Mortgage advise with debt

John4702

Ok i have a property worth 130-135

A mortgage of 110

Equity of 20K

An income of 40K

Partner income 5K

Debt of 60K

A good credit ratin, not excellent just due to the sheer amount of different cards i have.

I manage the debt well and it costs me 225 a month in interest.

What sort of morgage could I get? how many K's

Bearing in mind in the future my partner will bring in up to 15K +

Many thanks.

Leon_W

If the debt is all on cards this is a problem. 60k?

Most lenders will assume 3%-5% of the outstanding balance as the repayment per month whether you are paying this or not. Say £1800.

They'll deduct this from income before doing either the income multiples or affordability calculation. By my reckoning you wouldn't even get to the mortgage size you have now.

Lenders take no notice of what likely FUTURE income will be unless they are on a structured career path in a profession.

sarah_elton

John4702 wrote:

I manage the debt well and it costs me 225 a month in interest.

Define managing it well.

How are you paying it back and when do you expect to have it cleared off?

AMILLIONDOLLARS

sarah_elton wrote:

Define managing it well.

How are you paying it back and when do you expect to have it cleared off?

Answer: Never!!:D See his thread on the DFW Board!!!


http://forums.moneysavingexpert.com/showthread.html?t=295906

AMD

Leon_W

Oh Dear, that is a very poor plan. Buy to Lets, renting. Whats that all about ?

Anyway, it won't happen. Your going nowhere John until your unsecured debts are vastly reduced.

Your £20k equity will be greatly reduced by agents fees, stamp duty, legal fees etc so you'll barely be able to even raise a minimum deposit.

Forget moving and repay that debt.

Mizz_Pink

:rotfl: :rotfl: :rotfl:

John4702

Thanku for yor comments so far, but i managed to get my mortgage now with debts of 50K.

Does anyone think out side the box on this forum?

AMILLIONDOLLARS

I take my hat off to you John, you managed to reduce your debts by £10K in a couple of hours, could you please let us know how you did this, we could all do with a such a large cash injection to reduce our debts by the massive amount, please tell us your secret:rotfl: :rotfl:

sarah_elton

John4702 wrote:

Thanku for yor comments so far, but i managed to get my mortgage now with debts of 50K.

So have you spoken to your current lender? What offer is on the table from them?

Debt_Free_Chick

John4702 wrote:

Thanku for yor comments so far, but i managed to get my mortgage now with debts of 50K.

So .... you had £50k debt
Took on another £100k (mortgage)
Increased your existing debt by £10k

and you now want to increase your mortgage debt .....

Am I the only one who sees a worrying trend and, perhaps, someone in denial?

Rick62

Hi John,

I'm really confused what you are trying to do. I think you want a larger house but you are struggling now, having gone through a divorce. Moving will cost loads, EA fees, lawyers, stamp duty, mortgage fees. I don't know if you have maintenace payments, but otherwise £1000 should be plenty for you, £500 mortgage, then repay £1000 month on the debts. Then once your gl working as well you can put more to debts then start thinking about a larger house.

Prices are not going far up in the next few years, so you will not miss out on any great equity gains (and might avoid a correction) but interest rates are going up, swap rates are at 5.4% now. Get you debt down aand your balance sheet in order first.