First time buyer help...

Elliejayne

Hi all, I'm after some advice. I work and my partner stays at home with the kids.
My gross is £20700pa and we also get child benefit and child tax.
Where looking to buy our council home before the right to buy scheme ends.
We have a loan with about 7k left and 22 payments on it of £333pm. Our rent is approx £270pm . That's £603pm we pay out. A property 2 doors up is on sale for £90k, so our property value is about £80k-£90k. We get £16k off for tenant discount which can be used as a deposit.£16k off £80k is 20% deposit. I'm also looking to add my loan on to the mortgage over the 30 years, so instead of paying £603pm on rent and loan we would be paying less for a mortgage with the loan attached. Any thoughts or help?

Thrugelmir

Whilst owning your own home is a worthwhile dream. Resolve your existing financial issues first. Lenders in general will no longer consolidate existing debt onto a mortgage. Personally I would caution you in any case from transferring an existing debt of £7k with less than 2 years to run, to one with 30 years.

CloudCuckooLand

Thoughts.

30 years is a long term for as mortgage.

Turning unsecured debt into secured debt is usually a bad idea. You don't pay less in total, just less per month for longer, adding up to lots more...

Ages? If you are mid-thirties and have a thirty year mortgage, you'll be retired as you finish the mortgage, leaving no time to build up a retirement fund.

Elliejayne

Thanks for your reply. What about an interest only mortgage fixed for 2 years. That way we will be paying the loan off and clearing some of the interest off to.

Thrugelmir

Majority of lenders now require evidence as to how an interest only mortgage will be repaid.

Elliejayne

CloudCuckooLand wrote: »

Thoughts.

30 years is a long term for as mortgage.

Turning unsecured debt into secured debt is usually a bad idea. You don't pay less in total, just less per month for longer, adding up to lots more...

Ages? If you are mid-thirties and have a thirty year mortgage, you'll be retired as you finish the mortgage, leaving no time to build up a retirement fund.

I'm see that adding loan on is not the way to go now Thanks. P.s. I'm 28 and my other half is 29.

Elliejayne

Thrugelmir wrote: »

Majority of lenders now require evidence as to how an interest only mortgage will be repaid.

I was thinking of paying interest only for two years until the my loan is paid off and then change the mortgage to a repayment mortgage. What kind of evidence do lenders require? Thanks.

Thrugelmir

A repayment vehicle such as an endowment policy or evidence of regular savings into a stocks and shares ISA.

So really no different to having a repayment mortgage in terms of monthly outgoing.