Wanted - first time buyer.

big_sved

This is my first post on the site, and looking for some advice.

A brief history, I am a 29 yr old with a decent salary in Aberdeen. nfortunately I have spent a fair bit on travelling and had some bad luck over the years which has resulted in me taking out 2 x loans to pay off credit cards. Perhaps I jumped into these but I thought they would help curb my spending and help me save to my ultimate goal which is loan/card free debt and a first time mortgage.

I have a remaining loans of £8K ( Paid back at £440 per month) and £7.3K (Paid back at £330 per month) on top of this I have a personal loan from my parents to pay off a car which has about £4 K left to pay.

My current salary calculates to £46K gross, and I am looking for the quickest way to get on the property ladder. at the current payback the Car will be paid in full Oct 2014, and 8K Loan paid back in Mar 2015 and 7K loan paid back in Aug 2015.

My problem is I am desperate to get onto the property ladder in aberdeen which seems to get worse and worse by the year. I have used a few of the mortgage calculators and even with my debt they advise I can take out a loan of up to £170K however I need the deposit to be able to get the home loan.

Looking for some advise on whether it is better to try and condsolodate the loans and stretch out over a longer period, Ie so instead of paying back over 2 years @£770 per month I could payback £2-300 over 5-6 years allowing me to boost my savings in the meantime. At the moment I have worked out a budget for the next 6-12 months, and I can save no more than £5-600 per month at an absolute push. there fore I would not have a 10% deposit available until 2015-2016 at the earliest. I am currently living at home with parents and am looking for any advice on how to accelerate the possibility of getting onto the property ladder. It is costing around £250 per month on fuel to commute. If I have missed anythign out let me know.

Thanks and appreciate any advice.

19lottie82

Pay off your debts before applying for mortgages, as these will be taken in to account by potential lenders. And with almost 50% of your annual salary, it won’t look good, and tbh I think you’re totally mad to consider taking out a mortgage with that amount of debt under your belt.



You’re in a very fortunate position where you have a good wage and live at home, so have reasonably low outgoings.



Your current take home wage, ifyou are currently paying off a student loan should be £2851 a month, does that sound right?



Forget about consolidation loansand pay off £1.5 k a month and you will be debt free in under 13 months. THEN start thinking about a deposit and a mortgage.



I appreciate this might not be what you want to hear, but you know it makes sense.

ch3101

So you spend ~1k a month paying debt and commuting.

You earn 46k a year, which should be over 2500 a month after tax, probably 2700/2800.

I would advise that you don't save right now and you pay the debts off as fast as possible. So take the extra 5-600 every month and pay it off each debt. Target one debt at a time - the one on the highest rate of interest.

Obviously the property market in Aberdeen is mad, I've looked at it because I want to work there after uni, but its not going to change drastically in the next few years.

big_sved

Thanks for the reply folks, I guess that I kinda knew this was the best approach, always looking for a shortcut, which hasnt helped me in the past.

My outgoings come to £1279+£250 for fuel. so it leaves Aro £650 per month(If I save£600) to cover all other expenses, food, and any thing else i can afford to do.

I guess there are no shortcuts out of debt, just willpower and focus. I have rejigged my budget plan accounting for things like road tax, car insurance etc, and if I really stick to it, I will be in the red(Savings Vs Loans) Aug 2014, and have a 10K deposit in Oct 2014, and be debt free May 2015. I have not looked into paying off the loans early enough, i gues once i have enough worthwhile in the savings account to make a dent in them I can read into the details.

It seems to be constant with Weddings/events on week after week, Its time to say no for a year and get myself sorted!

redhotpepper

i live in Aberdeen as well and can see where you are coming from. I have a big mortgage (£360,000) and have 2 buy to let flats for more than 3 years now. I got them revalued for remortgaging and value has gone down slightly. I am no property expert, however a mortgage is a loan over 25 years and no point in rushing when there are other debts outstanding. Max interest one could get is about 3% on savings and hence I would also advise to you pay off the debt asap. I am doing the same and my savings are zero and my bank account is constantly overdrawn. It helps me curb my spending and I would think twice before I buy a cup of coffee or consider popping into my local take away which I absolutely love ( I have not eaten out for about a year now). It all just adds up

dgtazzman

I really wouldn't consider buying a home before those debts are gone as you'll be surprised and hit hard with the costs of running your own property. I earn about the same as you, and if I was paying 1000 a month towards debts, I doubt I'd be getting very far.

I also very much doubt you'll even find a mortage for 170k with monthly debt repayments of 1k going out.

Be patient, repay what you owe and then get your own home. You'll just end up regretting it if you rush it.

Also, next elections are in 2015, when your last loan is due to be repaid, that might be the end of the 'help to buy' scheme, which might end up being another bubble waiting to pop.