Past bad credit rating and buying through shared ownership!

mumoftwins

Are you renting now? Privately or through the council/housing association?

BitterAndTwisted

Yep, especially as mortgage lenders are currently looking at their borrowers having about a 20% deposit saved. Plus a decent sum set aside for the survey, conveyancing and moving expenses which could add up to a couple of grand as a bare minimum.

In the bad old days you'd need to have been a proven saver for a considerable length of time before you could request a mortgage and those days are about to return, I suspect. For most people I think this would be a very good thing indeed. Rushing into buying can be a very risky business

poppysarah

scatz wrote: »

Indeed. Life's little luxuries were affordable only because we were not aware that an option to purchase was there.

Save. Save. Save.


Do you not think even if you thought there was no hope of buying at the moment - that saving for the future was a good idea?

Blacksheep1979

scatz wrote: »

I have done my sums with our income based on the prices of the houses that are being developed and can see even if we spend as we spend now then we will be in a position to pay a mortgage of up to 60% of the property price and the rent and service charges and still be financially secure, even with a 5% increase in mortgage rates!

You say that you can afford these numbers, but what about all these 'unforeseen' problems you keep running into:

scatz wrote: »

the need to have the IVA was down to unforeseen circumstances

scatz wrote: »

We have saved money but that has been spent on unforeseen circumstances,

Is there any contingency in your budget?

scatz

Blacksheep1979 wrote: »

You say that you can afford these numbers, but what about all these 'unforeseen' problems you keep running into:

1st unforeseen circumstance was going back quite some years which is why we could not afford to pay back our debts, hence the need for the IVA. The only other unforeseen circumstance was the dog having cancer! There have been no others! Incidentally, the money we had saved paid off the vet fee's with some to spare so I do plan for occasions such as that

Numbers;

Based on the general rule, lenders would offer us around £120k. £120k in our area would probably get us a two bedroom flat which is not suitable accommodation! Suitable accommodation would mean a mortgage of around £170-80k which lenders will not lend us and I'm pretty sure there aren't many 'average' folk that would be able to accrue a £50k deposit, this is unachievable to anyone on an average wage with a family to support which is what I've been trying to get across!

After all necessary expenditure (not including rent) we would be left with circa £1200pcm.

A repayment mortgage of £200k at 5.5% would cost around what we have left but that would be stupidity and leave us on the brink of financial meltdown. However, a shared ownership repayment mortgage (50% ownership) of around £85k would mean a deposit of £2250 would be required (achievable) and repayments, rent and service charges of approximately £800pcm would leave us with circa £400pcm on top of a slight bit extra where I rounded all our other expenditure up to the nearest £10 and more in one case! So, £100pcm for those luxuries and £300+pcm saved (towards staircasing perhaps)!

You'll see that what we can afford doesn't really have a bearing on what lenders may offer us although maybe after consulting a financial expert we may be surprised but I'm only going on general rule of thumb lending figures!

Perhaps we are in a unique position in our little corner of the country (house prices) which doesn't help the 'average' family!

scatz

poppysarah wrote: »

Do you not think even if you thought there was no hope of buying at the moment - that saving for the future was a good idea?

As I've hopefully explained above, what need would there be to save if a mortgage is not achievable! What would you save for, a rainy day? We did that and spent it on a rainy day. Since that rainy day a couple of months ago we have saved £700! So you see, we do save just not towards a deposit because it would have been pointless (I'm beginning to sound like a broken record here aren't I). What other major expense would there be to save for?

BitterAndTwisted

scatz wrote: »

What other major expense would there be to save for?

Kids going to Uni? Redundancy and consequent unemployment? Injury and inability to earn a decent living? Long-term illness? Separation and divorce? Death of a spouse? Pension?

And I haven't even thought about it very hard at all

poppysarah

scatz wrote: »

What other major expense would there be to save for?

I don't think I can dignify that with a response.

jbal_2

poppysarah wrote: »

I don't think I can dignify that with a response.

But you did anyway......

poppysarah

jbal wrote: »

But you did anyway......

Not one listing all the possible reasons - if the OP feels they need telling what they might need to save for then they are lost.