Mortgage but I have debt

rob9911

Hi,

I'm currently renting a flat, and my landlord wants to sell it at the end of my lease, (July), and has offered me first refusal, which is perfect as I would love to buy it. He's not given a price yet, but an identical flat in the block is currently on market for £190k, although has not sold in the last 4 months!

Trouble is, I have a some debt of around £20k, and no deposit. I can afford the mortgage on an interest only for the first couple of years as this will be much lower than the rent I'm paying now, and I should be able to borrow up to around £160k based on my income. My plan is to get an interest only mortgage, then take out a secured loan to clear off my debts, possibly only have to spend £10k as I'm sure I could clear them with a one-off payment. Then , after a couple of years, all debts except the mortgage& secured loan gone, I can change it to a repayment mortgage.

What are my serious chances of getting this mortgage approved? Any advice?

thanks

Rob

[Deleted User]

You'll not get a mortgage without a deposit. Minimum 10-15%.

rob9911

thanks, I thought not. There is a possibility of getting 10% deposit from my dad (fingers crossed). This would then reach a price of £176k for the flat, which might be accepted by the landlord as it's a quick sale, with no estate agents fees etc.

opinions4u

rob9911 wrote: »

Trouble is, I have a some debt of around £20k, and no deposit.

You need a deposit of 10%-15%.

I can afford the mortgage on an interest only for the first couple of years as this will be much lower than the rent I'm paying now

I don't think you'll find a lender willing to allow you to have an interest only mortgage.

and I should be able to borrow up to around £160k based on my income. My plan is to get an interest only mortgage, then take out a secured loan to clear off my debts

If you have no equity in the property, how are you going to get a secured loan?

What are my serious chances of getting this mortgage approved? Any advice?

The truth? You've no chance at the moment.

You need a deposit.

Henry_P_Chester

The truth? You've no chance at the moment.

Yep I'm afraid this is true.

1. You will not get a mortgage if you currently have debt.

2. Interest only mortgages a few and far between and you normally about 20% deposit at least.

3. Without a deposit there no mortgages available. I believe there is a 5% deal from skipton but the interest rate is a whopping 7.12%!! Not even worth considering if you ask me.

Best advice clear your debts save up a deposit. Prices won't be going anywhere in the current economic climate so at least you have time on your side.