Adding our debts onto our mortgage?

kayleigh82

My fiance and I are looking at buying our first house and have our deposit, but also have some credit card and overdraft debts. I was wondering if banks allow you to have more than the value of the house as a mortage, effectively allowing us to pay off our debts and have them tied in with our mortgage?? We have been told that we are eligible for a mortgage of up to £104,000 and are looking to get our house for around £95,000. Would they give us £100,000 even if the house was only worth 95k?? Thanks x

kingstreet

No they won't.

Realistically, you'll be able to borrow 95% of the purchase price or value of the property, whichever is lower.

As there are only a couple of lenders offering 95% mortgages, you'll probably find you'll need at least a 10% deposit.

TrickyDicky

100% and greater mortgages were one of the reasons for banks collapsing. You're not actually paying off your debts, just moving them (and in the case of the mortgage, you'd probably end up paying more over the life of the mortgage than you would have done with the normal debt!)

When reviewing your case, they will basically count your debts against your savings.
So if you have £10000 debts, but £10000 savings, they will see you as having £0 and therefore no means to buy the property.

Best to pay off these debts before you even consider buying a house.

getmore4less

What you are doing is borrowing money on credit cards and the overdaft to create the deposit.

madness

DVardysShadow

getmore4less wrote: »

... madness

Agree. It is the road to financial distress, domestic arguments, separation, arguments over division of debts, being chased by debt collectors when the other one does not pay their dues. In all about 20 years to get straight afterwards. Longer if children come along. It is a lifetime defining single mistaken decision. If you can actually find a lender.

DannyboyMidlands

No, why would they do that? As soon as you move in you will be in £5k of negative equity. If prices continue to fall this will only get worse. You will be stuck there. If you stopped paying the mortgage, the bank wouldn't have a hope in hell of recouping their money.

poppy10_2

Pay off your credit card debts and overdraft first before even thinking about setting aside a deposit.

magpiecottage

I am afraid it may not be what you want to hear but for most people getting your first home involves real sacrifice. I had to save for five years for mine.

That meant very little going out or holidays, no car (I used a push bike to get to work or, when I commuted, the station - in all weathers).

I think you need to make some hard decisions about what your priorities really are because you cannot afford to have it all.

Peelerfart

I smell yet another troll - quite a few about,must be the season for 'em.