Current Debts and how soon to be mortgage approved?

Batoutofhell_2

Hi,
This is my first post here, so first of all hello all and this site looks like it will become a permanent fixture for me in the months to come.
Basically I am in a situation due to circumstances a few years ago whereby I am in debt and I have been embarrassed at the extent, and have stuck my head in the sand about it. My current situation is much better - infact a complete turnaround - however I still have this debt and I need to work out the best way to rid it or consolidate it with a view ultimately to getting a mortgage for a family home.

I am totally unsure as to the best way to proceed and need the quickest way to rid these debts OR to manage them in such a way that I could still be mortgaged approved:

Debts owed between my partner and I:
Credit Union (16,000) 10.9 APR- paid out of my work salary and over 3 years.
Credit Card (£1,500) - standard APR rate
Credit Card (£3,000) - 0% APR - 8 months left at 0%
Credit Card (£2000) - standard APR rate
Loan (6,000) left out of original £7,5000 loan. Paid at £233 p.m.
Loan (4,000) paid at £200
we also have a car finance at £200 per month.

Our combined incomes are £58,000 per year.
At the present time we have zero disposable income to save for a mortgage deposit - every spare penny after normal outgoings is attacking the debts. I am paying more than minimum payments but cannot see any real hope for progress in years and that is a worrying thought.

We have moved in with a relatives and put our home on the rental market with a £500 p.m. additional income, this is also saving us £ on not paying household bills. (mortgage currently £300 p.m). We have outgrown this property due to having a young child and hence the need to move into a larger property as soon as we realistically can. I appreciate the help Im getting but need to stand on my own two feet as soon as possible. No chance of selling to pay the debts as Im in slightly negative equity!

The Credit Union will offer unsecured loans up to £25,000 over up to 8 years. I have thought about upping my current 16,000 to 25,000 and swallowing up the debts with highest APR and paying back over a longer period and hope the mortgage company understand this is a manageable debt?

I am hoping for a mortgage of around £150,000 - £165,000 (after deposit paid). The deposit will be thankfully assisted with family but I cannot/dont want to ask them to use this to pay of our debts. They will stand as guarantor though if needed?
Strangely I am shown as having good credit.

Any ideas on what to do? apologies for posting this in the debt free and mortgage forum as I am unsure as to where was most suitable.

I appreciate any honest advice and guidance and hope to be a regular member of the forum to offer advice in other areas.

Thank You

Dave_Ham

Hi there,

I think you are best to seek out information from your other thread first, as attacking the debt is your first step.

Mortgage wise, so long as you keep paying the full payments + in a timely fashion you will become mortgageable.

Take advantage of what you have done and suffer the shared family home as long as you can eating into the unsecured debt.

Good luck

Batoutofhell_2

Thank You.
I was just toying with:

wiping out/transferring the majority of debts into the credit union over 90 months to 23k. That would leave me with £400 per month to pay this off - but would then 'only' leave credit cards outstanding of £5,000 and the £4000 loan which I could blast off in a year.

I theory if I approached a mortgage company in 12 months with just the manageable debt of £23k over 90 months - would I likely be approved.

Our current combined income of around £57-60K and wishing to borrow 150k. Also the extra 6k from renting our other property.

I appreciate you cant say for definate but does it sound do-able?
or would the 23k hanging over me for the next 7 years be too much


I think 12 months is the maximum we can stay as we are realistically.

Thank You again.

Dave_Ham

Definitely enough to go at and probable. The banks would rather one manageable debt on a lower monthly payment.

Simply speaking on an affordability only basis, they assess the monthly outgoings and credit scoring predominately and the amount of debt as a secondary consideration.

Obviously you will pay back more in the long run and therefore the lenders view on debt is in stark contrast to many on the forum.

I think your plan has legs, sticking to it in the face of improved disposable income and no personal space is your challenge.

Batoutofhell_2

Thank You Very much, I just want to be heading in the right direction
- and property-wise I can get all I need for much less that what would be 3 or 4 x our salary. I just have to attack those other debts over the next 12 months.