Wanting To Buy A House

in-debt

I presently live in a rented house and pay £335 a month. A relative of mine is putting their house on the market and I am wondering if I would beable to get a mortgage. I have outstanding debts totalling to approx £33,000, I have a plan with Payplan and pay them £500 a month. I wanted to know if it was worth contacting someone to see about a mortgage but again dont want to be wasting their time and mine if the answer is no. The house is valued at around £115,000 to £125,000 (the valuations have come in at). My relative has said that the house would be offered to me for £80,000.

I would appreciate any help with this.

Zippy2006

The offer you have been given sound very good and I hope you can get the finance to complete the deal. Deals like that don't come along that often.

I see you are paying Payplan - which means you may have problems on your credit files.

It all depends on your Credit File?? Does it show any defaults / ccj's etc .

You may be able to get a mortgage but will you also be able to get a rate that makes the purchase affordable / worthwhile.

Check out your file and speak to an advisor (don't pay for advice).

roswell

what is your salary ?

in-debt

Hi
My salary is £20,500 or just over and my partners salary is £19,200.

I dont have any ccj's but do have some defaults.
Regards
In-debt

A_Nice_Englishman

Looking at it another way, how about getting the (very generous!) relative to sell the house at market value and give you the approx £40K?

That way you could pay off your debts which would make getting a mortgage easier as well as having a deposit to buy whatever house you wanted.

Angela_D_3

A_Nice_Englishman wrote:

Looking at it another way, how about getting the (very generous!) relative to sell the house at market value and give you the approx £40K?

That way you could pay off your debts which would make getting a mortgage easier as well as having a deposit to buy whatever house you wanted.

Turning unsecured debt into secured debt, not the brightest idea. I assume the interest has been frozen via payplan, if so keep that going and don't mention your (hopefully) new house. I've seen people in worse financial positions than you get mortgages.

roswell

Angela_D wrote:

Turning unsecured debt into secured debt, not the brightest idea. I assume the interest has been frozen via payplan, if so keep that going and don't mention your (hopefully) new house. I've seen people in worse financial positions than you get mortgages.

EH ?? its not the ops house so dont see how its turning debt into secured debt if they follow Englishmans advice

A_Nice_Englishman

Angela_D wrote:

Turning unsecured debt into secured debt, not the brightest idea. I assume the interest has been frozen via payplan, if so keep that going and don't mention your (hopefully) new house. I've seen people in worse financial positions than you get mortgages.

I'm not sure about the moral aspect of this.. The OP is being given a gift of £40K which is more than enough to pay off his debts. Is it right that he should conceal this from Payplan and his creditors? At the end of the day borrowers much worse off than him will be subsidising him.

What are the legal aspects? Anyone know?

jyonda

A bridging loan is expensive but not based at all on credit history, just the value of the property. So if their valuer agrees it's worth 115k they will lend you 70% which is the 80k you need to buy it. No money of your own needed! Once you own the house it should be far easier to obtain a less punitive rate of interest elsewhere in order to consolidate your debts.
Have a look on the interweb or in auction catalogues for specialist lenders.

Have a word with a mortgage advisor beforehand though.....

PoorDave

roswell wrote:

EH ?? its not the ops house so dont see how its turning debt into secured debt if they follow Englishmans advice

Instead of being borrowed from where they are now (creidt cards or loans, then into payplan), the 33k of debt would be on a mortgage that extended to the "full" value of the house, above the 80k that has actually been used to purchase it, perhaps?

Debt_Free_Chick

in-debt wrote:

I presently live in a rented house and pay £335 a month. A relative of mine is putting their house on the market and I am wondering if I would beable to get a mortgage. I have outstanding debts totalling to approx £33,000, I have a plan with Payplan and pay them £500 a month. I wanted to know if it was worth contacting someone to see about a mortgage but again dont want to be wasting their time and mine if the answer is no.

First off .... what does your credit record look like? Late payments? Many of them? Defaults? Arrangements to pay? All of these will make getting a mortgage difficult and you won't get good mortgage deals. You may even have to pay a higher rate of interest as you might be considered a high-risk borrower ... .but it depends on what your credit record looks like.

The house is valued at around £115,000 to £125,000 (the valuations have come in at). My relative has said that the house would be offered to me for £80,000.

Perhaps this is the only reason you are considering this - because you seem to be getting a property at a discount.

Have you actually considered how you would manage the mortgage repayments and all the associated costs of owning a property? Using this mortgage calculator, borrowing £80,000 over 25 years assuming an interest rate of 6% is going to cost over £500 a month :eek: You would need an interest rate of 5% to end up with repayments about the same as your current rent.

Then, on top, you have all the costs of owing e.g. building insurance, maintenance, possibly higher Council Tax.

And the costs of buying .... solicitor fees, mortgage lender fee, survey (if you get one), removal costs etc. There's a risk that you'll pay stamp duty too, if the taxman thinks that the property is actually worth £125,000 or more (as this is a "connected" sale i.e. between relatives).

And you would still have your debts, on which you are not meeting the minimum repayments :eek:

You are talking as though you have spare money - but you can't have, on a debt management plan. On top of that, you are actually looking to increase your debt by £80,000 :eek:

Sorry to be blunt, but you need a reality check or even a virtual slap You are getting carried away by what seems to be a bargain, without considering everything else involved.

You must be pretty experienced at doing budgets - have you done a budget assuming you did buy the house?