Achieving the Impossible (FTB)

paulmapp8306

Only got to the end of page one - so this may have been covered, but for the OP:

You dont have "bad credit" you have a "poorly managed financial situation". You may not think so - but the lenders will and ultimately its them you have to convince, not us and not "self justification" for your actions.

You have a good paid job, you have debt but no savings. You reasoning behind no savings if that you spent you money on .... paying off more debts.

That just doesnt look good. you need to reduce your debts, while saving a deposit. You need to change your lifestyle if necessary to achieve this in the time frame you want.

paulmapp8306

jon557 wrote: »

For me...

I pay £400pm rent (dead money)

The usual mortgage is like 3% right? (Or rather a good one)

No - Im looking at 80% LTV mortgages and the best to date is 3.49% which is a tracker - 3.79% for a fixed.

The best I have found (and this is via whole of market independent advisor) for a 10% - which is very difficult to get - is over 5%.

For a 95% LTV, with your current commitments - despite your income - 6% is possible but unlikely I guess. In fact ANY mortgage is unlikely in your present position.

Put into perspective - I have a 20% deposit, I have one loan of under £1000, with a £20/month commitment. I an £0 onto my OD, I have £0 balance on my 2 credit cards, I have no credit issues on my record - and I earn £2400pm take home. I cannot get a 95% mortgage, and would struggle for a 90% one. Ill let you know in the next couple of days if I get the 80% one as its being submitted tomorrow.

You need to get some real perspective on what is achievable, with what, and with what background.

jon557

"poorly managed financial situation".

I really disagree with this, this is YOUR definition for some reason. I pay my debts, I never fail on that. My debt payments are small £350pm minimum, this is EASILY manageable. I have gone through my figures with several mortgage advisors and calculators, I have at the end of the month £2,360 into my account, £400 on rent and £350 towards my loan. That leaves me £1600 for anything else. I can commit £700 to £1000 to a mortgage. I have been quoted £740 for a 95% mortgage for 35 years, so that is manageable (5.99%). It is with the underwriters now. They won't fail me on affordability, they will fail me for other reasons.

I need to also improve my spending i.e. spending £200pm on "entertainment" - I'm now reducing that to £150pm. But that's a side issue. Most of my loan is locked up in my car, so it's not gone to waste.

Paul - you should be able to get a mortgage easily with your situation.

bodmil

jon557 wrote: »

they will fail me for other reasons.

That'll be the history of poor financial management.

somethingcorporate

What have you done with the £60k+ you have earned net plus the 12k loan you have over the last 3-4 years? You've frittered away £70k+ of cash with nothing but a 6k car to show for it and an additional £12k + of debt hanging over you.

You say you have not demonstrated "a poorly managed financial situation"? I disagree.

thelawnet

jon557 wrote: »

For me...

I pay £400pm rent (dead money)

The usual mortgage is like 3% right? (Or rather a good one)

If I get a 6% mortgage, then I will be paying 3% more than a good mortgage. This equates to me as £30 per 1% according to the flats I am looking at etc. So that £90 extra on interest to the bank.

Its £90pm extra to the bank
Or its £400 dead rent money to the landlord.

No competition really for me.

You are ridiculous.

I pay £18k year rent, that's about 3% of my house's value. The capital value is not increasing, and the rent is the same as the dead money I could pay via an I/O mortgage.

Except that when we moved in (4 years ago) they put in a new kitchen and redecorated. All that will need doing in a few years. I don't pay that. I have a fixed monthly cost.

And when we decide we want to live somewhere else we give a month's notice and off we go.

Whether you own a house outright, whether it's 100% mortgaged, or if you rent, either NONE of those things are dead money, or they are they all are. Why none? Because you are getting somewhere to live, which is essential for life. And why all? Because if you own a £500k house outright, that's £500k that could otherwise be invested in shares, a business venture, or whatever; if you rent or pay a a mortgage, that money is money that can't be spent on other, more useful things (such as beer).

You obviously haven't figured out that debt is dead money, because you've got ridiculous amounts of it, and God knows why, I mean furniture, !!!!!!? How much did you spend and on what? At least you could have spent it on booze and birds.

Debt is bad not just because it's expensive, but because you are spending tomorrow's labour today. Don't you think that's terrible?

Truly bizarre that you can describe rent as dead money, whereas your car, which will be a worthless lump of metal in a few years is top of your priorities list?

andy8784

jon557 wrote: »

I really disagree with this, this is YOUR definition for some reason. I pay my debts, I never fail on that. My debt payments are small £350pm minimum, this is EASILY manageable. I have gone through my figures with several mortgage advisors and calculators, I have at the end of the month £2,360 into my account, £400 on rent and £350 towards my loan. That leaves me £1600 for anything else. I can commit £700 to £1000 to a mortgage. I have been quoted £740 for a 95% mortgage for 35 years, so that is manageable (5.99%). It is with the underwriters now. They won't fail me on affordability, they will fail me for other reasons.

