Possibility of a Mortgage (our situation)

ManOfKent_2

Hi Guys/Girls,

We are a couple from Kent who have our flat on the market and are looking to our next step. Please have a look at our situation below and advise if you can. Any recommendations for a broker in Kent would be appreciated so we can take this further.

We are living in a flat we purchased in 2007 and currently have a mortgage of £136,000, plus unsecured loan of £29,000 (NRAM Together Product).

Our flat is on the market and we expect to sell for £143,000 and move in with parents for a few months (God help us!) to allow us to be chain free and effectively first time buyers.

We are looking for a property of between £250,000 and £325,000 on either of the Government Help to buy schemes if possible.

Our Assets:
Savings: £12,000
Equity in flat: £4,500 after fees
TOTAL: £16,500 (This will increase by approx. £2800 per month we are with parents after our sale)

Our Debts:
£29,000 NRAM unsecured loan (this will change to 12% APR once de-linked from mortgage (meaning around £350 per month outlay.
£8,500 My Credit Card (£200 per month)
£1,900 Wifes Credit Card (£75 per month)
Wifes Car Lease (£220 per month)
TOTAL: £39,400 (£845 per month)

Our Income:
£44,000 PA (Me)
£31,000 PA (Wife)
TOTAL: £75,000 PA

Our Credit files:
Both Good – no defaults etc. A few missed payments from over 18 months ago. 3no. payday loans (Quickquid) settled within time after a few days around 18 months ago.

Dependants:
None

Many Thanks in advance.

kingstreet

Try different lenders' affordability calculators to gauge the outputs based on your full circumstances.

Many lenders take 5% of the balance for card debt, so your monthly costs look understated. It should be £520 per month.

Assuming a 25 year term and allowing for a £65,000 equity loan, you would be able to borrow about £286k using one lender's calculator, subject to £1255 outgoings (credit and equity loan) and no other expenses, such as student loans or ground rent & service charges.

ManOfKent_2

Thanks Kingstreet, I have looked at some affordability calculators and it seems a possibility - I am just unsure of how strict the lending is for these 95% schemes.

Obviously I need to think about stamp duty fees (I probably need to save a bit more)?

kingstreet

Stamp duty is going to be towards £10k, with your selling and buying costs on top, so the thick end of £15k.

If you buy a newbuild, you're going to be looking at the 75% products on HTB - Equity Loan and the 95% HTB - Mortgage Guarantee products if you don't.

You now need a broker to plan through these options with you, depending on your choice.

Ask friends and relatives for a recommendation near you.

ManOfKent_2

Thanks KS.

Seems that there is hope of finally moving on.

Does anyone have any recommendations of brokers in Kent?

Thrugelmir

What rate of interest are you earning on your savings? You'd be better off tackling your debt position. Lenders will obtain a lot of data on your debt levels when they perform a credit check. Unlikely they'll be comfortable with the unsecured debt levels when you apply for a sizable mortgage. The concern will be that you don't handle your monetary affairs responsibly.

ManOfKent_2

Thanks for the advice so far...

We have now sold our flat :T for asking price (£150,000). So now have another £7000 available.

My wife has also has a payrise and now earns £40,000 :T so our situation looks like this:

Our Assets:
Savings: £12,000
Equity in flat: £11,500 after fees
TOTAL: £23,500 (This will increase by approx. £2800 per month we are with parents after our sale)

Our Debts:
£29,000 NRAM unsecured loan (this will change to 12% APR once de-linked from mortgage (meaning around £350 per month outlay.
£8,300 My Credit Card (£415 per month)
£1,500 Wifes Credit Card (£75 per month)
Wifes Car Lease (£220 per month)
TOTAL: £39,000 (£1060 per month)

Our Income:
£44,000 PA (Me)
£40,000 PA (Wife)
TOTAL: £84,000 PA

Our Credit files:
Both Good – no defaults etc. A few missed payments from over 18 months ago. 3no. payday loans (Quickquid) settled within time after a few days around 18 months ago.

Dependants:
None

Hoping there is a way forward...once we are out of our flat are we best off paying our credit cards down or adding to deposit?

Thanks

kingstreet

You need a broker. We can't do this for you on here.

ManOfKent_2

Got a local broker looking into it...I'm just impatient I guess! Just thought someone could ease my mind and say whether there is a possibility or not.

Thanks

Thrugelmir

Tackle the debt. Your starting position is a negative £15,500. Lenders may well need some convincing that your personal money management is under control.

Little point in saving with NRAM debt at a 12% interest rate let alone what are paying on your other debts.

ManOfKent_2

Thanks...understand it would be best to tackle debt first and we will if it's needed to secure a mortgage - but we are in need of a house as we are not getting any younger and would like to start a family.

We don't want to have to stay with parents for too long!