Can I get back on property ladder - ever?

stressnstuff

Hello. My partner and I through divorces and child custody battles and making stupid decisions and stupid trust placement are now £60k in debt (facing that was very dificult but we got there). We have worked very hard over the last year to get in control, we now have all our debts being paid on monthly agreements adn have kept up these payment for 8 months with no breaks. We rent in an expensive area of Berkshire and pay £1200 a month for a 4 bedroomed basic house. We had problems getting a rented house due to debt but we have been here for 2 years and have never missed a payment yet. We think we could buy a small house and maybe even make money from it by letting a room out to students here. BUT - is this pie in the sky? We have 0 deposit. We both used to have mortgages about 5 years ago and no debts then, but have no house or property or anything now. So, what is the likelihood of getting a mortgage? Houses in this area sell for around £200k for 3 bed terrace. We could move but work and schools and colleges here, and prices really dont drop for up to 50 miles, honest!! The other idea is to buy to let and get a small flat to rent out for about 10 years until the children are grown and then have it ourselves. That would cost about £90k. I earn about £26k a year now, and my partner earns about £15 now. Is there any hope for us, guys? To add spice to an already difficult scenario, my future son-in-law would come in and add a further £12,000 if needed but he has one year to go before becoming a citizen here adn I'm not sure on the laws on that. I really appreciate all your views, comments and ideas. This site has paved the way for our sanity I have to say!

Leon_W

Working backwards.

For a Buy to Let mortgage you will need a deposit, 15% is typical. Most mainstream buy to let lenders will not accept applications from anyone with an impaired credit record. That said, there are a few (and I mean very few) that have adverse buy to let mortgages. The rates are higher, you may need a bigger deposit than 15% and you still may not meet their lending criteria.

A 100% mortgage in your present situation. No. Your credit rating will not be good enough for one and you could not borrow the amount you require (£200K ?) on your salaries. That would be the situation even if you had no debt at all.

Sorry if this all sounds a bit blunt and to the point, but I believe it's best to tell it as it is as one of my pet hates are fellow brokers that lead people up the garden path, build their hopes up, and then let them down at the last minute.

All the best.
Leon

meanmachine_2

Trouble is you have poor credit, monthly loan outgoings, no deposit and dependents.

To be honest, you're not ticking any of the boxes needed to qualify.

The only solution is to work off that debt and scrape together a 5% deposit.

There might be an obscure sub prime lender somehwere prepared to lend you something, but the interest rates would be very high.

Sorry - that's not much help, is it?

The buy to let is another debt commitment and not a solution, imo.

mikeywills

How about checking with your local council to see if they have any joint ownership schemes. They do where I live, they go upto 50% of the cost with you, so you jointly own the house. If you sell it they get half of the proceeds including any potential increase in value.

A friend of mine has this scheme in Cardiff, and got a 100% mortgage, and took a loan to pay for the deposit, I am not saying you shoul dfollow this example but certainly check to see if the council in your area runs a similar scheme.

Rick62

Got to agree with Leon and meanmachine - all I can suggest is if you were thinking to rent a room in a 3 bed if you bought, why not let a room, or even 2, now. You allowed to keep something like £4,750 tax free, the lease won't allow it but just keep it informal (a 'domestic arrangement') and don't tell the landlord. Then use the rent to reduce your debts.

ukbondraider

£1200 Month rent?

In my opinion you need to find a smaller place and start reducing your expenditure even if that means living cramped. You need to bring your debt down close to zero before even thinking about buying a house.

If I was in your situation I would be looking at living in council houses for a few yrs and saving more of your salary. Like most people if you cant do this and want to live outside your means then you will never get anywhere. That is life Im afraid. When I was young and earning around £50K I was still living in council accomodation paying about £50 a week which at the time in my eyes was expensive given the state of the place. I however made it very cosy and a nice place to live overall.

stressnstuff

I do appreciate the replies, blunt or otherwise, thank you all. I never think it hurts to ask. Thank you for putting me clear about it all, although I knew it was scant hope I thought I'd see what people in the know thought! I know without knowing our circumstances it does look as if we have lived beyond our means, trust me when I say we have tried everything we can possibly do adn are still trying. We live in this house because this landlord gave us a chance to rent when others turned us away. We tried three local councils and can't even get on the list for a flat let alone a house. We do not 'qualify'. The council we live within only has key worker housing. On these boards I truly think everyone does what they can in life. I grew up in a two bedroomed rented flat with 5 people in it, I know how comfortable a home can be no matter how small! Thank you everyone. I shall go and search for more ways to reduce debts now!!