Mortgage with debt?

anared

Is it possible to get a mortgage if you have debt?
My DH and I have each got a £13,000 loan. We are nearly a year into paying them back (5 yr term). We got them to consolidate CC spending (we now have no cc debt).

We earn £65,000 between us. Do you think it is possible to get a mortgage? We don't have a deposit but could get £10,000 as a loan from one of my brothers (with no interest).

_Andy_

Possible? Maybe.
Sensible given your situation? No.

anared

_Andy_ wrote: »

Possible? Maybe.
Sensible given your situation? No.

Can you tell me why?

Do lenders lend to people with quite a lot of debt normally? (we have never ever missed any payments, always pay on time etc).

I just feel we are paying so much in rent (£1400 a month) and I would rather pay towards a mortgage.

dimbo61

You earn £65K a year between you and your OH and have CC debts of £13K which is now a loan spread over 5 years hence more interest and no deposit !!
You need to sit down and look at all your spending and cut back in order to build up savings for a deposit

GMS

Debt being managed and serviced properly could actually help you get a mortgage. Having debts which are affordable is not an issue.

Issue you have is the borrowed deposit. Lenders will not like that.

ryan86uk

No.

You're asking for technically a mortgage way in excess of 100%. You can't use a loan to fund a deposit. That's like paying a debt with a debt - financially stupid!

If you want my advice, pay the loan off (you earn good money). Save for a 25% deposit and then start looking houses. It's all well and good getting on the property ladder but its technically not yours until you are mortgage free. I think you will be making a very mad decision if you get a mortgage in your situation. Prisoner in your own four walls comes to mind....


Good luck!

anared

dimbo61 wrote: »

You earn £65K a year between you and your OH and have CC debts of £13K which is now a loan spread over 5 years hence more interest and no deposit !!
You need to sit down and look at all your spending and cut back in order to build up savings for a deposit

We both have £13k loans so £26k between us. We are getting better with money and are now paying the debts off and not running up anymore! (I am fully aware I have been awful with money in the past!)

But I just wanted to know if it is possible to get a mortgage with that amount of debt or will the bank just laugh at us? We could definitely afford the monthly repayments, they would be less than our rent right now.

anared

GMS wrote: »

Debt being managed and serviced properly could actually help you get a mortgage. Having debts which are affordable is not an issue.

Issue you have is the borrowed deposit. Lenders will not like that.

Would they have to know it is borrowed? My brother told me he would lend us it and we could pay him back when we moved/when we could afford it.

beecher2

You can't borrow a deposit - it isn't allowed. Is it houses worth £100,000 you're looking at (assuming your plan was to borrow 10% deposit)? If so, surely similar houses are being rented out for less than £1,400/month? Rent somewhere cheaper, pay off your debts and save up your deposit. Debt Free Wannabee forums can help.

ryan86uk

beecher2 wrote: »

You can't borrow a deposit - it isn't allowed. Is it houses worth £100,000 you're looking at (assuming your plan was to borrow 10% deposit)? If so, surely similar houses are being rented out for less than £1,400/month? Rent somewhere cheaper, pay off your debts and save up your deposit. Debt Free Wannabee forums can help.

Agreed. :cool:

Bullfighter

£1400/pcm rent for a couple is uber extravagant. We (family of 3) rent a house privately in the Surrey Hills for less than £900/pcm.