Confused - is it possible?

Vampgirl

From reading through the conversations it appears that there are are some very savvy people around here and seeing as hubby and I have no idea I thought maybe this would be the place to go for a bit of help! Please forgive me if this post is very long tho!

Background
We are currently renting and would dearly love to get on the property ladder but I have always thought that this would be pretty impossible given our current financial situation. However, following a conversation this weekend we were led to believe that there is hope for us yet! The problem is that neither of us really know much about mortgages and what is possible.

We both earn good salaries (65K between us) and have secure jobs but we also unfortunately have a fair amount of debt: about 15k on credit cards at the moment (mostly left over from paying for our wedding last year) which is terrible I know, but we are now dealing with this and this following my plan will be totally paid off by the middle of next year (worst-case scenario). Getting a personal loan to pay these off isn't really an option as we both already have one of these for debts incurred before we met. Sounds like we're bad with money doesn't it? Well maybe we haven't been the most responsible people up until now (and yes, there probably was an element of sticking our heads in the sand), but I think we've learned our lessons and there is no way I'm going to let us get into this situation again!

Question
Anyway, according to the plan I've worked out, we will be in a position to buy a small 2 bed house for around 180-200k with a 10% deposit by the begining of 2010 (that is assuming that prices don't rise too much). If I'm honest about it, I'm not really all that happy about waiting that long but am pretty resigned to the fact and hadn't really considered that there was any way round it until now.

We have been led to believe that it may be possible for us to get a no-deposit mortgage for more than the house is worth, so that we can use part of the mortgage to pay off exisiting debts. Now I'm pretty sceptical about this whole idea: sounds great in theory but I see all sorts of pitfalls (such as repayments if interest rates rise, owing more than the house is worth etc...). I really don't want to over-extend and get into trouble, but equally if it is possible to do this without too much risk then I would love to get on the housing ladder before prices increase even more!

So what I'm looking for here is advice as to a) whether this whole thing is indeed possible? And more importantly b) whether it is advisable! Would be really grateful if anyone can help

Mr_helpful

There are some deals like this around Probably the best known is northern Rock together plan

cushde

Hey there, and welcome to the forums.

There are mortgage companies that will offer upto a %125 mortgage. For you to use to wipe debts, or the %100 mortgage which you will not require a deposit for, but please be aware that these types of mortgages require very strict credit scores/reports. Best thing i would advise to do is to get in touch with a broker/adviser. There are lots here on the forum which im sure would not mind you sending them a pm for a chat.

The ladder is quite hard to get on! I am 25 this year and i was thinking also to my self that i woud rather do it now than 5 years down the line when house prices are probably double what they are now.

Best of luck.

Rick62

Northern Rock and BM Solutions are the main 2 players, doing mortgages at 95% plus max 30% unsecured. However the rates are not great (aut 6% I think).

However, there is a lot of talk that prices might ease off this year, certainly there is little chance that they will continue increasing as they have. In your position I would concentrate on reducing the debts and saving some deposit, probably 5% deposit would be OK. Once you buy a place you will also have all the costs, including stamp duty, will need to furnish the place and you will be responible for the maintenance.

Vampgirl

Thanks for your advice - its pretty much what I expected to hear....ie. that such deals are possible, but not always advisable! Its certainly not something that we are going to rush into...I'd much rather reduce our debts somewhat before taking the plunge (I like my safety nets as I'm a bit of a pessimist) so I'm now thinking that maybe we should be thinking about looking for somewhere this time next year. Its good news that prices aren't expected to rise so much, and by this time next year our credit cards will be down to 4k. Our tennancy renewal is April (we've already renewed) so this would also fit in well and we wouldn't have to buy much in the way of furniture as we're renting unfurnished.

I've looked at Northern Rock and it looks pretty promising - thanks for the tips! Mortgage and loan repayments come in at around £1175 a month - which is easily affordable and would even allow us to save if we're not paying other loans too (even taking into account higher council tax, utilities and insurances).

Am feeling a lot more positive now plus I have a realistic target to aim for (which I always find motivational!). Its going to take some hard work...but its nice to know that the light at the end of the tunnel isn't as far away as I'd originally thought.

Mr_helpful

The Birmingham midshires product looks ok Until you find you have to fund the deposit seperately. Seems strange as all you need to do is put deposit on credit card then use the extra mortgage to pay off credit card.