Advice required!

mynameisben

Hi Guys n Girls.

Although ive visited this site a few times, ive never ventured into the forums before, however now i think i may need some sound advice which might just set me on the right path.

Basically i would like to know what would be the quickest way to get a deposit to buy a house, and what are my options ?
(selling myself or a kidney is not one of them )

the details:
im 24
I ern i think 21k a year, there abouts..
I want to do it on my own, as i dont have anyone to do it with
The most i could borrow (from Lloyd's) is 92k as ive already enquired about a morgage, the nice lady said that its guaranteed for 3 months providing i come up with 10% for a deposit.
houses by me are quite cheap, so i would like to do it as quick as possible before the prices start booming again..
I live with my nan (who is getting on now, so i really want to think about moving out as she's going to be closer to 80 by the time i do, and i dont want to be hanging around her forever)

the only problem is, ive worked it out and roughly i should be able to save a deposit on my own by the time im 26 or just after, but i wouldnt mind doing it alot sooner.

my other problem is i owe 2100 still on a loan which, has 11 more payments to make. ( Ive managed to get it down from 9k from a combined effort of PPI - thanks to this site, and paying off ALOT)

I am currently also saving money, and since enquiring about a morgage back in march, ive managed to save 1k. so on average by this point next year i should have around 4k saved, combine my loan amount to that when its paid off, and by this time 2015 i would have 10k.

There is one Option i have thought about,
Take out 10k loan - pay it back over 5 years which will probs be about 200 a month, now im doing that now with my current loan.
consolidate my 2k loan - bank the rest - add to it for 12 months ( so say in 12 months i'd have around 12k in the bank including loan)
pick me up a cheap dirty needs work house - but is at least livable.

so set a limit of say 70k for a house, product + solicitors a couple k, i'll have maybe 2/3k left over which i can keep hold of or use to help pay for said loan over the remainder of the term.


Sorry its so long, i just wanted someone who may just have some outside the box thinking other then heaping myself into more debt but to get out of a situation, sometimes we have to make some tough choices. ?

Cheers,

Ben

ACG

Loans are not usually acceptable as a form of deposit.

However if you were to stop overpaying on your current loan and just pay what is required how long would it take you to save up 10% based on a £70k purchase price? The reason i ask is that at £70k you may still pass affordability checks even with the loan in place - so by putting more money towards savings that the loan, you may get there a bit quicker.

InsertWittyName

Lenders won't allow you to use the loan as a deposit.

It must be saved and/or gifted.

There's no need to rush, the average FTB age is 35 or something like that!

Pay your debts down and then start saving.

Caladan

I may be understanding you wrong - but are you suggesting taking out a loan to finance your deposit? If so - Mortgage lenders wont like that one bit, and they'll want to see evidence of where your deposit came from (although in fairness if it's a year since you took out the loan they might not look that deeply). Having the loan there will reduce the amount you can borrow however.

mynameisben

hmm, so generally the feeling is, no to loan.. hm, ok so i need a different approach..

The thing is, im currently trying to save £300 a month, I would like to Increase that to try and save quicker.

I am also overpaying my loan, its a long and complicated story of how rubish things went not long after i took it out, subsequently to say, it ended up with debt collectors, so i would rather pay over the odds now just to get rid of it. - if however i reduced the payment, i think i would save prehaps another 7-800 quid.

Im just not sure what else to do, as i really would love to move out, but hate the thought of renting, because its pretty much the same for a mortgage only the difference is, i'd own a house!

Caladan

If the loan is with a collection agency paying it off is your priority - The chances of getting a 90% Mortgage with recent poor credit are slim to none.

mynameisben

my credit score is 973 on experian, ive managed to tern it around from like, poor to very good because i figured i'd need it good to even get a look-in, and i can get a mortgage,

where also would be the best place to put my money, i have it split over two isa accounts but would it be better to put it all into one ?

Katzen

Looks like your only option is to up your income. Any chance of overtime? Or second job evenings and weekends? Any skills you can use to earn with? Borrowing even more to pay for a house sounds like a bad idea to me but working your bum off for 6-12months should be do-able at your age. I had 3 jobs for 6months to pay for travelling in my gap year. It nearly killed me but was so worth it in the end!

kloana

mynameisben wrote: »

my credit score is 973 on experian, ive managed to tern it around from like, poor to very good because i figured i'd need it good to even get a look-in, and i can get a mortgage

Your credit score means nothing. Your overall credit history (which regardless of how long the story is, it isn't good) is what's important. Very high Experian scores are ridiculously easy to achieve. All they seem to require is a few months' worth of paid accounts - regardless of whether or not the said account has been defaulted, passed on to a collector, etc. Not only is the score meaningless, but the methods used to devise the score often don't make sense.

Echoing others - there's no rush. Renting isn't a dirty word, particularly at your age (and with your probable inability to get a mortgage). If properties are cheap to buy in your area, it stands to reason that rents on small, modest properties will also be affordable.

witchy1066

buying a house, and being able to pay for it and all the bills are 2 different things, have you worked out how much your household bills will be on average , its not just a case of saving to get a deposit together you will have other costs , also its good to have a bit aside for a "rainy" day would it be a good idea to go more than 3 x your earnings ? will you be able to afford your mortgage and bills if/when the interest rates rise ? these are questions you should be asking yourself.

you are only young and have plenty of time to get your own place and surely its better to get it right than live to regret

keep saving and working hard , its good to have a goal

mynameisben

@ katzen - Im saleried i work perm nights, and the only days i do get off is Fri n Sat, but i do probs close to 50 hours a week as it stands, and i just never find i have enough hours in the day with trying to catch up with sleep haha!.
Ive thought about Bar-jobs Fridays n Sat nights, but they always seem to go real quick, or alot of jobs, the hours dont fit with what i do..
My other problem is, i dont have much for qualifications, but i'd never let that get in my way ever.
Im determined to reach my goals.