idea of someone being able to shop around for the best deal. The only people I know who have bought houses are my brother's and they both got deposits through inheritances.

MortgageMamma

OP Means original poster! Sorry its MSE terminology.

As for brokers, you have a lot of options. There's no harm in using a broker from this site, there are quite a few of us. If you want advice over the phone then you could use any of us. if you want to see someone in person let me know the area you live in and I'll tell you which broker is nearest.

MM

katsplat1

Thanks Mortgage Mama (sorry for delayed reply!!)

I am in Leicestershire.

What kind of info would I need to get together before I speak to a broker?

Joe_Bloggs

See the sticky at the top of the House buying,renting section here.
You might consider the debt-free wannabe board for beating debt. Read the sticky posts at the top first.
Trying to save up for a deposit when you have so much debt makes little sense. You get so little for your savings and you get taxed on the little you get. Put your money into paying off high interest debt or switch the rate of the debt to a lower interest rate.
J_B.

MortgageMamma

Hi Kat

Your need details of your employment, salary, benefits in kind, sick pay entitlement, savings, credit commitments, credit rating, and monthly budget/cost of living before you speak to a broker. If you are going to find out how much you can borrow then the broker will help you with this, most likely over the phone by taking these details. If you know roughly how much you want to borrow the broker will see if this is doable, ask more questions, then you would go back once you have seen a property you like and your broker will help you put in an offer/negotiate the buying price. Its at this stage you will get somethign called a mortgage promisem, which is an agreement in principle from a lender to say you can borrow the money subject to survey and underwriting, then you would proceed to full application.

By using a true whole of market broker you are going to get the best mortgage for your circumstances, which can be taken from all the mortgages in the UK marketplace. If you go to a tied broker they select your mrotgage from a limited number of lenders. I generally advise first time buyers to be wary of estate agent advisors as there is a conflict of interest there.

If you want more help let me know. I don't know any advisors in Leicestershire but it is not necessary in this day and age to see your advisor face to face, as equally good advice can be given on phone.

MM

katsplat1

MM

Thanks for that. That gives me something to work on at least!!

I am also thinking about getting a part-time job for extra pennies!!

MortgageMamma

Good luck Katsplat, I hope you manage to buy your house. The part time job should help loads, when I was younger I used to go to peoples houses and do make up parties for virgin vie, I made about an extra £150 a week out of it.

MM