Help to Buy Advice please

andy_vip

Hi all,

My wife and I are currently renting. Her nan has said that she is willing to gift her the 5% deposit required for the "help to buy" scheme to enable us to get a mortgage, instead of getting it in the will.

So the situation as it stands is as follows:

My Income: £50'000 + ~£3000 p/a extra
Wife Income: £30'000
Total Income: £80'000

My debt:
£50'000 unsecured loan (for training, never missed a payment in 3 years, 4 years remaining, monthly commitment £1000 - I make loan repayments before paying tax and NI and therefore class my salary as £38'000)
£4000 student loan (monthly commitment £150)
£400 Barclays Loan for laptop (could pay off in a couple of months)
£250 credit card (again could pay off in a couple of months)

Her Debt:
£8000 mix of credit cards and overdrafts, paying off slowly (monthly commitment min. payment around £300, she's currently paying 5-600)
£9000 Student loan (monthly commitment £150)

I have checked my credit rating on experian and its "Fair", a score of around 870, mainly due to the high level of borrowing. Her's is also fair to good.

We are currently paying £1500 in rent (yes I know it's a lot...) but haven't missed a payment on anything ever, so could easily afford a mortgage if we were accepted.

We haven't applied or tried saving before because we have tried to always pay off the debt first- but now with the kind offer from her nan and the government scheme it's something we have now been considering.

So the question is - what are the chances of getting the 75% mortgage and being accepted for the 20% laon from the government? I am seeing a broker next Wednesday but would like some advice beforehand, and if you have any advice on what to ask him as well that would be great. I understand we would have to buy a new build and that isn't an issue. We would be looking at houses between £250k-£300k.

Thank you so much in advance.

Let_Us_See

After a quick glance...................not good, but not impossible. I suggest even at the lower proposed £250k purchase price you are setting your sights too high with your current level of debt.

Take all these details to the meeting with the broker/adviser and let them run through the various "what if" scenarios - and there WILL be many of them to be considered. Good luck.

demontfort

You're both young and in full time employment with a gross income of £80k and have to rinse the poor old nan for your 5% deposit and the government for a further 20%, that is really shameful. Why the government is subsidising people who can't save a bean to take on massive debts is beyond me.

I earn less than your household income but would be loathe to ask my parents (let alone my poor old gran) for even a penny of deposit money and the government can stick their 20% loan where the sun don't shine. :rotfl::rotfl::rotfl::rotfl:

andy_vip

Keep your opinions to yourself please. We are not "rinsing" her old gran. The money would be left to my wife in the will, she is just giving it to her early.

I've given you the reason for not being able to afford the deposit. My debt was taken out to pay for my training - in 4 years the debt will be gone and I'll be on £100'000. We could wait until then to save for the deposit but if the government want to help people out like us WHO PAY OUR TAXES (a lot more than YOU I might add), who will in the future contribute a lot to the economy then why shouldn't we take advantage of that?

May I also add that we haven't ASKED anyone for the money - her nan did it on her own accord, through her own free will. The reason we are currently renting somewhere more expensive is because we can afford it and didn't think we would be able to get a mortgage for a long time. As soon as we can we will be downsizing.

Thank you Let Us See for the advice.

shonzyd

Your plan might be feasible but if you were one of my friends asking for advice i would not advise you to take out a mortgage with that level of debt hanging over to your head. Getting a mortgage you are only adding to what you have already borrowed. whilst you mention your credit score which is totally meaningless you havent mentioned whether you have ever missed a payment, late with a payment, defaulted?? CCJ??

When will the debt be totally cleared? on that level of income you'd be mad to go on any government deposit scheme in the first place.

if you havent been able to save a penny how are you going to afford the upkeep of maintaining your own house? repairs? boiler suddenly breaks down?

p.s you came on here asking for advice and opinions - dont shoot people down because it doesnt agree with you.

andy_vip

Ok, so the loan is a professional studies loan from HSBC, I have made full repayments without missing one for 3 years and have four years remaining. As I said before the payments come out before I pay tax and NI as it's equivalent to a postgraduate loan, so one way of looking at it is just to reduce my salary by £12000 a year to put me on £38000 a year. I have never been late with a payment and have no CCJ's. Any extra money I have made I have paid off extra on the loan or my wifes loans. The debt is manageable and so is my wife's, we have a monthly income after tax of £4500.

As I said, we are currently paying rent, have been for 4 years and have never missed a payment on that, I know we can could afford repayments on a £300k mortgage if it was accepted by a lender but all I wanted to know is the likelihood of getting that approval.

We haven't been saving because as I said for the fourth (maybe fifth who knows) time I have been clearing debts.

The scheme would have to be used for a new home and therefore little upkeep, anything out of the ordinary we would have insurance for.

I was asking for advice and opinions on the questions I asked, not looking for people to get personal. Thanks for your post anyway.

andy_vip

Thanks Adam, you are correct in your assumption, I am speaking to a broker in Reigate next week and will go through those details with him. I'm unfamiliar with the ROTE scheme, but it is clear from my statements etc that I can service my debt easily. Maybe PM me with your details and we could talk more?

shonzyd

ok, well either way whatever you decide to do good luck! - your income and positive credit history should leave you in good stead toward buying a house.

demontfort

If you want to start comparing salaries ,I actually pay more tax than you as I earn almost as much as both of you combined but have managed to save a big wad of cash in the process. Fair enough it’s not my business what your gran in law does with her money and good luck paying off your debts and getting a mortgage. What I resent is this government scheme to offer people a potentially high risk, huge interest free loan to people who are clearly very well off but in many cases incapable of managing their finances, hence they have only saved a 5% deposit.

I work hard, I save and I pay my taxes which I don’t expect to be used to subsidise the lifestyle choices of people with good salaries. Tax revenues are there to provide government services and help those in need. We’re all working adults here so we should be able to stand on our own feet not rely on state handouts that should be spent on essential services.

Gary123456790

Mortgage_Knowlodge wrote: »

contact me directly to go through any more details

Adam - you should be aware that forum rules forbid touting for business and if you are a mortgage broker then your signature should say so.

Gary.

andy_vip

shonzyd and demontfort thank you for your posts, I understand your frustration, each person has different personal circumstances and I didn't mean to provoke quite the reaction I did.

Please understand that I am able to afford the mortgage and I'm not getting deeper into debt (well technically yes but we'd be better off long term than renting for another 4 years...) and I was purely after advice on the probability of being accepted for a mortgage.

Thanks all for the advice