FTB Please Help!

jeni_2

My partner and i are desperate to get our own house together as we are not happy living with parents, the only problem is we have debts to pay off. I have checked my credit score recently and from being good it is now below average. I have heard that because i have consolidated my debts with a debt management company that my score has dropped because ive have not used or applied for any credit for 1 year. We both generally have good income per annum,but cannot afford to save for a deposit whilst paying our debts. We thought that 125% mortgage would be brilliant for us as we could pay our debts off with the extra money have some money left over to modernise the property and afford a mortgage comfortably, we just dont konw if any one would be willing to lend us the money.PLEASE HELP!

ashcarrot

Sounds like you want to sort out your debt first, and if you can afford it rent until your in a decent position to get a 95% mortgage. Theres no point digging yourself a bigger hole at this point.

herbiesjp

I suppose this will all depend on the figures that you are looking at.

What are your incomes?
What is the total debt amount outstanding and what do you pay each month for the debt?
What property prices are you looking at?

Conrad

jENI

You should understand that you have broken the terms you agreed to when you signed your original credit agreement. That constitutes adverse credit.

The original credit agreements would have compelled you to pay on time and in full, just as you work for your employer and expect to be paid on time and in full.

For this reason you almost certainly wont get a 100% mortgage and even 95% could be difficult. Thats because you have'nt kept your side of the bargain on existing debts so obviously mortgage companies can only assume you have a greater than normal disk of not keeping to thier terms either.

The greater the risk, the greater the return the lenders (actually investors) require, which means higher interest rates.

My advice is get all your debts cleared before going for a property.

One of my brothers went Bankcrupt - it was the easiest thing in the world.
On the down side it meant he had to save a 10% deposit for thier first home (this was just over 1 year after the Bankcruptcy), but as they had no credit bills to meet the 10% target was easy.
The rate was 6.85% fixed for 3 yrs with no income proof, with SALT finance.
Ok he paid a little more on the mortgage rate but still vastly vastly less than he would have paid had he paid off the interest on all his previous debts.

Decisions......