I need to also improve my spending i.e. spending £200pm on "entertainment" - I'm now reducing that to £150pm. But that's a side issue. Most of my loan is locked up in my car, so it's not gone to waste.

Paul - you should be able to get a mortgage easily with your situation.

Come on, you can't really be serious? The sheer fact that you have (going from your sig) over £13k in debt with your income makes it a "poorly managed financial situation". You say you can "easily" commit £700-£1000 to a mortgage, but you can't manage to save up a decent deposit over the year or 2 while you continue to rid yourself of debt? Your rent is £400 a month you say, so your looking at an "easy" £300-£600 a month you could be saving. Less than 2 years saving £600 per month is nearly £13k...

I earn a similar amount to yourself, I'm 25 and have been in my job for nearly 6 years, and also have a £6k car. I have been saving seriously for around 2 years and have a sizable depostit built up. Granted, I live at home until I find a place to buy, but even without that, I don't imagine I would find myself in your situation.

You may feel comfortable with taking on this debts now but you can't see the future and you need to make allowances, don't go maxing yourself out in the beginning. You may be flying high in your job now, but things can change very very quickly and you may find yourself in a very unfortunate situation!

jon557

Seriously people!!!

I've only been on £44k for a few months!!! Last year I was on £35k and around the £25k the year before.

MagicCats

OP - You've not been involved with the financial management of Rangers FC at some point have you?

jon557

I pay £18k year rent, that's about 3% of my house's value. The capital value is not increasing, and the rent is the same as the dead money I could pay via an I/O mortgage.

Except that when we moved in (4 years ago) they put in a new kitchen and redecorated. All that will need doing in a few years. I don't pay that. I have a fixed monthly cost.

And when we decide we want to live somewhere else we give a month's notice and off we go.

Wow £18k on rent! Your landlord must be happy you are paying his mortgage and giving him a nice retirement package.

Renting is dead money. Obviously it is necessary if you do not own. You are paing for a roof over your head. But it is money you will never see again, if you are happy about that then fine. But I want to convert that expense into owning an asset sooner than later. It benefits will be seen later in life.

You obviously haven't figured out that debt is dead money, because you've got ridiculous amounts of it, and God knows why, I mean furniture, !!!!!!? How much did you spend and on what? At least you could have spent it on booze and birds.

Yea debt is not good money but it helped for the reasons I needed it for. I pay it on time and I live a good life. So it's not bad, just undesirable. I am now fixing that. I have not wasted it left right and centre, I have had to help family out, sort out old Uni debts and around £6k on the car. It has it's reasons.

What have you done with the £60k+ you have earned net plus the 12k loan you have over the last 3-4 years? You've frittered away £70k+ of cash with nothing but a 6k car to show for it and an additional £12k + of debt hanging over you.

So much wrong with this absolute "guess" I don't know where to begin! I've only been on £44k for a month, it was £42k before that and £35k last year and about £25k the year before.

You obviously haven't figured out that debt is dead money, because you've got ridiculous amounts of it, and God knows why, I mean furniture, !!!!!!? How much did you spend and on what? At least you could have spent it on booze and birds.

How is £12k a ridiculous amount? You are getting that confused with £50k! The average house conservatory extension is like £12k!!! Many people have car loans way over that amount!!!

Truly bizarre that you can describe rent as dead money, whereas your car, which will be a worthless lump of metal in a few years is top of your priorities list?

Like my calculations begin to show, paying into a mortgage is going into a building you own later on in life. Renting is money you will never see again, i.e. dead money. It SAVES money overall!

Come on, you can't really be serious? The sheer fact that you have (going from your sig) over £13k in debt with your income makes it a "poorly managed financial situation". You say you can "easily" commit £700-£1000 to a mortgage, but you can't manage to save up a decent deposit over the year or 2 while you continue to rid yourself of debt? Your rent is £400 a month you say, so your looking at an "easy" £300-£600 a month you could be saving. Less than 2 years saving £600 per month is nearly £13k...

Well done! If you have read my other posts, you'd see that I HAVE NOT BEEN TRYING TO SAVE FOR A DEPOSIT! My deposit is my car, I can sell it to my Mother for £6k and BAM I have my deposit.

You may feel comfortable with taking on this debts now but you can't see the future and you need to make allowances, don't go maxing yourself out in the beginning. You may be flying high in your job now, but things can change very very quickly and you may find yourself in a very unfortunate situation!

Classic risk mitigation approach... I'll have some life cover to cover the mortgage should anything happen to me etc. I always have plans for spare cash of £400ish per month. And in 1-2 years my loan will be gone giving me another £350 spare per month. Also, the place I want has 2 double rooms, I want to rent the second room out as I am use to living with people, so that’s another £400pm.