First Time buyer, small ammount of debt, baby on way. Advice wanted!!

squid123

Hi all,

first post, so please be nice!

Just after some advice really, my girlfriend had some debts, i have done my best to help her out, and got in a little bit of debt my self in doing so. Currently its manageable, so its not a problem, but our situation has changed so i am after some advice (as i don't really know where to start!).

I am currently 26, still living at home, and my girlfriend had some debts/bad credit, so i have helped her pay them off (getting myself into manageable debt in the process).

Before i met her, i had managed to save up a deposit (£25k) for a house and we were looking to buy around next year when debts had been payed off (currently sits around £10k).
Only she got pregnant a few months back, so the situation has speeded up the process of buying the house.

I am 26, on £17,500 with overtime (last year earned £26,000) i have a company car and apart from the debt/rent to parents i have very little expenditure.
Due to her bad credit, I was going to apply for the mortgage on my own, then let them move in 6 months or so down the line.

We have looked at a few houses and unfortunately due to the area we live in, the cheapest house we can find is around £110,000

The question i wanted to ask was...

With my deposit would it be easier to either :

a) Pay off loan and go for mortgage debt free but with a smaller deposit.

b) refinance the loan to a smaller minimum payment over a longer period and go with full deposit

c) Or go as i am with larger debt and full deposit, knowing i will be debt free in the next 12 months..

I am happy to borrow as much as i can for as long as i can for now (at around £500/600 a month). Ideally looking to see if £115,000 with a £25,000 deposit on my wage is realistic..

I would have waited, but its happened now, so i am trying to do whats best for us all (as cost friendly as possible!)

Thankyou for any advice, I will be seeing mortgage adviser, just seeing if i can get a little head start on here!

Squid :beer:

theoretica

Is the loan in your name or hers and are you financially linked?

CBR600F_2

I know I'm going to regret this, but what does she do for a living?

squid123

theoretica : no we ar enot linked in name or financially, tried to do the right thing helping her pay her stuff off, as i didnt want to have to move in with her eventually and have debt people banging on the door

CBR600F : she is a self employed mobile make-up artist, and only makes £300/£400 a month (although work has pretty much stopped as she is in the last few months now..)

littlesaint

Has your GF been paying Class 2 NI contributions? If she is registered as self-employed she may qualify for maternity allowance.

http://www.direct.gov.uk/en/moneytaxandbenefits/benefitstaxcreditsandothersupport/expectingorbringingupchildren/dg_10018869

I would not like to make any suggestions in your situation because I would hate to give the wrong advice. If you have been living with parents it may be worth renting a flat for a while - even just a few months - so at least you get used to the expenses involved in running a home.

What I would say is your income and deposit suggest that you should be able to afford a £100,000 property on your own fairly comfortably, providing you are not obliged to pay the debts. Could you negotiate a discount on one of the £110K - £120K ones? My husband and I got a 10% discount on the place we were buying and that is in London which is highly unusual.