clear debt in time for mortgage - sorry bit of a long one!!!

all_hours

Couldn't you ask the parents if you can stay until the end of next year and offer a little more rent. Does that rent cover food for you both?

quantumleap

Agree with Lynzpower, a 125% mortgage is not a good idea under any circumstances. For you to automatically put yourself in negative equity on a low(ish) salary with a fair amount of current debt, would, in my opinion be a disaster.

HairyHandofDartmoor

I agree with the other posters. Taking on mortgage, especially a high interest one whilst you are on low incomes and have a high level of debt, seems like madness to me.

House ownership can be expensive, believe me. If anything goes wrong (boiler, damp, discover faulty drains etc) you have to pay for it. If you are in negative equity then you cannot sell the house very easily if you have financial problems.

You are very young to be buying your first house, and not in a very sound financial situation to be doing so. By paying off the debts first you will get a cheaper mortgage and a greater chance of being able to cope with all the expenses involved in being a houseowner.

I understand you are impatient to get on the housing ladder, and it is hard to defer your gratification sometimes, but I think a lot of us on here are in debt because we could not wait, but wanted to buy things we could not afford.

Also your oh worries me. He likes to spend money on his car and with all the expenses of house ownership he won't be able to afford to. Does he understand this or will he keep buying things at Halfords on high interest that he can't afford? I hope you understand why we are concerned and worry about what lies ahead for you if you go ahead with this.

claire999

thanks for all your help, my other half does understand that he cannt and wont buy anything from halfords especailly with the edge card - i actually have it in my bag at all times so he cant spend on it.

We have to move out of OHs parents by feb/march as that was the original deal, his parents are also strugling with money issues at the moment and can really afford to pay the increased bills that we make by being there, i cant go back to my parents home as i dont speak with my mum as she was the one who kicked me out two year ago,

If we cant get a morgage then we will just rent, but i really do want to get on the housing ladder now, anyway my boss has just said that after my interview last week i will be getting a pay rise from my promotion!! dont know how much yet though, i have to wait for the formal letter!!!

quantumleap

At the end of the day Clare, it is up to you guys. I think you've been given pretty sound advice this far to be honest. Do think very seriously about any mortgage deal you are offered, particularly one that puts you into negative equity.

With regard you're OH, you really need to speak with him. If you are having to keep hold of his cards in order that he doesn't spend on them then I'm afraid the problem still exists.

Again, I wish you well.

Kevicho

TBH youd be better off staying at your OH parents and giving them more money

Their money poblems are not your fault, but you have a great opportunity to get yourself on the right foot before you think of buying a house, use that situation to your advantage, cheapish rent, no council tax etc bills.

22k of debt is not a good start, also quit smoking, and concentrate on clearing off then cancelling those APR cards first.

That way you may be able to clear that in a 18 months to 2 years time

Verbatim

Congratulations on your promotion and payrise.

I would thing that having a default on your credit file would stop you getting a mortgae or anyway a good deal? If you can, have you thought of transferring cc debt to a 0% card or a low rate for life of balance? You need to tidy up your credit record and close unused accounts and ask for verification that this has been done.

If interest rates go up do you know what your mortgage repayments would be? Could you afford them? I would agree that you would be wise to reduce your debts first.

if houses are available locally rather than flats could you rent with another couple so you could all share bills. maybe there's someone else you know in a similar position who wants to save for a deposit/pay off debts? Otherwise would your inlaws be happier for you to stay if you paid more towards their increased bills?

Anyway, best of luck to you both, you do sound as if you're determined to sort it all out.

all_hours

claire999 wrote:

We have to move out of OHs parents by feb/march as that was the original deal, his parents are also strugling with money issues at the moment and can really afford to pay the increased bills that we make by being there

But would they be able to manage if you increased your contribution?

If you increased it by £100 per month - you'd still have about £400 to throw at the debts this would pay off the cards in around 7 months. After that you would have nearly £500 each month to put towards the loan - if you can't make over payments then it would take only 3 months to save up the £1500 you need to buy. You could start looking around in March/April. This doesn't take into account the months you earn more from overtime or any pay rise.

lynzpower

From what I can tell on moneysupermarket, your Avon will be classed as a default. As you have "adverse credit histories" he best mortgage I can find on there is 6.74.

Compare to the 4.5% I pay, and for a similar mortgage you guys would end up spending an extra 110 every month more than me.

Youll always pay higher interest rates through having 0 deposit as well.

I understand things are difficult where you are, but did you know the average age for buying ones first home is 32. Could you not offer your parents in law an extra 20 a week? bear in mind 30pw each food & board is very low indeed.

lynzpower

what are your annual salaries?